by Apparel Resources News-Desk
13-June-2019 | 2 mins read
Spanish fashion group Inditex reported record first quarter sales and 10 per cent rise in profit as foreign currency effects moved back into favour for the owner of Zara and Massimo Dutti after two years of being on the edge.
The profit is also credited to the firm’s decision to take Zara brand online to Brazil as a part of a worldwide expansion. Zara.com went live in Brazil during the three months to April 30 and pushed into eight other countries such as Morocco and Saudi Arabia. It is further planning on expanding into nine more markets in the autumn, which will include South Africa and Kuwait.
Inditex reported net profit of 734 million euros (£654 million) for the three months from February 1 to April 30, on sales up 5 per cent at 5.93 billion euros.
Sales at constant exchange rates for the first six weeks of the second quarter were stronger, up 9.5 per cent. Inditex maintained its full-year guidance of 4 to 6 per cent growth for like-for-like sales.
The Spanish company generated over half of its sales in other currencies that have to be converted into euros for the financial report.
With the adverse foreign exchange effects removed, Inditex is under pressure to show it can deliver strong like-for-like sales without the margin dilution that has affected others in the apparel sector.
Inditex opened stores in 23 different countries during the quarter.
“These figures demonstrate the solidity of the company’s model, whose profitability and cash flow generation continues to grow owing to the group’s commitment to customer-driven quality fashion,” said Pablo Isla, Chairman and Chief Executive.
He highlighted the “strong momentum in the digital transformation of the integrated store and online sales platform and in sustainability as a key pillar of the company’s strategy.”
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