MADRID--Spain's Inditex SA (ITX.MC) said first-half net profit
rose 1% as sales growth slowed and the fast-fashion giant absorbed
a hike in value-added tax in Spain.
Net profit was 951 million euros ($1.27 billion) in the first
half, compared with EUR944 million a year earlier, the world's
largest fashion retailer by sales said in a Wednesday news
release.
The small profit growth comes after the company had a record
year of growth in 2012 and after a spring season where summer
clothing sales were weak due to bad weather in parts of Europe.
Six-month sales rose 8% to EUR7.66 billion. Like-for-like sales
rose 2% on year in the first half, down from a 7% annual growth
rate in 2012.
"We are satisfied with the performance," said Inditex's capital
markets director Marcos Lopez, adding the results "had been
achieved against very demanding comparables."
Analysts had flagged a lackluster performance but said they were
expecting growth to pick up over the summer, amid a recent
improvement in consumer spending in Spain and elsewhere in
Europe.
Sales in the first six weeks of the firm's fiscal third quarter
grew at an annual pace of 10% in local currencies.
Swedish rival H&M Hennes & Mauritz AB said earlier this
week that its sales had grown 14% in local currencies in
August.
Inditex continues to open more than a store a day on average,
but in the first half it opened fewer stores than last year. This
was partly because it is directing resources toward refurbishing
its Zara stores, one of its flagship brands. Inditex, which also
operates the Massimo Dutti and Bershka brands, had a total of 6,104
stores at the end of July, after opening 95 stores in the first six
months of the year.
Write to Christopher Bjork at christopher.bjork@wsj.com
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