Zara owner Inditex shrugs off Spanish crisis to post profit jump
Though analysts have become used to the world's largest clothing retailer beating expectations, some were taken aback by how well the company had done in the face of a slowing global consumer economy and a collapse in confidence in its home markets.
Inditex owns Zara as well as Pull & Bear, Massimo Dutti and Bershka. Though it has shops in 85 countries around the world, 40pc of its sales come from the troubled southern European markets of Portugal, Italy, Greece and Spain.
Net profit for the period rose 30 per cent to €432m (£348m), compared with the same period last year, on revenues that grew 15.4pc to €3.4bn, exceeding analysts' forecasts. This level of growth is in comparison with its main international rivals H&M, where sales increased 5pc, and The Gap, where sales were flat.
Analysts at Mirabaud said: "This incredible growth will offset the market’s doubts regarding the high exposure of Inditex to the Spanish market as well as other southern European countries.”
Simon Chinn, analyst at the retail consultancy Conlumino, pointed out that retail sales in Spain had fallen by 10pc last month. "Inditex’s resounding success has come from the development of a diversified portfolio both in terms of the geographical spread of its operations and the number of concepts it trades from internationally. This has helped limit its exposure to the dire situation in its domestic market and other austerity-struck eurozone countries."