Inditex, which owns fashion bigwigs like Zara and Massimo Dutti, returned to profit in its second quarter despite a slump of 31 per cent in its sales.
In the present quarter, its bricks-and-mortar and e-commerce sales at constant exchange rates have fallen by 11 per cent from what it was a year back.
The second quarter saw Inditex post an impressive net profit of €214 million – what makes the number stand out is that it is much ahead than analysts’ prediction of €96 million.
The first half witnessed Inditex clocking a whopping 74 per cent jump in its e-commerce sales – expectedly so as people bought lot of products from home with almost every store closed.
During the first half, the Group posted a total loss of €195 million on sales down 37 per cent. It, however, said that it could have made profit in first half too had it not booked a€308 million charge related to its physical store-e-commerce integration.
Zara’s rival H&M too had said earlier this week that its profit before tax reached US $ 230 million in Q3 despite sales fall of 16 per cent.
Inditex hopes that the third quarter will see it return to normalcy as e-commerce sales are growing fast and physical store sales too are growing gradually.
Inditex is the biggest fashion group in the world with 7,200 stores across the globe.