Yahoo Finance Zara-Owner Inditex Slips on Slow Return to Normalcy, Top Level Rejig
By Dhirendra Tripathi
Investing.com – Inditex (MC:ITX) stock fell 3.6% on Wednesday, pushing the Zara owner to the bottom of the Euro Stoxx 50 index, after the company's latest figures failed to dispel fears of a fresh hit to sales from the pandemic.
The company is still dependent on its physical stores for revenue, and expects online channels to account for only 25% of total revenue in the current fiscal year.
Zara said revenue was up 10% from pre-pandemic levels, both in the three months through October and in the subsequent six weeks.
The company added that revenue, EBITDA and net profit all hit record highs in the third quarter, as the reopening of its stores around North America and Europe unblocked a key sales channel in its biggest markets. However, over the first nine months of the year, profit is still lagging the 2.7 billion euro ($3.0 billion) reported in the same period in 2019, although it was more than triple last year's figure.
Anxiety over top level changes at the fashion brand has weighed on the stock in recent days. Founder Amancio Ortega will pass the chairman's baton to his daughter Marta in April. Óscar García Maceiras, general counsel and secretary of the Board, will take over as CEO with effect from 29th of this month.
Gross margins in the nine-month period were 59% and the company expects to close the year with 57.5%, plus or minus 50 basis points. One basis point is one hundredth of a percent.
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