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Inditex Expecting Strong Profits Due to High Prices

Inditex Expecting Strong Profits Due to High Prices
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The first quarter (January-March) of the 2022 earnings report Inditex is set to publish. The company is optimistic that it will be able to report substantial profits. Analysts say that Inditex has gained this advantage as it has not negatively impacted sales despite higher prices than its competitors. The article is about Inditex Expecting Strong Profits Due to High Prices.

In this time of crisis over the cost of living, European retailers face a complex balancing measure to ensure the cost of delivering to consumers and the product’s affordable price. In addition, the Russia-Ukraine crisis and the lockdown in China over the COVID-19 epidemic have renewed pressure. However, Inditex’s profits are growing faster than any other brand. Inditex is mainly known for its corrosion brand. This brand provides 61% of its sales.

This company also faces much competition with the price of goods. However, consumers have always liked the idea of ​​Zara suddenly coming up with something new in the field of fashion. RBC analyst Richard Chamberlain said in a research note. “We expect Inditex sales to decline during the recession,” he said. Just like what happened during the crisis of 2008 and 2009. Customers stuck at home for two years are now thinking of rearranging their wardrobes. A study by UBS found that the starting price of corrosive products increased by 10 percent in January compared to the same month last year. In April, the company’s starting price rose 17.5 percent. The study looked at the rise in prices in the 12 leading markets of Zara’s website.

In contrast, the average retail price of other European clothing brands, such as H&M and Jalandhar, rose 4.2 percent in April. The eurozone also recorded inflation that month. According to the European Union’s statistics agency, inflation was 7.4 percent a month. Inditex released its first-quarter results on June 6, 2022. According to refinance data, analysts expect the company’s profit to rise 93 percent to 81.20 million. Inditex’s business suffered a setback last two years when shops closed due to the coronavirus pandemic. Moreover, Inditex has also suspended operations in Russia after Western sanctions were imposed following its aggression in Ukraine. The company’s online activities are also closed in the country; 502 shops are closed.

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