Inditex, the world's largest fashion retailer, saw a net profit of 2.88 billion euros ($3.15 billion) in its 2015 fiscal year, a 15 percent increase over the previous year, the Spanish company announced Wednesday. The company, which owns the popular chain Zara, cited booming global sales of 21 billion euros during the fiscal year ending Jan. 31.
Inditex shares rose more than 4 percent during early afternoon trading in Madrid, after executives said in a call that they anticipated online sales would make up for a slowed expansion in Inditex's retail stores.
Inditex said it opened 330 stores — including flagship locations on Oxford Street in London and in the SoHo district of New York City — in 56 markets in 2015, for a total of more than 7,000 outlets throughout the world. It also rolled out online sales in Hong Kong, Taiwan, Macau and Australia last year, expanding its web presence to 29 markets.
The company also touted its creation of 15,800 jobs in 2015, including 4,120 in Spain, and its investment over the past year of more than 1.5 billion euros in global expansion, from a new logistics platform and storage and retrieval systems in Spain to new stock management technology throughout 1,542 stores.
Inditex plans to spend more than 1.5 billion euros in 2016 to open stores in Vietnam, New Zealand, Paraguay, Aruba and Nicaragua, the Wall Street Journal reported. Besides the popular brand Zara, Inditex, which is short for Industria del Diseño Textil SA (Textile Design Industry), also owns brands including Massimmo Dutti, Bershka, Stradivarius and Oysho.
Inditex said that during its annual July meeting, its board of directors would ask shareholders to approve a dividend payment of 0.60 euros, an increase of more than 15 percent from the previous year. The company indicated Wednesday that although previous targets indicated its retail spaces would grow 8 to 10 percent in the coming years, it has lowered its growth target to 6 to 8 percent.
Those adjustments were expected to save on costs, leaving long-term revenue “unchanged,” Simon Bowler, an analyst for Exane BNP Paribas, wrote in a report after Inditex published its 2015 results. “Future sales growth should be achieved at lower capital intensity,” Bowler wrote, the Wall Street Journal reported.