[MADRID] Zara owner Inditex, the world’s biggest fashion retailer, reported a record annual profit for the third consecutive year on Wednesday (Mar 12) due to dynamic sales and higher prices.
The Spanish group, which owns seven other top brands including Massimo Dutti, Pull & Bear and Bershka, posted a net profit of 5.87 billion euros (S$8.5 billion) in the fiscal year which ended on Jan 31, up from 5.38 billion euros in 2023, which was also a record.
The figure, which follows a solid fourth quarter, matched the expectations of analysts polled by financial data firm FactSet.
Inditex pointed to “very satisfactory” sales which hit 38.6 billion euros in 2024, a 7.5 per cent increase from the previous year.
The group, which has introduced price hikes to offset rising production costs due to inflation, said “collections have been very well received by our customers”.
By comparison, Inditex’s main rival in the fast-fashion industry, Sweden’s H&M, saw its sales slip in 2024 due to greater competition from low-priced Asian online retailers such as Shein and supply problems.
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Looking head, Inditex said it was optimistic about the new year given that sales rose 4 per cent between Feb 1 and Mar 10 when compared to the same time last year.
Billionaire Amancio Ortega is set to receive 3.1 billion euros in dividends this year from Inditex, the retail giant he founded more than six decades ago, the first time he’s surpassed the 3 billion euros threshold.
The owner of the Zara apparel chain announced on Wednesday it plans to increase its dividend by 9 per cent this year to 1.68 euros a share. Ortega, whose daughter Marta is the company chairwoman, is the largest shareholder with a 59 per cent stake through his family office Pontegadea.
Ortega has a net worth of about US$105.3 billion, making him the 14th wealthiest person in the world as of Tuesday, according to the Bloomberg Billionaires Index. That came before Inditex reported slower sales at the start of the year, sending the shares down the most in three years and hitting his net worth.
Ortega usually uses the bulk of the dividends to buy real estate – mostly high-end commercial and residential properties in large cities across Western Europe, Canada and the US. Pontegadea is also an investor in renewable energy projects as well as power, gas and telecom infrastructure. AFP, BLOOMBERG
