Summary List Placement
Zara owner Inditex said it had reached a “turning point” after its quarterly net profit bounced back to 214 million euros ($254 million), from a loss of 409 million euros ($486 million) the previous quarter.
The Spanish fashion retailer, which also owns Pull&Bear and Bershka, reported net sales of 4.7 billion euros ($5.6 billion) in the May-to-July quarter, up from 3.3 billion euros ($3.9 billion) the previous quarter.
But its net sales for the first half of 2020 dived by a third compared to the same period last year, even though online sales grew by 74%.
Inditex made a loss of 198 million euros ($235 million) in the first half of the year, it said, compared to a 1.55 billion euros ($1.8 billion) profit in the first half of 2019. A 308 million euros ($366 million) store renovation program accounts for some of those losses, it said.
On Tuesday, Intidex rival H&M Group reported $229 million in quarterly profits — 10 times higher than analysts had forecast. Its sales were 19% down on the same period in 2019, compared to a 32% drop for Inditex, though H&M’s quarter started a month later, when more customers were visiting stores after lockdown.
Despite falling sales, Inditex has continued expanding into new markets. So far in 2020, Zara has launched online sales in 12 countries across South America, Europe, and North Africa including Argentina, Tunisia, and Chile. Zara will also launch online sales in four Central American countries later this month.
By mid-September, 98% of Inditex’s stores had reopened after lockdown, it said.
SEE ALSO: These are the tricks that Zara uses to figure out the styles you want before you even do
Join the conversation about this story »
NOW WATCH: Why thoroughbred horse semen is the world’s most expensive liquid
Source:: Business Insider