Inditex Group's sales grew by 11% in local currencies in 1Q 2014

11/06/2014
  • Net sales amounted a total of €3.7 billion and net profit was €406 million
  • In the past 12 months the Group has created over 8,000 new jobs, 700 of which were in Spain
  • The Group opened new stores in 26 different markets during the first quarter, bringing its worldwide network to 6,393 stores in 88 markets
  • During Autumn/Winter season, Zara will roll out its online platform in South Korea and Mexico and will also enter the Tmall e-commerce platform in China
  • The Board of Directors will propose a 5-for-1 stock split at the upcoming Annual General Meeting
  • Store sales in local currencies increased by 11% between 1 February and 8 June 2014

The Inditex Group sales in local currencies grew by 11% in the first quarter of 2014 (1 February to 30 April), demonstrating a strong operating performance. Reported sales affected by currency impact reached €3.7 billion, up 4% year-on-year. Net income amounted to €406 million, compared to €438 million in the first quarter of 2013.

The Group continued to generate employment, creating over 8,000 new jobs over the past 12 months, 700 of which were in Spain, where it continues to earmark capital expenditure for facility expansion.

The new distribution centre in Cabanillas (Guadalajara) is in the process of ramping up operations, while the extended headquarters in Arteixo (Galicia) and the Massimo Dutti logistics platform in Tordera (Catalonia) are fully operational.

Key figures (first quarter 2014)

(€ millions)

1Q14

1Q13

Net sales

3,748

3,593

Gross Profit

Gross margin

2,208

58.9%

2,140

59.6%

EBITDA

732

749

EBIT

530

559

Net Income

406

438

 

6,393 stores in 88 markets

All of Inditex's brands continue to expand internationally. The global store network reached 6,393 stores across the Group's 88 operating markets following 53 net openings in 26 different markets during the first quarter. Zara opened new stores in 19 different countries during the quarter, all of which introduced the new store concept. Openings in Seattle (US), Sydney (Australia) and Rome (Italy), were particular highlights, as well as Zara's flagship opening in Madrid (Spain) on Serrano Street, one of Europe's most important shopping districts.

Pull&Bear, which opened stores in 12 different markets during the quarter, inaugurated a flagship store in the heart of Milan's shopping district, on Corso Vittorio Emanuele, in May. In addition, Zara Home has continued its expansion in Japan, where it opened several stores, including its flagship in Tokyo's elegant Aoyama district. Stradivarius also launched in Japan in the quarter, and will launch its first store in the UK later this year.

In parallel, the Group's various formats continued to update their market propositions; specifically, Massimo Dutti, Bershka and Uterqüe presented their new store images during the quarter. Massimo Dutti and Uterqüe also opened stores in Terminal 4 of Adolfo Suárez-Barajas airport (Madrid, Spain). Meanwhile, Oysho continued its international expansion, introducing its new sports line at sporting events in cities such as Milan, Barcelona and Madrid.

As for the Group's online reach, Zara plans to launch its e-commerce platform in South Korea and Mexico in the month of September. These two new markets will join the 25 in which the Group is already selling online (21 European markets, the US, Canada, Japan and China). In parallel, Zara will widen its offer in China through the launch of an online store in the Tmall e-commerce platform in the 2014 Autumn/Winter season.

Start of 2Q14

Between 1 February and 8 June 2014, sales in local currencies increased by 11%.

Inditex has scheduled its Annual General Meeting for 15 July. The Board of Directors will propose to shareholders a FY2013 total dividend of €2.42 per share, of which €1.21 was already paid out on 2 May 2014 with the remaining balance to be paid on 3 November 2014.

The Board will also propose a 5-for-1 stock split, i.e. shareholders will receive five shares for every share they own at the close of business on 25 July, 2014. The new shares will begin trading on 28 July, 2014.

Subject to the approval of the proposed stock split to the General Shareholders Meeting, the final dividend payable on 3 November 2014 would be €0.242 per share.