Spanish retail giant Inditex reported a first-quarter net profit of 421 million euros ($513 million) on Wednesday, a number that easily beat analysts’ expectations but was still a third below pre-pandemic levels for the same period a year ago.
Six analysts polled by Refinitiv had estimated a net profit of 359.29 billion euros for the home of the Zara clothing chain.
Revenue for the February-April quarter reached 4.9 billion euros, 25% more than in the first quarter of 2020, but still well short of 2019’s 5.93 billion euros.
Online sales were up by two-thirds from last year as lockdowns kept stores across the world closed or operating under limited capacity for much of the quarter.
The company said 98% of its stores had reopened by June 6, but with around 10% fewer opening hours available due to pandemic-related restrictions. A total of 24% of business hours were lost through the quarter to store closures and restrictions.
Sales between May 1 and June 6 more than doubled compared with the same period last year, and were up 5% compared with the same period in 2019, indicating a post-lockdown spike in demand also seen by other retailers including Next and Abercrombie & Fitch Co..
“The results show a progressive recovery even as they have been materially affected by the health situation with the temporary closure of stores in key markets like the U.S., France, Germany, Italy, Portugal and Brazil,” the company said.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at 1.23 billion euros, nearly triple last year’s earnings, but still 27% below 2019 levels.
The company’s shares closed at 32.3 euros on Tuesday, matching pre-pandemic levels for the first time since March 2020.
Photo: View of a logo of Zara clothing company in a store in Berlin, Germany. EPA-EFE/FELIPE TRUEBA