Spanish retail empire Inditex reported a 6 percent rise in profits in the first quarter, bucking the trend as the rest of retail struggled to shift warm-weather product during the cold start to spring.
Zara’s parent company on Wednesday announced that sales rose 12 percent in the three months ended April 30 to reach 4.9 billion euros ($5.5 billion). Inditex said this growth was driven by “a solid business performance and shaped by like-for-like sales growth in all geographical markets.” In constant currency terms, revenue increased by 17 percent.
The group, which also operates the Pull&Bear, Massimo Dutti, Bershka, Stradivarius and Oysho chains, extended its reach to 91 markets during the quarter, opening 31 new stores, including its first-ever locations in Aruba, Nicaragua and Paraguay, to end April with 7,085 stores worldwide.
“Thanks to the group’s strong growth we are able to generate jobs in all our business markets, most notably, in Spain,” Pablo Isla, Inditex’s chairman, said in a press release.
Profits rose from 521 million euros ($588 million) to 554 million euros ($625 million), but gross margin as a percentage of sales decreased year-over-year from 59.4% to 58.1%.
On the e-commerce side, all of Inditex’s brands expanded their online platforms in the EU, with launches in Bulgaria, Croatia, Slovakia, Slovenia, Estonia, Hungary, Latvia, Malta and the Czech Republic. As a result, the company now has an e-commerce presence in a total of 39 markets worldwide.
Looking at the current quarter, Inditex said that excluding currency tailwinds sales rose 15 percent in the May 1-June 13 period. Swedish fast-fashion rival H&M also reported figures on Wednesday, announcing that in the quarter comprising Mar. 1-May 31, sales including VAT increased by 5 percent in local currencies compared to the year-ago period. Including VAT and converted into Swedish krona, sales increased by 2 percent to 54.3 billion kronor ($6.5 billion).