Inditex Q1 Net Jumps as Zara Owner Adds More Stores

MADRID, Spain — Inditex SA, the world's largest clothing retailer, said first-quarter profit jumped 28 percent, the fastest growth pace in more than two years as the Zara owner opened more stores and benefited from the weak euro.

Net income rose to 521 million euros ($589 million) in the three months through April, Inditex said Wednesday in a regulatory filing. Analysts surveyed by Bloomberg had predicted earnings of 504.6 million euros.

Inditex has opened more than 400 stores annually on average over the past five years and operates in about 90 countries. The International Monetary Fund forecasts the Spanish economy will grow 3.1 percent this year, which would bolster sales in Inditex’s largest market, where Zara offers 15.95-euro Jacquard woven dresses and 17.99 high-heel sandals.

Revenue rose to 4.37 billion euros, compared with an average estimate of 4.33 billion euros. Sales advanced 14 percent excluding currency shifts in the Feb. 1 to June 7 period.

A 27 percent surge in Inditex’s stock price this year has inflated 79-year-old founder Amancio Ortega’s fortune to $71 billion, making him richer than Warren Buffett and second to Bill Gates, according to the Bloomberg Billionaires Index.

The dollar was 25 percent stronger against the euro on average during Inditex’s first quarter compared with the year- earlier period, while the Chinese yuan was up 24 percent and the Japanese yen 7.3 percent. That boosted the value of revenue from those markets when translated into euros.

That was offset by the ruble, which was 23 percent lower against the euro on average. Inditex has more than 500 stores in China and 450 in Russia.

By Rodrigo Orihuela; editors: Matthew Boyle, Thomas Mulier, Phil Serafino.