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Fast Fashion Giant Inditex Group Sees 13% Sales Growth in First Quarter

On June 7, Zara's parent company, the Spanish fast fashion giant Inditex Group, announced key financial data for the first quarter of the 2023 fiscal year ending April 30: the 2023 Spring/Summer collection was widely acclaimed, and both physical stores and online channels performed well, driving sales in the quarter up 13% year-on-year to EUR 7.6 billion, or 15% in constant currency, with growth in all regions.

Inditex Group

The group stated that in the first quarter of fiscal year 2023, thanks to the creativity and execution of the team and the fully integrated business model, Inditex continued to maintain a very strong operating performance. At the end of the first quarter, inventory levels were up 5% from a year earlier as supply chains gradually normalized. Between May 1 and June 4, the Spring/Summer collection continued to be popular with customers, with sales up 16% at constant exchange rates compared to the same period last year.

Inditex Group

In May, Inditex started its business in Cambodia, opened a Zara flagship store in the Chip Mong Super Shopping Center in Phnom Penh, and launched online sales in the Cambodian market through the official website channel.

As of April 30, the main data of the Inditex Group for the first quarter of fiscal year 2023 are as follows:

Net sales reached 7.6 billion euros, a year-on-year increase of 13%, with a gross profit margin of 60.5%.

EBITDA reached 2.2 billion euros, a year-on-year increase of 14%.

Profit before tax was 1.5 billion euros, a year-on-year increase of 52%.

After the release of the financial report, as of the close on June 7, Inditex Group’s share price rose by 5.7%. Since the beginning of this year, the group’s share price has risen by more than 35%, and its current market value is about 104.6 billion euros.

Sustainability is a key part of Inditex's strategy. According to the sustainable development roadmap goals, Inditex is on track to achieve all the goals set from 2023 to 2025.

Inditex Group

Last year, Inditex participated in the US$30 million Series B financing of Circ, a textile waste recycling company. In April this year, Zara and Circ cooperated to launch the first capsule collection of women's clothing, which uses recycled polyester fibers separated from polyester-cotton textile waste.

Inditex Group

Meanwhile, Zara Pre-Owned, the resale platform Zara launched last autumn, will move out of the UK and into France, Germany, and Spain in the second half of this year. Through this platform, the group will continue to help customers extend the life cycle of Zara garments by donating, restoring, or reselling them.

At present, Inditex operates in 213 markets around the world. Considering that it has a low share in a highly fragmented industry, the group plans to realize more growth opportunities by improving store sales efficiency. In 2023, the growth of Inditex's total store area will reach about 3%, and store optimization is in progress.

ZARA store

In order to further optimize the customer experience in stores and online platforms, Inditex Group has formulated the following measures:

Zara new store design: As one of the group's recent important projects, Zara's new store will be designed by Inditex's Architectural Studio, which will organically combine complex interiors with digital technology and apply it to the store's fitting rooms, self-checkout areas, pick-up points, storage rooms, etc. At present, the design of the new store has been reflected in Zara stores in many places around the world, such as the Champs Elysees in Paris, Stratford in London, Dadeland in Miami, and Phoenix Avenue in Mumbai.

New security technology for stores: In July, Zara stores will launch new hardware around the world that adopts new security technology and will start trial operations in autumn and winter this year.

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