Zara parent firm posts profit jump after strong sales

Zara owner Inditex has revealed a sharp rise in profits on the back of strong sales of its spring-summer product lines.

The fashion business, which also owns the Pull & Bear and Bershka, saw pre-tax profits jump by 39% to £2.85 billion (€3.3 billion) over the first half of 2023.

It came as the company also slowed down price increases to customers after efforts to reduce cost inflation.

Inditex told shareholders that sales grew by 13.5% over the half year to £14.6 billion (€16.9 billion), with growth both in stores and online.

It said this included a 13.1% increase in sales at Zara to £10.7 billion (€12.4 billion).

Oscar Garcia Maceiras, CEO of Inditex, said: "The 2023 H1 results demonstrate that the talent of our teams continues to consolidate the improvements in the performance of our business model.

"The ongoing commitment to creativity, quality and customer experience, as well as the determined progress in sustainability, drives a strategy that is taking our business to the next level."

Aarin Chiekrie, Equity Analyst at Hargreaves Lansdown, said: "Sales growth continues to outpace higher operating costs.

"It’s a testament to the success of the group’s optimisation strategy, which prioritises closing smaller stores to focus on bigger ones in prime locations.

"That tactic’s set to continue, with floor space expected to grow 3% this year despite a much lower number of open stores.

"It’s bold moves like that which are helping the group to maintain its impressive margins."