IDEXY Industria De Diseno Textil Inditex SA (PK)

By David Román 

MADRID--Industria de Diseño Textil SA, the retailer behind the Zara fast-fashion chain, Thursday said it plans to launch online operations in all European markets next year, as it posted third-quarter results that exceeded expectations.

Inditex, as the Spanish company is commonly known, said net profit in the period rose 20% on the year to EUR2.02 billion ($2.21 billion) in the nine months to October 31. It didn't provide separate numbers for its fiscal third quarter, but a Wall Street Journal calculation shows third-quarter net profit rose 13% on the year to EUR854 million.

Sales grew 15% to EUR5.32 billion, this calculation shows, as the company continued a strong pace of new store openings, adding 136 stores in the third quarter and 230 overall during the first three fiscal quarters of the year, the same amount it added in the comparable period of 2014. Inditex currently has 6,913 stores all over the world.

In a trading update for the company's ongoing fourth fiscal quarter,

Inditex said that sales in local currencies grew 15% over the period between November 1 and December 3, in line with the previous nine months--a performance that, analysts say, indicates the company is on track to build on its strong recent performance during the holiday season and beyond.

"We believe that Inditex has the best business model in apparel and expect Inditex to deliver double-digit earnings growth per year over the next five years," analysts at Bernstein said in a note to investors. The brokerage rates Inditex at market perform.

Inditex didn't provide an estimate for like-for-like sales, a closely-watched metric that doesn't include new stores. However Anne Critchlow, an analyst with Société Générale, said she estimates that LFL sales accelerated in the third quarter and grew at a rate of 11% on the year compared with 7.5% growth in the second quarter, which also exceeded expectations.

Ms. Critchlow said this growth is underpinned by Inditex's focus on value-for-money products and customer choice, notably at Zara, which accounts for two-thirds of company sales. SocGen rates Inditex at hold.

She added that Inditex's plan to expand its online retail operation, which already spans 22 European markets, to encompass every single state across the continent will resonate with younger shoppers, who are increasingly turning to the Internet for their purchases.

Write to David Román at david.roman@wsj.com

(END) Dow Jones Newswires

December 10, 2015 05:56 ET (10:56 GMT)

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