Market Analysis: Autumn And Winter Series Sales Of Textile And Garment Industry Are Gradually On The Right Track

INDITEX (Zara's parent company) released the second quarter report of 2020 (April 30, 2020 to July 31, 2020). In the second quarter of 2020, the group realized revenue of 4.73 billion euro, a year-on-year decrease of 31.4%, and the decline rate was improved compared with the first quarter; the gross profit was 2.58 billion euro, with a year-on-year decrease of 31.3%; the net profit attributable to the parent company was 210 million euro, a year-on-year decrease of 73.7%; the operating expenses during the period was 2.27 billion euro, a decrease of 15.8%. The gross profit margin, operating profit margin and net profit margin of the company in the second quarter were 54.6%, 6.6% and 4.5% respectively, with a year-on-year change of 0.1, - 8.8 and - 7.3 PCTs. The main reason for the positive growth of gross profit rate was due to Zara's supply chain advantages. As of Q2, the company's inventory decreased by 19% year-on-year.

By channel. Sales in May, June and July decreased by 51%, 28% and 17% respectively year-on-year. From August 1 to September 6, the sales volume decreased by 11% year on year, and the decline rate was narrowed month on month. According to the company's performance meeting, most of Zara's stores have reopened by the end of July, and 98% of the stores have resumed operation. However, passenger flow is still limited to ensure the health and safety of consumers. In the first half of the year, the group opened new stores in 14 markets, with a total of 7337 stores as of Q2. Online, the company successively launched Zara online business in 12 countries and regions such as Argentina and Peru. In the first half of the year, online sales increased by 74% year-on-year, thanks to the company's continuous global integrated digital platform and online and offline unified inventory system.

According to the market. H1 Europe (excluding Spain), Spain, the United States, Asia Pacific and other regions accounted for 48.9%, 14.7%, 12.0% and 24.4% of total sales respectively.

By brand. H1 group's Zara, zarahome revenue was 5.53 billion euro, a year-on-year decrease of 37.8%, accounting for 68.9% of the total revenue; pull & Bear revenue was 580 million euro, a year-on-year decrease of 33.8%, accounting for 7.2%; Massimo dutti's revenue was 490 million euro, a year-on-year decrease of 41.9%, accounting for 6.1%; Bershka's revenue was 690 million euro, a year-on-year decrease of 35.9%, accounting for 8.6%; Stradivarius revenue was 500 million euro, a year-on-year decrease of Euro 500 million The revenue of oysho and uterq ü e decreased by 35.3%, accounting for 6.2%; the revenue of oysho and uterq ü e was 240 million euro, a year-on-year decrease of 32.3%, accounting for 3.0%.

Performance outlook. (1) Autumn and winter series customer response is very good, sales growth rate has gradually entered the right track. (2) The group still regards the sustainability of the supply chain as the strategic key and continues to open up the online and offline inventory sharing system. (3) The group is still committed to building highly differentiated stores and will actively invest in opening, expanding and renovating stores in the coming months. According to the company's performance meeting, the annual capital expenditure during 2020-2022 will be around 900 million euro, including 1 billion euro expected for digital transformation during the period. (4) The group will actively cover the online market not involved. According to the company's performance meeting, the company will strive to achieve global online business coverage by the end of the year. It is expected that the online market will account for more than 25% in 2022.