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.