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Inditex shares rise as fashion retailer ups H2 sales growth forecast

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Inditex shares are higher Wednesday, as the European fashion retailer and owner of Zara, reported upbeat sales in the first half of 2018 and also increased its sales growth forecast for H2. That higher outlook comes despite the stronger euro, which tends to have a big impact on the retailer’s profits.

By 1045 BST, Inditex shares were 2.47% higher at €26.15. The stock has been moving mainly lower in recent weeks.

Inditex H1 performance

Spanish fashion retailer Inditex, which also owns Massimo Dutti, said net sales grew 3% in the first half of 2018, to €12.03 billion, the first time sales have surpassed the €12 billion level. It also said that like-for-like sales growth hit 4% and was positive in every region.

Its H1 net profit, meanwhile, rose 3% to €1.4 billion compared with the same period a year earlier.

“The strong first-half results are the result of a solid sales and operating performance, arising from the unique strength of the Group’s integrated and sustainable business model,” said Inditex Chairman and CEO, Pablo Isla.

Zara makes most of its clothes in the European Union in order to help speed up tis response to changing fashions. However, many of its markets are outside the bloc and the strength of the euro has previously hurt profits.

Inditex outlook

In addition to reporting a positive first half performance, Inditex said it now expects like-for-like sales growth of between 4-6% in the second half of 2018. That upbeat assessment follows an initial warm reception to its autumn/winter clothing collections.

Like other fashion retailers,Inditex is also in the process of upgrading its business which includes:

  • Rolling out an integrated stock management system, to speed up deliveries and support online sales.
  • Adding advanced technology to its store upgrade programme
  • Ongoing plans to ensure all of its stock is available for sale online by 2020.

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