Fashion giant Inditex, owner of Zara, has reported a suresulrge in sales and profits but booked a substantial provision for the costs of Russia’s invasion of Ukraine. 

Zara store Kyiv

Inditex closed all of its stores in Ukraine and Russia

Inditex posted revenue growth of 36% to €6.74bn (£5.73bn) in the quarter to April 30, when net income profit of €760m (£646m) was up 80% year-on-year.

The retailer said performance reflected “a sharp recovery in store footfall” following the pandemic and gross margin of 60.1% was the highest in a decade.

Inditex said it has made a €216m (£184m) provision this year for estimated costs arising from the impact of the war in Ukraine, which led it to close stores there and in aggressor nation Russia following the invasion in February.

Otherwise, Inditex reported that “growth was robust across all geographies” and the US “continued to post notable growth, cementing its position as the group’s second biggest market”.

Inditex, which also owns Bershka and Pull & Bear, said it has “retained almost all of the extraordinary online growth” achieved in the first quarter of last year as online sales fell 6% year on year.

In the current quarter, sales increased by 17% in constant currency between May 1 and June 5.

Inditex chief executive Óscar García Maceiras said the performance was a testament to a well-differentiated model that is delivering strongly. The strength and adaptability of the business model and the excellent performance of our creative, sales and operating teams are driving that differentiation forward, underpinned by a strategic focus on innovation, digitalisation and sustainability.”

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