Inditex rolls out new high-tech amid positive Q1 results

Spanish fashion retailer Inditex is reaping the benefits of its recent investments in technologies to boost the efficiency of its online and physical stores.

In its Q1 financial results published on Tuesday, the company’s earnings of €851m beat analysts' estimates alongside record sales of €5.6bn.

However, top-line growth of 1.5% - the slowest pace in 20 years - fell short of analysts' expectations.

Gross profits meanwhile printed at €3.3bn, up 3% on the comparable year ago period, for a sales margin of 58.9%.

Inditex credited operating expenses that it said remained "under strict control" for its performance, even if they did rise by 3%, on the back of higher sales sales growth and increased floor space.

Analysts at Spanish broker Sabadell told clients the results "reveal higher-than-expected margins but alongside lower sales. Inditex has posted results for the fiscal first quarter below analysts' estimates but improved gross margins and operating costs, so the post-tax profit figures are ahead of what we expected."

The president of the company, Pablo Isla, said: "The strength of our results stems from our integrated store model and digital platform which, thanks to constant investments, are the main drivers behind our solid growth."

Among the quarter's milestones, its digital platform was rolled out in Australia and New Zealand. By the end of March, Inditex was running 7,448 stores in 96 countries.

The company had also rolled out a wave of new technologies at select Zara stores around the world, including the use of augmented reality and holograms to display its clothes, thus blurring the lines between its online and in-store operations.

A new concept shop in the UK uses robot arms to deliver internet orders to walk-in customers.

Inditex shares had a rough start on the Ibex 35 on Wednesday morning, falling by 1.9%, but they had since turned higher and as of 1538 BST were changing hands at €29.96, for a gain of 3.60%.