Spanish fashion retailer Inditex Group (IDEXF.PK) Wednesday posted a 30 percent increase in profit for the first quarter on the back of a 15 percent growth in sales that benefited from new store openings.
Inditex operates in eight store formats - Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe. It is made up of over 100 companies involved in textile design, manufacturing and distribution. The group is present in 84 markets with 5,618 stores.
In the first quarter that spanned between February 1 and April 30, net income increased to 432 million euros ($540 million) from last year's 332 million euros.
Net sales climbed 15 percent to 3.42 billion euros from 2.96 billion euros. The growth was 14 percent in local currencies.
The world's largest clothing retailer said growth in store sales in local currencies between February 1 and June 10 also stood at 14 percent. Gross margin improved to 60.2 percent from 58.8 percent.
Inditex opened 91 new stores during the quarter in 26 different markets. The Zara brand plans to launch its online store in Mainland China in September.
The retailer's stellar results come against a background of headwinds facing the domestic economy. The country has been at the center of debt fears in the eurozone this week. Over the weekend, it sought a 100 billion euros bailout from the European Union to shore up its banking systems. However, fears remain that the debt contagion will spread to other countries in the region.
Spanish borrowing costs on Tuesday rose to its highest level since the country adopted euro more than a decade back. Fitch Ratings downgraded 18 Spanish banks on Tuesday, a day after it lowered its rating on two other lenders from the nation.
Further, the firm said its Board of Directors agreed on Tuesday to appoint José Arnau Sierra to the Board. He will replace Francisco Luzón López.
The stock added 0.30 percent in Madrid on Tuesday to close at 67.58 euros on a volume of 2.17 million shares.
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by RTT Staff Writer
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