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Inditex’s Q1 net profit soared 80% to €760 million

The world’s biggest clothing retailer Inditex has confirmed its recovery from the pandemic by delivering higher sales, profits and cash generation than it recorded prior to Covid-19.

Between May and July, the company’s revenue hit £5.96 billion, surpassing the previous high recorded in the same period in 2019 and helped by a recovery in consumer demand and the expansion of its online sales.

In results the retailer said net profit for the three month period struck a record of £725 million while cash reserves rose to £6 billion compared with £5.54 billion in July 2020 and £5.74 billion two years earlier.

In March last year it wrote off £245 million in inventories and a month later reported its first loss as a public company of £349 million.

The fourth quarter last year also suffered as infection rates rose once more and many stores closed their doors once again however Inditex managed to step up its online sales using its tracking technology to source many online orders from its stores, even when they were closed to the public.

The retailer said it expects online sales to account for more than a quarter of the total for the year as a whole while in 2019, online represented just 14 per cent of total sales.

The group said that this year it had opened or expanded flagship Zara stores in locations including Barcelona, Cairo and Guangzhou and was planning others in the City of London, Paris and Cape Town.

At the end of July, the group had 6,654 stores across the world.

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