Spanish group Inditex, owner of fashion chain Zara, returned to double-digit growth in its first quarter, posting a 63 per cent rise in net profit thanks to strong sales and positive currency effects.
Europe's biggest clothing retailer benefited from a sales recovery after almost two years of recession and said sales worldwide at constant exchange rates had increased 13 percent from the start of its financial year in February to June 7th.
First-quarter sales rose 14 per cent to €2.7 billion the company reported today, against a forecast for €2.6 billion, giving net profit of €301 million, above the €259 million forecast in a poll.
"It looks to me as though like-for-like sales were up 5 percent in the first quarter but we don't know the currency impact for sure," said Anne Critchlow, analyst at Societe Generale. "I think the market will be pleased."
Inditex, whose other brands include youth label Bershka and upmarket brand Massimo Dutti, does not break out like-for-like sales.
Retailers worldwide are starting to see improved consumer demand after a punishing two-year economic downturn.
Swedish rival Hennes & Mauritz beat expectations for first-quarter profit in April, with strong March sales suggesting a return to higher spending in the second quarter.
Inditex shares trade at 18.4 times earnings forecasts for the year ending January 2011, compared with H&M's 19.2 times for its fiscal year ending November 2010.
Inditex said it would start long-awaited internet sales for its Zara chain on September 2nd in Germany, Spain, France, Italy, Portugal and Britain. H&M launched online shopping in 1998.
Reuters