© Reuters. FILE PHOTO: A shopper carries a bag from a Zara clothes store, part of the Spanish Inditex group, in Bilbao, Spain, November 30, 2021. REUTERS/Vincent West/File Photo
MADRID (Reuters) -Zara owner Inditex (BME:) on Wednesday posted a 32.5% rise in nine-month net profit to meet forecasts yet sales slowed for the fast fashion giant amid tougher times for consumers.
The world’s biggest fashion retailer reported a net profit of 4.1 billion euros ($4.42 billion) for the period to end-October, in line with analyst forecasts, most of whom are still betting on the company’s ability to sell draw more aspirational shoppers.
The company behind Zara and other brands is investing in bigger but fewer stores and logistics capacity to back up its online sales and to deliver clothes faster than its rivals, according to analysts.
Its sales, in stores and online, rose by 11% versus 19% a year earlier, but it outperformed its main rival H&M (ST:) , as analysts had forecast. Its gross margin reached 59.4%.
Sales grew 14% in local currencies between Nov. 1 and Dec. 11, showing a good start to the holiday shopping season, with Zara offering 40% discounts during Black Friday week.
Sales between August and October grew by 7%, less than the 16% growth seen in the second quarter.
Unseasonably warm weather may have affected sales in several markets, said Patricia Cifuentes, a senior analyst in the securities division of Spanish fund managers Bestinver.
“The weather throughout Europe has been extremely adverse, it has been a particularly warm October and Inditex makes 60% of its sales in Europe,” Cifuentes told Reuters.
The fast-fashion retailer’s results came one day after it was forced to pull a campaign by Zara which triggered calls for a boycott after some saw the imagery of statues wrapped in white as evoking corpses in shrouds in Gaza.
($1 = 0.9276 euros)
