During the past year, my first full year with the privilege of serving as Inditex’s CEO and also the year in which we welcomed Marta Ortega Pérez as our non-executive chairperson, our Group delivered outstanding results from all perspectives. Our teams, coupled with our strong corporate culture, once again demonstrated their ability to tackle any challenge, no matter the complexity, as they have been doing throughout Inditex’s journey: from its origins as a small clothing maker to become one of the most important players in global fashion retail today.
Excellent business performance
During the reporting period, between 1 February 2022 and 31 January 2023, we delivered on all of the commitments we had made to our stakeholders, as detailed throughout the various chapters of this Annual Report, and our Group performed extremely well. Group revenue increased by 18% year-on-year, underpinned by growth in sales in all geographies with a strong correlation between the increase in traffic to our physical stores and online, where our business reached new records.
Sales growth was accompanied by strong profitability: our gross margin reached record levels and stringent control saw operating expenses up three percentage points lower than our topline growth. As a result, net profit came in 27% above that of 2021 and our net cash topped the €10,000-million mark for the first time.
Hard-working and committed team
None of those figures would be possible without the talent and creativity of our designers, the excellent work done by our commercial professionals, logistics and corporate departments at each of our brands, and the commitment of our store teams, made up of more than 140,000 people whose dedication takes our customers’ shopping experience to the next level.
Every team member plays an active role in Inditex’s strategy and that of its brands, Zara and Zara Home, Massimo Dutti, Pull&Bear, Bershka, Stradivarius and Oysho. They all share our passion for fashion, our determination to offer quality, on-trend products, as well as our tireless efforts to improve the customer experience in our physical stores and online, and the conviction with which we are progressing on the delivery of our sustainability commitments. Identifying and nurturing talent is another of the strategic cornerstones of the Inditex model.
Pioneering sector transformation
We are aware of our duty and ability to lead the transformation of our sector towards a more sustainable and circular pathway. We believe that innovation, strongly embedded into Inditex’s culture, is a key component of that transformation. And we believe that working in collaboration is the best strategy. We set multiple transformational initiatives in motion in 2022 and worked intensively on others that will materialise in the near future. Our hard work in recent years has helped us to achieve some of our targets ahead of schedule and make substantial progress in our energy and water efficiency, improving our supply chain processes, markedly increasing the use of preferred fibres and extending our products’ life cycle, to name a few.
We reiterated and reinforced our commitment to the United Nations Guiding Principles on Business and Human Rights and to the Global Compact and its principles, and the Sustainable Development Goals. In keeping with our transparency pledge, over the coming pages we seek to provide a detailed account of the progress we have 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.
Commitment to each other and our communities
Ultimately, our top priority is people: those who make up our Group and those who we interact with, such as our customers and suppliers, and those who are part of the communities where we do business. With all of our relationships and especially with our own teams, we promote the values of diversity and inclusion, which is promoted at all levels, and we support and develop employment opportunities for the most vulnerable. Our community investment increased in 2022: we earmarked over €87.9 million to community projects that benefitted more than 3 million people.
I want to take this opportunity to express the pain we’ve been feeling for Ukraine since February 2022 and the terrible consequences the war is having on its citizens and those who have had to leave the country. And in 2023, our thoughts are also with the victims of the earthquake in Turkey and their families, sadly including colleagues at Inditex. We intend to continue to support the communities where we can be of use, mainly in partnership with the organisations with which we have built long-standing, stable relations.
In this respect, at Inditex we want to have a positive impact across our activities including on the environment and our communities; on people within and beyond the Group; and on our value chain, including our suppliers and business partners. We want to do this in collaboration with our partners while leveraging our ability to lead. And always ensuring we operate with humility and prudence, but with extraordinary ambition and embracing the fashion industry’s transformational power.