Zara owner Inditex posts strong holiday sales

Fashion giant Inditex reported a solid start to festive trading on Wednesday, boosted by strong demand for its autumn/winter collections.

The Spanish retailer said store and online sales in constant currency rose 14% year-on-year between 1 November and 11 December, which includes the Black Friday promotional period.

Inditex, which owns Zara, Bershka and Massimo Dutti, among others, said autumn/winter collections had been "very well received".

It continued: "Inditex operates in 213 markets with low share in a highly fragmented sector, and we see strong growth opportunities.

"We expect increased sales productivity in our stores going forward."

It also forecast a full-year gross margin up 75 basis points. Previously it had expected the gross margin to be unchanged year-on-year.

In the nine months to October end, sales grew 11.1% to €25.6bn, while earnings before interest, tax, depreciation and amortisation improved 13.9% to €7.4bn.

Earnings were largely line with expectations, however, sales growth was notably lower than the 16% seen in the same period a year earlier.

Third-quarter sales rose by 6.6% to €8.8bn, slightly below analyst expectations, and down on the 16% growth seen in the previous quarter.

Fashion retailers have been hit by both weaker consumer sentiment and unseasonably warm weather in Europe during much of autumn, which dented traditional demand for warmer winter clothes.

As at 0930 GMT, shares in Inditex were up 1%.

Victoria Scholar, head of investment at Interactive Investor, said: "This is a mixed set of results from Inditex.

"Inditex has been successfully navigating the pressures from a weak consumer and sluggish backdrop, outperforming rival H&M.

"But despite its intelligent pricing and inventory strategy, it is not immune to these headwinds, which are starting to show up in terms of weaker revenues."