Zara-owner Inditex reports 18% rise in Q1 net profit

Earnings before interest, tax, depreciation and amortization (EBITDA) were 1.1 billion euros, up 17 percent year-on-year and above estimates.

Inditex has outperformed its rivals such as H&M and others on a consistent basis the last few years thanks to its growth online and its fast fashion model that gives it the opportunity to move the latest trends quickly from runway to rack.

However, shares fell by 1.4% on Wednesday morning lagging behind the other blue chip stocks in Spain after the retailer said local currency sales increased 12% from February 1 through June 3 slowing from the growth of 14% between February 1 and April 30.

The positive currency market has also had an impact as almost half of its outlets report earnings in currencies other than the Euro.

Neiman Marcus reported its fourth consecutive quarterly loss on Tuesday of $24.9m, compared with a $3.8m profit for the three months to April previous year, as like-for-like sales slipped almost 5%. RBC's Richard Chamberlain said "Inditex continues to set the bar [high] for global multi-channel growth", and Liberum maintained its "positive view" on the stock.

Inditex Chairman and Chief Executive Officer Pablo Isla, when asked about the most recent trading trends on a conference call with analysts, declined to elaborate but said the business in its key Spanish home market remained "very healthy".

Inditex said all its brands increased their worldwide presence with new physical and online stores, including four new Zara online operations in Thailand, Malaysia, Singapore and Vietnam.

Inditex's net sales rose by 14% from the year before to €5.6 billion in the first quarter - also just above analysts' forecasts. Zara will launch online in India in the fall.

  • Zachary Reyes