Zara owner profit jump 20 percent on higher sales
Spanish global clothing giant Inditex, owner of the Zara brand, posted Thursday a 20-percent surge in nine-month net profits thanks to higher sales as the economy in its home market Spain improves.
The group said in a statement that net profit rose to 2.0 billion euros ($2.2 billion) between February and October.
The results are in line with expectations from analysts polled by Factset who forecast the company would post profits of 2.01 billion euros.
Expansion efforts had weighed down last year's results, but profits rose this year by a greater margin than the healthy 16.6-percent rise in sales to 14.7 billion euros.
"This is the fastest rate of sales growth in three years," said Victoria Torre, an analyst at Self Bank in Madrid.
In constant currency terms sales were up by 15 percent during the period and continued to rise at that rate in the start of the final quarter in the lead up to the crucial Christmas shopping season.
Investment bank Jefferies said the company benefited from the success of its fall-winter collection despite "the impact of an unusually mild winter in Europe."
Inditex also benefited from growing demand in its home market Spain, which in 2014 posted its first full-year growth since 2008 when a decade-long property bubble burst, throwing millions of people out of work. Spain accounts for about a fifth of its revenue.
The company, which competes with Sweden's H&M as the world's top ready-to-wear clothing retailer, continued its expansion by opening 230 stores in 48 markets and adding 13,079 jobs in the first nine months of its 2015 fiscal year.
Inditex also stepped up its online presence to Taiwan, Hong Kong and Macau, with Internet shopping sites now available in 28 countries.
Inditex shares were down 1.72 percent at 31.99 euros in early afternoon trade on Thursday in Madrid.
© 2015 AFP