The Inditex Group's first-quarter net sales rose by 12%

  • The Group generated over 11,936 new jobs, 2,385 of which were in Spain.
  • Pablo Isla highlighted that "thanks to the Group's strong growth we are able to generate jobs in all our business markets, most notably, in Spain".
  • In April, the company distributed 10% of the growth in consolidated profit generated in 2015 among employees as part of its extraordinary employee profit-sharing plan.
  • Inditexachieved a strong operating performance, with like-for-like sales growth in all l geographies.
  • Sales growth in constant currency was  17%.
  • Net ssales totalled €4.9 billion. Net profit rose by 6% to €554 million.
  • Inditex has extended its reach to 91 markets having opened its maiden stores in Aruba, Nicaragua and Paraguay.
  • The Group's eight brands opened stores in 31 different markets during the first quarter, bringing its worldwide network to 7,085 stores.

The Inditex Group registered net sales growth of 12% in the first quarter of 2016 (1 February - 30 April) to €4.9 billion, driven by a solid business performance and shaped by like-for-like sales growth in all geographical markets. In constant-currency terms, revenue growth was 17%. Net profit amounted to €554 million, 6% more than in the first quarter of 2015.

The Group has generated 11,936 new jobs in the last twelve months, 2,385 of which were in Spain. It is worth highlighting that in April the Group also distributed the 10% of the growth in consolidated profit of 2015 among the Group's staff employed in its stores, manufacturing and logistics facilities, brands and subsidiaries under the scope of its extraordinary employee profit-sharing plan. The second phase of this scheme will be distributed in 2017, following the same criteria.

Key financial indicators (1Q 2016)

(€ billions)

1Q 2016

1Q15

YoY 16/15

Sales

4,879

4,374

12%

Gross Profit

Gross margin

2,834

58.1%

7.491

59.4%

9%

 

EBITDA

955

895

7%

EBIT

705

664

6%

Net income

554

521

%

 

Inditex's Chairman, Pablo Isla, highlighted that "thanks to the Group's strong growth we are able to generate jobs in all our business markets, most notably, in Spain".

In parallel, the Group continues to invest in its online and international expansion to support the continued modernisation of the Group and its operations. One highlight is the expansion of Pull&Bear's head offices, which now occupy 20,000 square metres over two floors. The building was constructed according to the eco-efficiency parameters set out to comply with LEED Gold green building certification to ensure efficient consumption of water and energy. The complex features 30,000 square metres of green space on which around 1,000 trees have been planted.

Growth across all regions

During the first quarter, Inditex expanded its reach to 90 markets, having opened inaugural stores in Aruba and Nicaragua. Zara, Pull&Bear and Bershka made their début in Nicaragua with stores in Galerías Santo Domingo, one of Managua's most prominent shopping centres. Zara's maiden store in Aruba is situated in Plaza Daniel Leo – one of the main shopping streets in the country's capital, Oranjestad. 

In addition, all of the Group's brands continued to expand globally with their fully integrated offline and online store model. At the end of the first-quarter, the Group had 7,085 physical stores, having opened a net 72 stores in 31 markets. 

Some of the most noteworthy openings included the Zara store in the heart of New York's SoHo district, in a cast-iron building which epitomises the late-nineteenth century retail architecture emblematic of this part of Manhattan. In addition, Pull&Bear opened its first store in Luxembourg, on Grand Rue; Zara Home made its début in South Africa and Serbia with new stores in Johannesburg and Belgrade, respectively; Stradivarius opened its first flagship store in Amsterdam, the Netherlands; and Oysho opened its maiden store in Belgium, in the city of Knokke. 

It is also worth highlighting the refurbishment and expansion work carried out at the Bershka store on Vittorio Emanuele in Milan (Italy) and the Massimo Dutti store on Avenida Presidente Masaryk in Mexico City, one of the country's most important shopping streets. 

The Group also remained very active throughout May and June. For example, Zara and Zara Home were the first brands to establish a presence in Paraguay, while Massimo Dutti inaugurated its first store in India (watch the video), Stradivarius opened its largest-ever store on London's Oxford Street and Pull&Bear opened a flagship store in Stockholm (Sweden). 

With regards to online, all of Inditex's brands expanded their ecommerce platforms in the European Union, having launched their online stores in Bulgaria, Croatia, Slovakia, Slovenia, Estonia, Finland, Hungary, Latvia, Lithuania, Malta and the Czech Republic (see appendix). As a result, Inditex now has an ecommerce presence in a total of 39 markets worldwide. 

Agreement with IndustriALL

In the first quarter, Inditex also took its framework agreement with IndustriALL Global Union, which represents over 50 million workers in 140 countries, to a new level. On 25 April the two parties both extended and strengthened the original agreements, reached in 2007 and renewed in 2014, to bolster the implementation of mature industrial relations within the retail group's supply chain. This has become a unique agreement in the sector. 

Under the scope of the newly-expanded agreement, union experts will join Inditex's regional hubs in its manufacturing markets, known as clusters, in order to monitor, supervise, assist and accompany the Group's suppliers all around the world. Inditex's 11 existing clusters are in Spain, Portugal, Morocco and Turkey – the most important supplier regions for the Group, as well as in Vietnam, Cambodia, Bangladesh, India, Argentina, Brazil and China. The agreement was signed during the High-level Conference on Responsible Management of the Supply Chain in the Garment Sector organised by the European Commission in April.

In addition, Inditex and IndustriALL will develop specific agreements for the various clusters to address the needs of each supplier region. 

Giving back to the community

In the first quarter, Inditex also made significant investments in community programmes as part of its commitment to support humanitarian disasters, education and employment leading to social wellbeing. It is worth highlighting the €200,000 contribution to the emergency relief fund set up by the Entreculturas Foundation in Ecuador when the north of the Country was ravaged by a devastating earthquake. These emergency funds are being used to bring basic necessities –mainly medicines, water and food– to the affected areas and to help build temporary housing for the people who have lost their homes. The money is also being used to create temporary educational programmes so that affected schools can get back up and running as soon as possible.

Over the quarter, Inditex also participated in the creation of the Chair for Refugees and Forced Migrants together with Universidad Pontificia de Comillas. The aim of the project is to support academic research in the field of migration, providing direct and on-the-ground assistance to refugees and migrants and publicising these initiative in order to raise awareness. Specifically, this Chair will drive the research agenda to better understand the global migration situation and to create projects in this field to support migrants with a focus on social integration in Spain and Europe. 

In Spain, meanwhile, the company added to its For&From programme with the inauguration of a Massimo Dutti store in Igualada (Barcelona) in collaboration with the non-profit organisation, Moltacte. This new store has created 15 jobs, 10 of which are for people with learning disabilities. 

Second quarter trading update

Sales in constant currency rose by 15% between 1 May and 13 June 2016.

Inditex has scheduled its Annual General Meeting for 19 July. The Board of Directors will ask the company's shareholders to approve the payment of an overall dividend from 2015 profits of €0.60 per share, €0.30 of which was already paid out on 3 May 2016; the balance would be paid on 2 November 2016. 

Irene Miller will leave the Board of Directors of Inditex once her tenure expires at the AGM on 19 July 2016. Inditex would like to thank her for her significant contribution to the Board over the years. The Board of Directors of Inditex will present for approval at the AGM the appointment of Baroness Denise Kingsmill to the Board. 

Global online sales platform

(as of 30 April 2016; in bold the online stores that went live in FY16)

Australia

Zara Home

Austria

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Belgium

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Bulgaria

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

Croatia

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Czech Rep.

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Denmark

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Finland

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

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

Hungary

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Ireland

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho,  Zara Home, Uterqüe

Italy

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Japan

Zara, Zara Home

Latvia

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Lithuania

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Luxembourg

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Malta

Zara, Pull&Bear, Massimo Dutti, Bershka, 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, Uterqüe

Portugal

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Romania

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Russia

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Slovakia

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Slovenia

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, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Switzerland

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

Taiwan

Zara

United Kingdom

Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe

United States

Zara, Massimo Dutti, Zara Home