Consumer sales spike buoys retailers Inditex and H&M
The world's two top fashion retailers – Zara-owner Inditex and Hennes & Mauritz – reported strong sales growth yesterday, benefiting from a recovery in consumer spending in their core markets in Europe.
Inditex, whose brands also include upmarket Massimo Dutti and teen label Stradivarius, said sales rose 11pc in local currencies between February 1 and June 8, accelerating from the 8pc it recorded in the year to January 31.
First-quarter sales grew 4.3pc to €3.75bn. Net profit fell 7.3pc to €406m, the biggest decline in five years due to the strong euro, but beating the average forecast from analysts.
Inditex is benefiting from recovery in its home market Spain where it still makes about one fifth of sales. Spanish retail sales rose 0.7pc year-on-year in April, the first increase in three months.
Sweden's H&M said sales rose 19pc in May, its fastest growth in six months, easily beating analyst forecasts. However, H&M said the figures were helped by calendar effects of about 3-4pc, which would be reversed in June.
Inditex's gross margin slipped to 58.9pc in the first quarter from 59.6pc a year ago, but still beat forecasts due to cost control and stayed well ahead of the 54.9pc H&M reported for the three months ended February 28.