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Inditex recovery on track as first-quarter sales beat forecasts

Inditex reported first-quarter profits ahead of expectations on Wednesday, as the Spanish retail giant’s recovery from the pandemic continued.

The owner of Zara said sales in the three months to 30 April rose 48% to €4.9bn, while earnings before interest, tax, depreciation and amortisation increased to €1.2bn from €484m a year previously.

Net income was €423m, compared to a €409m net loss in 2020. Analysts had forecast net profits closer to €359m, according to Reuters.

Inditex said: “The initial spring/summer collection collections were very well received by our customers. Throughout the first quarter, store sales have progressively improved and online sales in constant currency grew 67%. [The] results show a strong recovery in operations.

“Despite the disruption caused by lockdowns and restrictions, the strength of the business model is reflected in high sales productivity.”

Looking to current trading, store and online sales in constant currency between 1 May and 6 June increased 102% year-on-year, and by 5% compared to the same period in 2019. “The recovery continues to gain momentum,” Inditex said.

A total of 98% of stores were open during the period to 6 June, but 10% of trading hours were unavailable because of lockdown restrictions. At the close of the first quarter, 84% of shops were open and 24% of trading hours were unavailable.

Shares in the retailer were down 2% as at 1130 BST.

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