Wednesday, March 13 11:56:24
Zara owner Inditex, the world's largest clothing retailer, posted a sharp rise in full-year sales and profit as its drive to expand outside austerity-hit Europe continued to pay off.
Inditex, famed for the fast-fashion business model that lets it quickly respond to shifting customer demands with affordable versions of catwalk trends, said net profit rose 22 percent to 2.4 billion euros as, unlike many competitors, it offset woes in Europe through expansion abroad.
Profit was at the lower end of some analysts' expectations, however, due to a sharp fall in the gross margin, a ratio that compares top-line profit to revenue and shares fell 2.9 percent to 105.4 euros per share by 1025 GMT.
Analysts said negative currency effects and a higher proportion of discounted sales may have dragged down the gross margin in the fourth quarter, but the company, whose brands include fast-fashion stores Zara, teen label Bershka and higher-cost offering Massimo Dutti, did not give details.
"The drivers are still there, this model isn't broken, we're simply slowing down against tougher comparatives," said retail analyst Anne Critchlow, from Societe Generale in London.
Sales rose 16 percent to 15.9 billion euros, with Asia's share growing to 20 percent from 18 percent and the Americas expanding to 14 percent from 12 percent.
European sales outside Spain continued to account for 45 percent of Inditex revenue.
The retailer, founded by the world's third-wealthiest man Amancio Ortega, opened new stores in 64 markets, entering Georgia, Bosnia and Ecuador for the first time. Reuters