The World'S Largest Apparel Retailer Inditex Net Profit Increased By 64%

The biggest in the world

INDITEX group's ZARA Apparel Retailing

INDITEX group has exceeded its revenue from U.S. Gap Inc. (Gap).

The company said its net profit in the first three months ended April 30th increased from 184 million euros in the same period last year to 301 million euros.

Sales increased by 14%, from 2 billion 340 million euros to 2 billion 670 million euros, while operating costs increased by 11% to 1 billion 40 million euros.

Net profit figures are much higher than analysts' forecasts of 251 million 500 thousand euros, making Inditex's share price rise 4.2% to 45.74 euros per share.

Richard Chamberlain, a retail analyst at Bank of America Merrill Lynch, said: "the results show that despite the macroeconomic downturn, Inditex's revenue has continued to grow strongly because it has seized the share of the fragmented clothing market."

Analysts said that Inditex responded quickly to consumer demand in the early part of this year with a rapid response model.

More than half of its products are near Spanish headquarters, reducing production time and adapting quickly to changing fashion trends.

This flexibility allows for strict control of inventory, reducing product costs, thereby increasing profit margins.

Gross profit margin (closely related to profitability) rose to 60% in the first quarter compared with 57% in the same period last year.

Sales in the first quarter were 57% from the same period last year.

The company said the increase in profits was due to "inventory management, procurement and sales growth".

Spanish retailers also said sales had stabilized since the end of the first quarter, and sales in February 1st to June 7th increased by 13% in local currency terms.

For summer sales, Inditex group's flagship store ZARA shop will be based on the 1970s variant of the Bo ho style, mashup with psychedelic flowers and geometric patterns, as well as navy style jeans, denim, and daring soft colors and flesh colored suits and sweaters.

By the end of the quarter, Inditex has more than 4700 stores in 76 countries, including 98 new businesses.

A few weeks ago, it opened its first Zara store in India, bringing the total number of shops to 77.

Inditex plans to open stores in New Delhi and Mumbai before expanding to other big cities in India.