Zara owner suffers second-quarter overseas margins fall

Inditex’s gross margin falls to 56.5 per cent from 58.9 per cent

Shares in Zara owner Inditex, the world’s largest clothing retailer by sales, fell 2.1 per cent today. Photograph: Brent Lewin/Bloomberg

Shares in Zara owner Inditex, the world’s largest clothing retailer by sales, fell 2.1 per cent today. Photograph: Brent Lewin/Bloomberg

 

Zara owner Inditex suffered a worse-than-expected fall in its second-quarter margins as trading in its lucrative overseas markets turned tougher. Its second-quarter gross margin fell to 56.5 per cent from 58.9 per cent a quarter earlier, further than analysts had expected.

Inditex, now the world’s largest clothing retailer by sales, has outperformed many rivals through its aggressive expansion to 88 markets, including fast-growing cities in China.

Other European retailers are following its international path and results were hit this year by the fall of currencies against the euro in markets like Russia, where it makes 6 per cent of its sales, and Japan, where it makes an estimated 4 per cent.

Shares fell 2.1 per cent while Swedish rival H&M gained 0.3 per cent after it posted a 19 per cent forecast-beating rise in August sales. – (Reuters)