Zara owner Inditex posted a net profit of 1.1 billion euros less than forecasted 1.3 billion euros in 2020, according to the company’s press release. The net profit is a 70% drop from the previous year but the company expects sales to become “very healthy” as soon as stores reopen by mid-April.
In Q4 2020, Inditex net profit fell 53% to 435 million euros, less than the forecasted 602 million euros, a bigger decline than the 26% slump in Q3 2020 due to further coronavirus restrictions in Europe.
Inditex total sales for 2020 fell 28% to 20.4 billion euros, with a 25% drop in Q4 2020
Online sales rose 77% from the previous year, offsetting sales decline.
Excluding its five significant markets of Germany, Brazil, Greece, Portugal, and Britain, Inditex’s like-for-like sales in the first week of March grew 2%.
The company rolled its radio frequency technology, attached as a chip to the alarm on clothing to keep track of stock on all its brands this year, keeping inventory down 9%.
The clothing company returned to its ordinary dividend policy of 60% payout and bonus dividends to be paid in May and November 2021.
Inditex has closed 751 of the 1,200 stores it plans to shut by the end of the year in favor of flagship locations serving online and in-person customers.
Inditex stock is currently declining. ITX is down 0.17%
