In The First Quarter, The Net Profit Of ZARA Parent Company Dropped By 5 Years.

According to the data disclosed by < p > Inditex, the net profit of the company in the first quarter of April ended at $410 million, down 7.3% compared to the same period last year, and its operating income increased 4.3% to 3 billion 750 million euros over the same period.

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The decline in earnings of < p > Inditex can not be simply attributed to poor management, and more related to the appreciation of the "a href=" http://www.91se91.com/news/index_c.asp "euro" /a.

According to Bloomberg compiled data, in February ~4, the world's ten major currencies depreciated to more than 1.7% against the euro.

Europe is the main market for Inditex. Bloomberg shows that in the 2013 fiscal year ended January, Inditex's income in the EU was close to 5 billion 500 million euros, accounting for 34% of total revenue, and 22% from Spain and 18% from the OECD. Its members include Australia, Belgium, Canada, Japan and so on.

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P, however, Inditex's performance in the first quarter is still better than analysts' expectations. This can explain why Inditex's share price has not risen against a href= "http://www.91se91.com/news/index_c.asp" > Spain's "/a". The stock has risen 1.7% to 112 euros, and this year it has fallen 6.5%.

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< p > it is worth mentioning that with the recent decline of the euro, it may help improve the profitability of Inditex. According to statistics, since May, 18 of the 20 major currencies in the world have appreciated the euro, among which the top three are Russia rouble (6.4%), Columbia pesos (5.4%) and Chile pesos (4.4%).

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< p > at present, agencies generally predict that net profit in the second quarter will decrease by 0.2% compared with the same period last year. The decline will be narrowed compared with the previous quarter. Inditex indicated that the income from February 1st to June 8th increased by 11% over the previous year.

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< p > it is interesting to note that the gross profit margin of the first quarter of the a href= "http://www.91se91.com/news/index_c.asp" > Inditex < /a > 58.9% is 0.9 percentage points higher than that of the previous quarter, which is largely attributable to the online sales of the company.

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JamieMerriman, analyst at P SanfordC.Bernstein, said that e-commerce is helping Inditex increase gross margins because of the lower cost of raising revenue through online expansion, and that electricity providers may boost short-term revenues.

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< p > Inditex has been wired for sale in 25 markets worldwide. The aim is to hedge the slowdown in local sales growth. In September of this year, ZARA will open online sales channels in Mexico and Korea. In addition, Inditex will expand its e-commerce business through the Tmall platform in autumn and winter.

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Besides, P, CEO PabloIsla said in the recent investor conference call that the gross profit margin will remain stable for the rest of the year, e-commerce will expand well and it will be easy to set up shop on the Internet.

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