CEO's Statement

Fashion is a personal selection we make every day to express our identities. It also reflects the social changes and trends unfolding in the world around us. At Inditex we are proud to make quality and affordable fashions for millions of people worldwide, helping them express their individuality, what moves them, what unites them. This Annual Report provides an account of Inditex’s performance in 2023, our identity, our attention to detail to offer quality products that meet our customers’ demands, while evidencing our own evolution and the progress we have made on transforming our sector.

The following chapters contain all the key figures for the year, which was characterised by sharp sales growth. Behind those figures, however, are the people who make Inditex what it is: without their dedication we would not be the company that we are. Our results primarily demonstrate primarily the good work done by our more than 161,000 professionals.  

2023 was marked by significant complexity and instability. That is nothing new. Uncertainty has become the almost permanent status quo in which we have to carry out our businesses. Our strong corporate culture, the hallmarks of which include careful decision making, committed professionals, being nimble and thinking outside the box, sets us apart and give us an edge in these times. It allows us to continue to bring the beauty that is fashion to millions of people.

Solid earnings performance

In recent years we have continued to cement our position as a benchmark in fashion retailing, honouring all of the commitments assumed with our stakeholders, as set out in this report, which has translated into an impressive earnings performance. 

Consolidated revenue registered year-on-year growth of over 10%, driven not only by the creativity, sensitivity and merit of our design and product teams, but also the mutual support provided by our physical stores and online platforms to provide our customers with memorable experiences. In 2023, the Group’s websites received over 6.5 billion visits. That means that our brands’ online stores welcome over 18 million visits on average per day. 

Astute management of that healthy topline growth materialised in a noteworthy gross margin and rigorous control of operating expenses. As a result, net profit came in 30% above that of 2022 and our net cash position topped the €11 billion mark. 

These are very good results. But we know that the future is not a given. Our spirit is restless and requires us to constantly think outside the box. As a result, throughout 2023 we continued to innovate: we continued to make our physical stores increasingly attractive and search for new ways to reach our customers; and we continued to fine-tune our online shopping experience. And while we worked on our most visible interfaces, we also reinforced our inner workings, shoring up our logistics and distribution networks. We plan to continue to invest in these areas as they are vital to supporting our company’s ongoing growth. 

Our sustainability ambitions

This report demonstrates just how much effort was put into sustainability advances in 2023. The strength of that commitment is borne out by our decision to set ourselves ambitious targets for driving an increasingly sustainable and more circular value chain throughout our company and beyond. Those targets are the new framework for engaging with the various players in our value chain.

In 2030, 100% of the fibres used by Inditex will have a smaller impact on the environment: they will be fibres that expert organisations such as the Textile Exchange term ‘preferred’ fibres. More specifically, around 40% of the fibres used by our brands will be the result of conventional recycling processes; around 25% will be next-generation fibres (that do not currently exist, or at least not at an industrial scale); and 25% will hail from organic or regenerative farming practices.

Last year we also culminated the roll-out in 16 markets of Zara Pre-owned, our platform for the repair, customer-to-customer resale and donation of used clothing with which we are lengthening the useful life of our products and helping our customers give their clothing a new life, actively contributing to industry circularity. We are already working to bring that platform to other major markets for the brand.

In 2023 we informed the Science Based Targets initiative of our intention to reduce our emissions by over 50% by 2030, going on to achieve net zero emissions by 2040.

Our people

Caring for our people and their wellbeing was a priority for us once again, as was our unwavering desire to allow them to realise their full potential. In 2023 we covered 72% of our vacancies through internal promotion, provided over two and half million hours of training to our teams and involved more than 2,200 employees in internally communicating our sustainability strategy. 

At Inditex we are very aware that the diversity of our teams is a tremendous source of innovation and creativity. We have people of 174 different nationalities within our team, diverse people from a myriad of backgrounds (creative, commercial, technical) all working together. In parallel, we bolstered our workforce integration programme, hiring more than 1,800 people from vulnerable groups in 18 markets. I believe, however, that in this area principles count more than numbers in that we are committed to fostering equal opportunities and take a zero-tolerance stance towards any form of discrimination. 

Our community commitment

Our Group’s responsibility goes beyond our stores and value chain in an effort to generate positive impacts on our broader business communities. Our community investment programmes remain fundamental tools for contributing to development in the societies and geographies in which we do business. In 2023 we supported 910 social and environmental initiatives through partnerships with 476 community organisations, prioritising strategic, long-term projects. In addition, our people have dedicated more than 338,000 hours to community projects.

With these initiatives, we directly benefitted more than 4.3 million people. At the same time, we worked to protect, restore and regenerate 5 million hectares globally for biodiversity enhancement purposes.

We continued to reinforce our commitment to the United Nations Guiding Principles on Business and Human Rights and to the Global Compact and its Sustainable Development Goals. Over the coming pages we attempt to provide an account of the progress made in all of these areas, ensuring the integrity of the data reported and upholding, in our concluding sections, the principles of the Integrated Reporting framework.

It would be remiss of me to sign off without referring to one of our greatest strengths. In a world in which everything seems to be changing quickly, Inditex boasts solid roots and a shareholder and financial structure that allows us to set our sights – truly – on the long term. Our stability is what allows us to be extraordinarily flexible and nimble when required of us by the market environment or our customers. With more investment, more innovation and doubling down on what we truly believe in, here at Inditex we are ready to continue to thrive among change.