Spanish retailer Inditex, owner of the Zara clothing chain, made a net profit of €393 million in its first half - up 33 per cent year-on-year and above forecasts.
Inditex said sales in the six months to July rose 19 percent to €4.124 billion, while earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 29 per cent to €782 million.
Inditex's gross profit rose 20 per cent to €2.3 billion or 55.7 per cent of sales, compared with 54.9 per cent a year earlier and 56.4 per cent in the first quarter.
Fortis Bank said the gross margin had been crimped by foreign exchange rates as the euro strengthened. Inditex has said it aims to keep its full-year gross margin at last year's level of 56.2 per cent.
"In the seven weeks since the start of the second half of 2007, like-for-like sales are going as the company expected," Inditex said in its statement.
Like-for-like sales - which measure growth excluding new shop openings and exchange-rate fluctuations - grew 7 per cent in the first half, up from 5 per cent a year-ago, the Galicia-based company said.
Some analysts had warned that as economic growth slows and interest rates rise in Spain, Inditex's biggest market, shoppers will be put off splashing out on non-essentials.
Sales at Inditex's biggest label, Zara, renowned for rushing the newest catwalk fashions to the high street, rose 15 per cent in the first half to €2.7 billion.
Among the other labels, sales at youth line Bershka rose 27 per cent and the more elegant Massimo Dutti rose 18 per cent, while sales at furnishing arm Zara Home jumped 50 per cent.