Higher sales and margins boost Inditex Q1
- Q1 profit jumps 28% to EUR521m
- Sales up 17% to EUR4.37bn
- Driven by better like-for-like sales and margin expansion
Zara will launch online in Hong Kong, Taiwan and Macao
Spanish clothing giant Inditex beat market expectations with a 28% increase in first-quarter net profit, thanks to better-than-expected like-for-like sales and margin expansion.
The company, whose brands include Zara, Pull & Bear and Bershka, said net profit reached EUR521m (US$590.6m) during the three months to 30 April, compared to EUR406m in the same period a year ago. This was 3.3% above consensus expectations of EUR504m.
Sales rose 17% to EUR4.37bn from last year, with like-for-like sales growth in all regions. Gross margin improved 50 basis points to 59.4% from 58.9% in the prior year.
Having opened 63 new stores in 27 different markets during the period, the group now operates 6,746 bricks-and-mortar stores in 88 markets.
The group reiterated plans to launch online sales for its Zara brand in Taiwan, Hong Kong and Macau in 2015 taking the total number of online markets to 30.
Year-to-date sales in constant currency terms are up by 13.5%.
Bernstein analyst Jamie Merriman described Inditex’s performance as a "cracking start to the year", adding: "We expect the stock to be up today given strong constant currency sales growth both in Q1 and so far in Q2, as well as the strong gross margin and operating margin performance."
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