Inditex disappoints with slowdown in profits
ZARA owner Inditex, the world's biggest clothing retailer, frightened investors as it said profits rose at the slowest pace in five quarters, missing analyst estimates.
The Spanish retailer, which has 6,000 outlets worldwide, said a depressed domestic market weighed on its figures.
Net income rose 12pc to €705m in the three months to the end of January, Inditex said. Analysts had expected a figure of €716m. It is the second consecutive time that Inditex failed to surpass analysts' expectations after three years of beating them. Shares fell as much as 4.8pc.
Fourth-quarter sales rose 12pc to €4.58bn. That matched the average analysts' estimate.
"Quarterly earnings were a little bit disappointing," said Anne Critchlow, a London-based analyst at Societe Generale. "The prior-year comparative had become tough for the first time, and a slowdown had to happen."
Inditex's sales in Spain, a market accounting for a fifth of the total, fell 5pc in the full year as the unemployment rate reached 26pc in December and the retailer absorbed a three percentage point VAT increase.
Inditex said its Spanish market share is about 12pc and it doesn't plan to increase its store total in that market this year.