Zara owner Inditex SA, the world’s biggest fashion retailer, reported record profits for last year, despite halting operations in Russia and soaring global inflation.
Net profit reached 4.1 billion euros (US$4.4 billion) last year, a 27 percent jump from 2021, said Inditex, whose eight brands include younger fashion chain Pull&Bear and upmarket label Massimo Dutti.
Sales also hit a record, surging 17 percent to 32.6 billion euros.
Photo: Bloomberg
“The excellent results of 2022 show the strength of our business model,” Inditex CEO Oscar Garcia Maceiras said.
Inditex, like many other Western companies, closed up shop in Russia last year following the invasion of Ukraine and sweeping Western sanctions against Moscow.
The group shut its 514 stores in Russia, its second-biggest market after Spain.
The shops were sold to Emirati group Daher, which has business interests in retail and real estate, in October last year.
Inditex also overcame a surge in production costs that has hit manufacturers, as inflation soared following Russia’s assault on Ukraine.
The Spanish group said it expects further growth this year, with sales from Feb. 1 to Monday already up 13.5 percent compared with the same period last year.
Meanwhile, Swedish rival Hennes & Mauritz AB (H&M) yesterday reported a 12 percent increase in December-February net sales, or up 3 percent in kronor terms.
H&M, the world’s second-biggest fashion retailer, said net sales for the period, its fiscal first quarter, rose to 54.9 billion kronor (US$5.2 billion).
Analysts polled by Refinitiv had on average forecast an 11 percent rise in net sales to 54.4 billion kronor.
It said in a statement that excluding Russia, Belarus and Ukraine, the rise in net sales was 16 percent, and in kronor terms, 7 percent. It did not comment further on the quarterly sales.
Budget player H&M last year saw profits tumble as it, seeking to retain its price-sensitive customers, did not fully pass on soaring raw material, freight and energy costs to its price tags.
Additional reporting by Reuters
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