Inditex sales in Spain pick up but earnings depressed by euro strength

Galician-based Inditex, the world’s largest fashion retailer, managed to book a slight increase in its net profit in the first nine months of its financial year due to a lower tax burden, but the pace of growth in sales continued to be affected by the impact of the strong euro.

Inditex said net income in the period February-October was up 1 percent at 1.67 billion euros as net sales rose 5 percent to 11.93 billion. However, in foreign currency terms sales were up 8 percent. In the period November 1-December 8, sales in constant currency terms were up 10 percent. The company’s sales growth target for the full year is between 8 and 10 percent.

Gross operating profit in the form of EBITDA was unchanged at 2.78 billion euros. Inditex’s tax bill for the nine months declined to 464 million euros from 544 million a year earlier.

Chairman Pablo Isla noted an improvement in the retailer’s domestic market, which pulled out of an extended recession in the third quarter of this year. “We’re seeing positive growth in sales in Spain,” he said.

Over the past 12 months, Inditex has created 8,000 jobs, including 800 in Spain, and now has a global workforce 124,880 as of the end of October. In the first nine months of its financial year, it opened a further 240 stores and now has a total network of 6,249 shops in 86 markets.