The largest fashion retailer in the world, Inditex, which owns Zara, announced a record net profit for the first quarter of this year on Wednesday. Despite this, the Spanish conglomerate is facing increasing competition from Shein, an online rival created in China.
Despite inflation and geopolitical challenges, Inditex, whose other brands include Pull&Bear, Massimo Dutti, and Bershka, has recently reported strong results and witnessed a sharp increase in the value of its shares.
Its net profit for the quarter ended April 30 reached 1.3 billion euros ($1.4 billion), an 11 percent increase over the same period the previous year and an all-time record for a three-month period often associated with lower earnings.
Sales rose seven percent to 8.2 billion euros.
The profit and sales figures were close to those forecast by analysts surveyed by financial data firm FactSet.
“Inditex continued with a very robust operating performance due to the creativity of the teams and the strong execution of the fully integrated business model,” the company said in its results statement.
Expanding its logistics capabilities in 2024 and 2025 will cost the firm 900 million euros annually, according to the announcement, “in view of the strong future growth opportunities”.
Online fast-fashion retailer Shein is putting more and more pressure on stores like Inditex, H&M, and others as it prepares to pursue a multibillion-pound listing on the London stock exchange.
