Zara owner Inditex reveals record annual sales and surging profits

Zara owner Inditex has reported record annual sales and strong demand for its new spring and summer fashion collections.

The fashion retail giant, which also owns brands including Bershka and Pull & Bear, told investors its financial performance in the last year had been “excellent”.

It reported a 10.4% jump in sales to 35.9 billion euros (£30.7 billion) in 2023, compared with 32.6 billion euros (£27.9 billion) the previous year. At fixed exchange rates, sales surged by 14.1%.

Spring and summer fashion collections have been very well received by customers, with sales off to a strong start in recent weeks, it added.

The group, which has nearly 5,700 stores around the world, said online shopping increased at a faster rate than in stores, but that it has benefited from optimising and digitising its shops.

Zara is among the fashion chains to have rolled out self-service checkouts in some of its stores.

Meanwhile, Pull & Bear has launched a new video shopping experience in its mobile app.

The retailer has also been gradually introducing new security technology, which is set to replace security tags with tiny chips amid efforts to deter shoplifters.

Inditex revealed its pre-tax profit for the year surged by more than 28% to 6.9 billion euros (£5.9 billion) compared with the previous year.

Earnings before interest, taxes and other costs also hit a record high of 9.9 billion euros (£8.5 billion).

It had been forced to set aside hundreds of millions of euros to cover expected expenses for leaving its Russian business in 2022, following Russia’s invasion of Ukraine.

Chief executive Oscar Garcia Maceiras said Inditex has “rigorous” control over business expenses, as the group looks to keep costs tightly reined in.

“Inditex’s performance in 2023 has been excellent,” he said.

“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 Spanish company makes most of its sales in Europe, but also has a large network of stores in America and Asia.

Inditex said it will continue to focus on design-led fashion collections, including leather for Zara women, linen for Zara Home, and tailoring for Bershka.

It said it is investing about 900 million euros (£770 million) a year into new warehouses as part of a two-year growth programme.

It also revealed plans to reopen around 50 stores in Ukraine over 2024.