Zara’s 30% Expansion And 2022 Outstanding Results

Zara is a major division of Inditex of Spain. It is a public company and trades on Bolsa del Mercado Espaňola (BME) and on the automatic system since May 23, 2021. It operates just under 100 stores in the U.S. at this time. Plans for a 30% expansion have been announced which includes new stores, relocations and enlargements of stores. The 30 units will be added or enlarged between 2023 and 2025.

The company has indicated that the work will take place in New York, Los Angeles, Miami, Chicago, Boston, Dallas, Austin, Texas and Las Vegas.

Other exciting news is that the company’s fiscal year 2022 was outstanding. Inditex reported net income increase of 27% to €4.1 Billion ($4.4 Billion). Sales reached €32.6 billion ($35.2 billion). In fiscal 2022 sales rose 23%, reflecting greater foot traffic and increasing store productivity. The higher achievement was accomplished with 10% fewer stores and 6% less commercial space than in 2021. Zara’s ongoing store optimization and digitalization continues to be the key to the success.

In 2022 Inditex opened stores in 33 markets. The group remains very active in store optimization and digitalization.

Inditex continues to see strong growth opportunities. Key priorities are to continually improve the products, to enhance customer experience and to increase Zara’s focus on sustainability. In the coming years, Zara intends to extend it differentiation to take its business model to the next level.

POSTSRIPT: The great performance of Zara enhances the Inditex empire. Based on their forecast one can expect more improvements and greater productivity. The company now operates in 213 markets and the company sees real growth opportunities. The company talks about investments that will scale their capabilities and obtain efficiencies. They expect to increase sales productivity and growth. The board of directors will propose a dividend increase of 29% to €1.20 ($1.296) a share compared to an ordinary dividend of €0.796 ($0.859) and a bonus dividend of €0.404 ($0.424} per shar. The dividend will be made in two equal payments on May 2, 2023 and November 2, 2023. Each of these payments will be for €0.60 ($0.648) per share (€0.196 ($0.212} ordinary dividend + the €0.404 ($0.436) bonus). That adds to the excitement.