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Inditex Full-Year Profit Meets Estimates as Zara Expands

Inditex SA, the world’s largest clothing retailer, reported annual profit that met estimates as the Zara and Massimo Dutti chains added more stores.
Zara Spring 2015 | Source: Zara
By
  • Bloomberg

MADRID, Spain — Inditex SA, the world's largest clothing retailer, reported annual profit that met estimates as the Zara and Massimo Dutti chains added more stores.

Net income climbed to 2.5 billion euros ($2.7 billion) in the 12 months through January from 2.38 billion euros a year earlier, the Arteixo, Spain-based owner of the Zara and Massimo Dutti chains said Wednesday in a regulatory filing. Analysts surveyed by Bloomberg had estimated profit of 2.49 billion euros. Like-for-like sales rose 5 percent.

Inditex had 6,683 stores at the end of January, up 5 percent from the prior year. The company said sales have increased 13 percent in local currencies in the start of the first quarter.

“Some investors have looked at Inditex as a way to invest in Spanish improvement, and we believe that sales growth in Spain will be strong,” Jamie Merriman, a Sanford C. Bernstein analyst, wrote before the release.

A weaker euro also boosts Inditex’s profitability because the retailer sources 65 percent of its garments from Europe and surrounding areas, according to Bernstein.

The stock is a “way to play euro weakness,” the analyst said. “This is particularly attractive when most apparel retailers have net U.S. dollar cost exposure.”

By: Rodrigo Orihuela; editors: Matthew Boyle, Thomas Mulier and Charles Penty.

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