In The First Quarter, The Net Profit Of ZARA'S Parent Company Dropped By The Largest Margin In Five Years
According to the data disclosed by Inditex, in the first fiscal quarter up to the end of April this year, the company's net profit was 410 million dollars, down 7.3% year on year, and its operating revenue increased 4.3% year on year to 3.75 billion euros.
Inditex's profit decline cannot be simply attributed to poor management, but more to euro Appreciation. According to the data compiled by Bloomberg, from February to April this year, ten major currencies in the world depreciated more than 1.7% against the euro. Europe is the main market of Inditex. Bloomberg shows that as of the end of January 2013, Inditex's revenue in the EU was nearly 5.5 billion euros, accounting for 34% of the total revenue. Another 22% came from Spain, and 18% from the OECD, whose members include Australia, Belgium, Canada, Japan, etc.
Nevertheless, Inditex's performance in the first fiscal quarter was still better than analysts' expectations, which can also explain why Spain The listed Inditex stock price rose instead of falling, rising 1.7% to 112 euros, with a cumulative decline of 6.5% this year.
It is worth mentioning that with the recent decline of the euro, it may help to improve Inditex's profitability. According to statistics, 18 of the world's top 20 currencies have appreciated against the euro since May, among which the top three performers are the Russian ruble (6.4%), the Colombian peso (5.4%) and the Chilean peso (4.4%).
At present, institutions generally predict that the adjusted net profit in the second fiscal quarter will decline by 0.2% year on year, which will be narrower than that in the previous quarter. Inditex said that the revenue from February 1 to June 8 increased by 11% year on year.
Interestingly, Inditex The gross profit rate in the first fiscal quarter was 58.9%, 0.9 percentage points higher than that in the previous quarter, which was largely due to the online sales of the company.
SanfordC. Bernstein analyst Jamie Merriman said that e-commerce is helping Inditex improve its gross profit margin, because the cost of increasing revenue through online expansion is low, and e-commerce may increase short-term revenue.
Inditex sells online in 25 markets around the world, in order to hedge the slowdown of sales growth in China. In September this year, ZARA will open online sales channels in Mexico and South Korea. In addition, Inditex will expand its e-commerce business through Tmall platform in autumn and winter.
In addition, Pablo Isla, CEO of the company, said in the recent investor conference call that the gross profit rate will remain stable for the rest of this year, e-commerce has good scalability, and it is very easy to open stores online.
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