Inditex sales leap by 10.4% as it invests in technology to fund further growth

Sales at Zara parent Inditex jumped by 10.4% to €35.9 billion in FY2023 and the Spanish fashion giant has announced it intends to invest around €1.8 billion in 2024 to fuel further growth.

The group, which also owns names such as Massimo Dutti, Bershka and Pull & Bear, said 2023 had been "very robust" across both stores and online and its collections had been "very well received". Sales in all geographical regions were up and when recorded in constant currency, sales overall were up 14.1%. Store sales were up 7.9% during the period while online sales were up 16% to €9.1 billion.

Profitability was also strong with EBITDA up by 13.9% to €9.9 billion and EBIT up by 23.4% to €6.8 billion. Profit before tax increased 28.2% to €6.9 billion, while gross margin reached 57.8%.

CEO Oscar García Maceiras said: "Inditex’s performance in 2023 has been excellent. Our teams have been able to take advantage of the opportunities to keep growing profitably. We are investing to drive future growth and continue to offer an attractive remuneration to shareholders."

The vast planned Capex for the coming year will be ploughed into technology to support its online sales in particular and into logistics. A two-year "extraordinary investment programme" will be focused on the expansion of the business and Inditex has allocated €900 million per year to increase logistics capacities in each of the 2024 and 2025 financial years.

Physical stores continue to be important with the group focused on creating more, higher-grossing, digitally enabled flagship stores. "Our ongoing store optimisation and digitalisation programme continues to be key. The higher level of store sales has been achieved with 2% more commercial space and 2% less stores than in 2022," the company said.

In 2023, Inditex opened stores in 41 markets, including the first Zara store in Cambodia. Significant openings in the UK included a digitally enabled store in the new Battersea Power Station development. The group also remained very active in "store optimisation activities" (192 openings, 231 refurbishments which include 84 enlargements and 315 absorptions). At the end of FY2023 Inditex operated 5,692 stores.