Spanish group Inditex, the world's biggest clothing retailer, beat forecasts with a 68 per cent rise in first-half net profit driven by positive currency effects and a pick-up in consumer demand.
Inditex, which launched online shopping for its flagship fashion brand Zara earlier this month, reported net profit of €628 million today, comfortably beating analysts' expectations of €573 million.
Net sales reached €5.525 billion in the first half, in line with a €5.538 billion forecast.
"The surprise is in the gross margin," said Anne Critchlow, retail analyst at Societe Generale. "It is partly currency ... but it also indicates a recovery in consumption."
Europe's retailers are seeing a tentative recovery in consumer demand, which is proving stronger in emerging markets. But many are also wary that steps to rein in government debt could crimp spending in the months ahead.
Gross margin was 59.4 per cent of sales, Inditex said, thanks to the proximity of the supply chain, strong comparatives and currency effects. Its fast-fashion business model, that speeds catwalk designs to its stores worldwide, allows it to respond quickly to recovering demand.
Inditex said it was satisfied with the response to its initial six-country launch of Zara online sales, adding it would extend the offer to Austria, Belgium, Ireland, Luxembourg, and the Netherlands during the second half.
The number of searches for Zara.com has more than doubled since online shopping at the site was launched at the start of September, according to Google Trends.
Reuters