SPAIN: Profits rise 27% at Zara owner Inditex
- 9-month net income surges 27% to EUR1.66bn (US$2.2bn)
- Net sales climbed 17% to EUR11.36bn
- Added 360 new stores, taking group total to 5,887
The company, which also owns the Massimo Dutti, Bershka and Pull & Bear formats, saw net income surge to EUR1.66bn (US$2.2bn) in the period from 1 February to 31 October, up from EUR1.3bn a year earlier.
During this time, it added 360 new stores in 54 markets - taking the total number of stores operated by the group worldwide to 5,887.
The addition of these new stores helped lift net sales by 17% to EUR11.36bn. In constant currency terms, net sales increased by 15%.
The retailer said its strong performance has continued into the early fourth quarter, with store sales in constant currency terms rising by 15% between 1 August and 9 December.
"Inditex's strategy of diversifying its sales worldwide continues to pay dividends, reducing its exposure to the difficult European market," notes Matt Piner, lead consultant at retail analyst Conlumino.
"The group's flexibility, with its various brands and willingness to adapt its approach and products to local markets, has helped it quickly gain traction in new countries."
He adds that the group's "breadth of local suppliers across Europe and Africa has insulated it from rising production costs in Asia.
"Moreover, tight control of its supply chain also provides Inditex with the ability to deliver products from conception to stores within a fortnight, allowing it to rapidly react to changing trends and styles."
Piner concludes: "With the global outlook remaining extremely tough for 2013, Inditex will struggle to maintain its stellar growth rates, particularly on a like-for-like basis."
But he believes the group will "undoubtedly continue to outperform its peers," thanks to its online growth and the planned addition of up to 520 stores this year.
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