Clothing retailer Inditex has posted a 32 per cent jump in net profit, meeting expectations and driven by an aggressive expansion into developing markets including China and India.

Zara owner Inditex said store sales in local currencies climbed by 10 per cent from the start of its new financial year to March 14th.

"The results are reassuring on like-for-like sales, gross margin and current trading," said Anne Critchlow, analyst at SG.

The company does not break out same-store sales, but Critchlow said the figures suggest a rise of around 2 per cent. "That's good news. I thought that could be lower at this point."

A sluggish economy and unemployment of over 20 per cent in home country Spain remains a worry for investors, although Inditex has been increasing market share during a recession in Spain which accounts for around a quarter of sales.

Austerity measures in other European countries like Portugal and Greece have also squeezed consumer spending power.

Inditex reported net profit of €1.73 billion, in line with a Reuters polled forecast of €1.7 billion for the period stretching from February 2010 to February 2011.

"It's testimony to how well managed this business is and how it can continue to grow in a slower environment," said Rebecca McClellan, analyst at Santander.

The company has expanded from the first Zara shop opened in northern Spain in 1975 to more than 5,000 stores in 77 countries including brands like preppie label Massimo Dutti and youth fashion chain Bershka.

Asia saw one of the most rapid rates of expansion last year with the group's retail presence there now at 645 stores, accounting for 15 per cent of sales up from 12 per cent last year.

Cash-rich Inditex said it would propose a dividend increase of 33 per cent.

Reuters