Zara owner Inditex reports strong first-half sales growth
Sales - in stores and online - increased 8% in the first five weeks of the new financial period
The world's biggest fashion retailer, Inditex (ITX.MC), reported strong first-half sales growth on Wednesday, buoyed by good summer weather in Europe, while confirming its sales targets for the full year.
The owner of Zara is one of the few bright spots in a struggling clothing market, with sales growth outpacing that of rivals such as Sweden's H&M (HMb.ST) as it adapts to consumers' changing shopping habits by combining large stores with online sales. Shares have risen 28% in so far this year.
Sales - in stores and online - increased 8% in the first five weeks of the new financial period. Inditex, which also owns brands Massimo Dutti and Bershka, reiterated its full-year sales growth forecast of 4% to 6%.
The Spanish retailer reported net profit of 1.55 billion euros (1.39 billion pounds) for the six months from Feb. 1 to July 31, on sales up 7% at 12.82 billion euros, in line with analysts' expectations.
The clothing retail sector is suffering globally in a crowded market where savvy shoppers searching for bargains online has made price cuts rife. E-commerce giant Amazon (AMZN.O) has become the most-shopped clothing retailer in the United States, measured by the number of customers, according to Coresight Research.
Inditex has shut smaller stores, focusing on large spaces in prime shopping areas, which it combines with online sales via its web page and mobile phone app while tight control of its inventory allows it to avoid drastic discounting.
Zara will launch online sales in South Africa, Colombia, the Philippines and Ukraine in September and October, the company said, while merging the online operations of Zara and Zara Home from Sept. 17 in Britain as part of a previously-announced plan to integrate the two.