Zara owner Inditex's revenue, earnings surge

Spanish retailer Inditex, the holding company of fashion chains Zara and Bershka, reported a rise in sales for the year to date as it opened new stores.

The world's biggest clothing retailer by market value with over 7,000 shops globally, reported an 11% surge in sales to €16.4bn, for the year ended 31 October compared to last year, while earnings jumped 9% to €2.2bn, which was more or less in line with expectations.

On a constant currency basis sales gained 15%, while the gross margin slipped to 57.9% from 58.8% year-on-year.

For the third quarter, sales rose 11% to €5.93bn, compared with compared with expectations of €5.91bn.

The retailer had outperformed its peers such as H&M and Abercrombie & Fitch who reported disappointing fourth quarter results last month.

Analysts at Bryan, Garnier & Co said that this performance implied like-for-like growth of about 6% compared to the 11% in the first half the year.

The broker also said that the company was “best equipped to thrive” in the retail environment due to its strategy of collections based on customers’ purchases, and the ability to launch a new collection with two weeks, versus the six months for the industry.

About 60% of the fast-fashion retailer's clothes are made in Spain, Portugal and Morocco, making shipping quicker to its mainly European markets.

Chairman Pablo Isla said the company had opened 20 stores during the year and that retail space should grow between 6% and 8% over the next few years. In the third quarter the company entered new markets in New Zealand and Vietnam.

Shares in Inditex were down 3.06% to €31.99 at 1148 GMT.