The world's largest fashion group, Inditex, reported its first quarterly loss Wednesday, as it described being "materially impacted" by the coronavirus pandemic.
The company, which owns Zara, reported a net loss of 409 million euros ($465 million) for February through April, in comparison with a net profit of 734 million euros over the same period in 2019. The loss included a provision of 308 million euros for its store optimization program, which will continue until 2021 despite of pandemic.
Sales fell to 3.3 billion euros from nearly 6 billion euros in the first quarter of last year.
The loss came despite a a 50% increase in online sales in the first quarter, and a 95% jump in online sales in April. Inditex expects online sales to represent more than 25% of its total sales by 2022. At the end of 2019, online transactions made up 14% of net sales.
At the end of April, Inditex had 965 stores open in 27 countries, out of a total of 7,469 stores (as of year-end 2019).
Despite an increase in sales in May, Inditex said they are "not yet at normal levels."
Some economies started to slowly lift their lockdown measures in May, but there are still widespread social distancing measures that prohibit large concentrations of people in the same place.
Inditex said that its store and online sales in local currencies in May fell 51%.
The company's shares shares are down about 18% since the start of the year. Inditex shares were hovering around the flatline in the first trading hours in Europe.
The group is planning to pay a dividend of 35 cents per share in relation to its 2019 full-year performance in November. It also said that the remainder of the bonus dividend for 2020 and 2021, at 78 cents per share, will be distributed in 2021 and 2022.