On the up: Zara owner defies retail gloom with sharp rise in sales and profits
Zara owner Inditex bounced back from a weak start to 2019, when unseasonably cold weather in southern Europe stifled sales for the Spanish fashion group, with a strong performance in the first weeks of the second quarter.
This contrasts with how others in the struggling apparel sector are faring, with mid-market clothing retailer Ted Baker posting a profit warning on Tuesday after Britain had its biggest fall in retail sales on record in May. "This is particularly impressive in our view, notably in context of industry data we have so far for May," JP Morgan said in a research note following Inditex's results.
Shares in the Spanish group rose 1.1pc to trade at €25.57, whereas Boohoo's fell, despite the online British fashion retailer reporting robust sales, as its lower margins disappointed.
Inditex, the world's biggest clothing retailer and owner of Massimo Dutti, Bershka and Oysho reported net profit of €734m for the three months from February 1 to April 30, on sales up 5pc at €5.93bn. The apparel sector has been hit by out-of-season sales as savvy shoppers expect discounts.
Sales at constant exchange rates for the first six weeks of the second quarter were up 9.5pc as shoppers snapped up items like jewel-toned blazers and long printed dresses. Inditex also gained from a currency boost as some profits converted to euros.