Inditex shares fall despite profit and sales growth

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Zara click-and-collect

Zara’s parent company Inditex has reported rising sales and profits for the first nine months of 2018 thanks to a strong third quarter.

The world’s largest fashion retail group saw net sales rise three per cent to €18.4 billion (£16.7 billion) over the period, while like-for-likes grew five per cent across October and November.

Meanwhile, net profits jumped four per cent to €2.4 billion (£2.16 billion), and earnings before interest and tax (EBIT) came in at €1.29 billion (£1.16 billion), less than consensus estimates of €1.34 billion (£1.21 billion).

Shares dropped around six per cent in morning trading as the group, which also runs Pull & Bear, Bershka and Stradivarius, largely failed to meet expectations.

It attributed the increase in sales and profits its strategy of holding back on promotional activity, adding that this “high operational efficiency is reflected in the positive evolution of the gross margin”.

Inditex now trades from 7422 stores across 96 markets, having opened locations in 51 markets throughout the nine months.

It guidance for like-for-like sales and gross margins remains unchanged for the second half of the year.

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