• 9-month net income edged up 1% to EUR1.67bn 
  • Sales rose 5% to EUR11.93bn 
  • Zara to launch online in South Korea and Mexico

Spanish fashion retailer Inditex has reported a 1% rise in net profit during the first nine months of its financial year, helped by online growth and store expansion.

The owner of the Zara fashion chain today (11 December) said net profit reached EUR1.67bn (US$2.3bn) during the first nine months of the year to 31 October, up from EUR1.66bn in the same period of last year.

Sales rose by 5% to EUR11.93bn from EUR11.36bn in the prior year, but grew 8% in local currencies. Like-for-like sales growth remained "strong", the company said.

During the fourth quarter, Inditex said store sales in constant currency terms increased by 10% - suggesting that growth is accelerating in the run-up to Christmas. 

Inditex opened 240 new stores in 54 markets during the period, while enlarging more than 100 flagship stores and enhancing key locations.

Over the the year, the group's store count has risen by 79 to 4,545 in Europe, by 54 in the Americas to 536 and by 107 in Asia and the rest of the world - bringing the total in this region to 1,168.

The retailer continued to expand its online platform during the third quarter, opening online stores for five of its sales formats in Russia. In addition, Zara plans to launch e-commerce operations in South Korea and Mexico next year.

Commenting on the results, Conlumino analyst David Alexander said: "While the economic malaise has proved challenging for Inditex’s competitors, the Galician goliath has seen an extraordinary period of expansion in recent years.

"Such outstanding growth was always likely to be unsustainable in the long term and to some extent the group has been a victim of its own success as it has meant each new set of financial results must face off against tough comparatives.

"Results this year were always going to be judged against the stellar performance of 2012 that exceeded all expectations and, as the group approaches maturity in its core markets, a slowdown was inevitable."

"The era of meteoric growth may be over, but Inditex seems to have a solid plan in place for the future. Focusing on expanding its online presence and on consolidating its position within existing markets looks like a sound strategy and should stand the retailer in good stead for the challenges ahead." 

Alexander added: "The fast-fashion business model is ideally suited to this channel and there is plenty of scope for growth."