Inditex reports a decline in its third-quarter net profit and sales

In a report on Tuesday, Inditex (ETR: IXD1) said that its sales and net profit in the fiscal third quarter noted a decline due to the ongoing Coronavirus pandemic that has so far infected more than 73 million people worldwide and caused over 1.6 million deaths.

Inditex opened more than 0.5% up on Tuesday but lost roughly 2.5% in the next hour. Including the price action, its stock (learn how to buy shares for beginners) is now trading at £24.54 per share versus a year to date low of £18.42 per share in March, when the impact of the COVID-19 crisis was at its peak. At the start of the year, Inditex had a per-share price of a much higher £29.00.

Inditex says its EBITDA stood at £1.69 billion in Q3

The fashion retailer, however, expressed confidence that its Q3 performance was better than the prior quarters of the ongoing financial year on the back of upbeat digital sales. In related news, peer H&M also said on Tuesday that its sales were 15% lower on a year over year basis in the fiscal fourth quarter.

Inditex said that its net profit in the quarter that concluded in October printed at £790.71 million versus the year-ago figure of £2.48 billion. The Spanish multinational reported £5.52 billion of sales in Q3 versus £6.39 billion in the comparable quarter of last year.

The clothing company said its EBITDA (earnings before interest, taxes, depreciation, and amortisation) stood at £1.69 billion in the recent quarter as compared to a higher £2.04 billion last year.

Inditex reports a 76% annualised growth in digital sales

The owner of prominent brands, including Zara, said digital sales jumped 76% in the third quarter, after a similar growth in online sales in Q2 as well. Inditex returned to profitability and generated £670 million of net cash in the prior quarter.

According to FactSet, experts had forecast Inditex to register £5.50 billion of sales in Q3. Their estimate for net profit in the recent quarter was capped at £754.19 million. Executive Chairman Pablo Isla expressed confidence in the company’s ability to quickly adapt to a challenging economic environment on Tuesday.

Inditex performed largely upbeat in the stock market last year with an annual gain of more than 40%. At the time of writing, the Spanish multinational clothing company has a market cap of £77.91 billion and a price to earnings ratio of 45.02.