Zara Owner Inditex Posts Sales Growth at Start of Fall-Winter Season — Update

By Andrea Figueras

Zara parent Inditex said sales continued to grow at the start of its fiscal third quarter, boosted by interest in its collections for the fall-winter season, as the fashion group invests to fend off competition from the likes of China's Shein.

The Spanish company--home to other brands such as Massimo Dutti, Pull & Bear or Bershka--said Wednesday that sales grew 11% at constant currency between Aug. 1 and Sept. 8, compared with the same period last year.

Inditex reported sales of 18.06 billion euros ($19.91 billion) for the first six months to July 31, against analysts' forecasts of 17.98 billion euros, according to consensus estimates provided by Visible Alpha. Sales grew around 10% on year on a constant currency basis, slowing slightly from the 11% rise the company logged in the first quarter, but picked up again at the start of the current quarter.

It made net profit of 2.77 billion euros for the first half, matching analysts' expectations and rising from 2.51 billion euros in the year-earlier period.

Operating profit rose to 3.54 billion euros from 3.16 billion euros previously, with a margin that expanded to 19.6% from 18.8%.

Inditex confirmed its guidance for the current fiscal year. It targets a stable gross margin in the current fiscal year plus or minus 50 basis points from the 57.8% it achieved in the fiscal year ending Jan. 31.

"We expect increased sales productivity in our stores going forward," it said, adding that growth of annual gross space in the period between 2024 and 2026 is expected to be around 5%.

Inditex also expects a strong evolution of online sales, while it continues to optimize its stores.

The company said it now expects a 3% negative currency impact on full-year sales, while it previously forecast a 2% negative impact.

The group appointed Antonio Florez de la Fuente and Jordi Triquell Valls, directors of the group's brands Bershka and Stradivarius, respectively, to its management committee.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

September 11, 2024 02:47 ET (06:47 GMT)

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