Inditex And H&M Shake Off Pandemic Blues

Zara’s parent company, Inditex, and its rival H&M are seeing sales return to pre-pandemic levels or better, with the two companies succeeding in resolving their supply chain issues.

For Inditex, sales at constant currencies were up 10% compared to the quarter ending October 2019 and are continuing to climb in December thanks to improving online demand. Meanwhile, H&M saw its sales reach pre-pandemic levels between September and November.

“The recovery continues to gain momentum,” Inditex’s Capital Markets director Marcos Lopez said.

Still, shares of both Inditex and H&M were 3% lower in early trading, with the emergence of new Coronavirus strains such as the Omicron variant weighing down stock market trading.

“The main short-term risk we see for Inditex is further restrictions on stores and travel flows due to the Omicron variant, especially in southern Europe,” said RBC analyst Richard Chamberlain.

In Q3, Inditex reported sales of 7.3 billion euros and net profit of 1.2 billion euros, which was in line with market expectations, according to Reuters.

“We can say that it is a very healthy evolution of the business globally,” said Pablo Isla, who will begin serving as Inditex’s executive president starting March 31. “We have total confidence in our unique business model,” he added.

H&M, on the other hand, saw sales rise to $6.22 billion between September and November, which was the company’s fiscal fourth quarter.

While the two companies registered an increase in sales, the challenges arising from the pandemic are still continuing to impact their business.

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Originally published at https://retailbum.com on December 16, 2021.