INDITEX Inditex Group revenues grew 17% in the first quarter of 2015 (1 February - 30 April) to €4.37 billion, driven by a solid business performance with LFL sales growth in all geographical areas. Net sales in constant currencies grew 13%. Net profit amounted to €521 million, 28% more than in the first quarter of 2014.
The Group has generated 8,580 new jobs in the past twelve months, 1,671 of which are in Spain. Regarding Inditex's employees, to note is the recently-approved profit-sharing plan under which employees will participate in Inditex's earnings growth in 2015-2016. All employees of the Group's stores, manufacturing and logistics operations, retail chains and subsidiaries around the world who have been employed for more than two years will be eligible to participate. The Group will award these beneficiaries 10% of the year-on-year growth in profit attributable to the parent company up to a cap of 2% of total consolidated profit.
Furthermore, Inditex continues to invest in the Group's growth and international expansion through capital expenditure. The expansion of Zara Home's distribution hub in Cabanillas (Guadalajara, Spain) is a particular highlight in the first quarter. These new facilities include the most technologically advanced distribution equipment such as fully automated sorting equipment to dispatch products even more efficiently. This important technology will also be introduced at other platforms such as the Bershka facility in Tordera.
Key financial indicators (1Q15) | |||
(€ m) | 1Q15 | 1Q2014 | 15/14 |
Net sales | 4,374 | 3,748 | 17% |
Gross Profit Gross margin | 2,597 59.4% | 2,208 58.9% | 18% |
EBITDA | 895 | 732 | 22% |
EBIT | 664 | 530 | 25% |
Net profit | 521 | 406 | 28% |
Inditex continues to expand its integrated store and online platform internationally. At the end of the first quarter, the Group had 6,746 bricks-and-mortar stores in 88 markets, having opened 63 net new stores in 27 different markets during the period. In parallel, concepts opened new online operations in the 27 markets in which the Group already has an e-commerce presence.
Zara
The most prominent new Zara stores included openings in cities such as London (61 Oxford Street), as well as refurbished and enlarged stores in Tokyo (Ikebukuro), Belfast (Donegall Place), Tel Aviv (Ayalon Mall in Ramat Gan), Montevideo (Punta Carretas), New York (the store on Fifth Avenue and 42nd street doubled in size) and Copenhagen (on Vimmelskaftet).
Between May and June Zara also opened important new stores in cities such as Beijing and Urumqi in China, Vladivostok in Russia and Hamburg in Germany, as part of the strategy to focus on openings in main shopping districts and emblematic buildings.
Other brands
The Group's other brands also continue to actively expand. Zara Home's debut in two benchmark southern hemisphere markets stands out: Australia and Chile, where it opened stores in Melbourne and Santiago (Las Condes), respectively. The expansion completed at the brand's flagship store in Milan's Piazza San Babila was another milestone.
Pull&Bear inaugurated a flagship store in Shanghai, on one of the world's most important shopping streets, East Nanjing Road, where the Group already operates Berhska and Zara stores. Stradivarius also opened flagship stores in Madrid and Mexico City (Madero 67).
Oysho, which opened prominent new stores in Barcelona's airport, Moscow, Lublin (Poland) and Las Palmas (Spain), also inaugurated a new flagship store on Barcelona's Paseo de Gracia in May. This store presented the concept's new store image, which features sculptures against a backdrop of marble, brick and glass.
Massimo Dutti opened stores in Marseilles (France), Qingdao (China) and Bangkok (Thailand); Bershka opened a flagship store in Turin (Italy) and also opened stores in Fujimi (Japan) and Riyadh (Saudi Arabia); Uterqüe, meanwhile, unveiled its new flagship store on Madrid's prestigious calle Serrano. These are examples of the dynamic nature of Group's expansion effort in the first quarter.
Online
With regards to online, all brands were active over the period. Notably, Bershka launched its online sales platform in China, while Uterqüe launched online in Denmark and Sweden. This effort continued in May with Zara Home and Oysho launching online operations in Japan and China, respectively (see appendix).
Zara plans to launch online operations in three major markets in Asia (Hong Kong, Taiwan and Macao) by September, at the start of the Autumn/Winter 2015 season.
The brands also ran a number of commercial initiatives. Some of the most noteworthy include the new gymwear collection at Pull&Bear as well as its collaboration with graphic artist Frank Kozik; Uterqüe's Ethnic project, featuring prominent Spanish blogger Gala González (photo); Bershka's Getwild collection: Oysho's beachwear line; The Runway competition at Stradivarius; Massimo Dutti's exclusive Equestrian and Fifth Avenue collections, along with the launch of its revamped personal tailoring line this week in Paris, introducing significant design and customer service novelties; and Zara Home's presence at the ARCO Contemporary Art Fair in Madrid from 24 to 28 February, in collaboration with Belgian artist Thierry Boutemy, who garnered the spotlight throughout the event.
This successful artistic endeavour with Boutemy was replicated at the Furniture Fair (Salone Internazionale del Mobile) in Milan between 14 and 19 April at which Zara Home also presented the expansion of its global flagship store in Piazza San Babila. Zara, Massimo Dutti and Oysho all participated in Salone with the display of dynamic art installations.
2Q15 trading update
Sales in constant currency terms rose by 13.5% between 1 February and 7 June 2015.
Inditex has scheduled its Annual General Meeting for 14 July. The Board of Directors will ask the company's shareholders to approve the payment of a total dividend from 2014 profits of €0.52 per share, €0.26 of which was already paid out on 4 May 2015; the balance would be paid on 3 November 2015. The Board of Directors of Inditex will propose the appointment of Mr. José Luis Durán to the Board for approval at the AGM on 14 July 2015. He will replace Nils Anderssen, who has announced his decision not to stand for re-election as a Board member once his tenure expires at the AGM. Inditex would like to thank him for his significant contribution to the Board over the years.
Appendix
Global online sales platform (as of 10 June 2015; in bold the online stores that went live in 2015) | |
Austria | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe |
Belgium | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe |
Canada | Zara, Massimo Dutti, Zara Home |
China | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho |
Denmark | Zara, Pull&Bear, Massimo Dutti, Zara Home, Uterqûe |
Finland | Zara Home |
France | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe |
Germany | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe |
Greece | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe |
Ireland | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Zara Home, Uterqüe |
Italy | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home |
Japan | Zara, Zara Home |
Luxembourg | Zara, Pull&Bear, Massimo Dutti, Stradivarius, Oysho, Zara Home, Uterqüe |
Mexico | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home |
Monaco | Zara, Pull&Bear, Masimo Dutti, Zara Home, Uterqüe |
Netherlands | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe |
Norway | Zara, Massimo Dutti, Zara Home |
Poland | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home |
Portugal | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe |
Romania | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius |
Russia | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe |
South Korea | Zara |
Spain | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe |
Sweden | Zara, Pull&Bear, Massimo Dutti, Oysho, Zara Home, Uterqüe |
Switzerland | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Zara Home, Uterqüe |
United Kingdom | Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe |
United States | Zara, Massimo Dutti, Zara Home |
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