By Christopher Bjork
By Christopher Bjork
MADRID-- Industria de Diseño Textil SA said Wednesday that net
profit surged 28% in the first quarter, as the fast-fashion pioneer
behind the Zara chain posted growth in stores on five continents,
getting an additional uplift from a weakening euro.
The Arteixo, northwestern Spain-based retailer said net profit
was EUR521 million ($577.97 million) between Feb. 1 and April. 30,
compared with EUR406 million a year earlier. Sales grew 17% to
EUR4.37 billion.
The results were ahead of market expectations. Analysts polled
by FactSet had expected net profit of EUR509 million and sales of
EUR4.33 billion. "A cracking start to the year," said Sanford C.
Bernstein analysts.
Marcos López, Inditex's capital markets director, said the
results reflected "a very strong operating performance with
positive like-for-like sales growth in all geographies."
For the first time in two years, the world's largest fashion
retailer by sales received a boost from the weakening euro compared
with other currencies. That helped further propel sales and profit
growth. Bernstein estimated that the impact of stronger currencies
outside the eurozone added 3.7 percentage points to sales. By
contrast, currency effects had subtracted 7% from sales in the
quarter a year earlier.
Inditex said sales in stores and online in constant currencies
grew 13.5% between Feb. 1 and June 7, compared with growth of 11%
in 2014. Société Générale analyst Anne Critchlow said this implies
that like-for-like sales were growing 6.5% in the first six weeks
of the second quarter.
Inditex opened 63 new stores during the quarter, 10 more than a
year earlier. It had 6,746 stores as of April 30. Almost a third of
the openings were Zara Home stores, the company's home furnishing
concept.
The apparel maker plans to open online stores in Taiwan, Hong
Kong and Macao this year, taking its online presence to 30
countries.
Write to Christopher Bjork at christopher.bjork@wsj.com
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