MADRID (Reuters) -Zara owner Inditex reported on Wednesday a jump of 40% in profit for the six months to July amid higher sales compared to a year ago, even as the world’s biggest fashion company slowed the pace of price increases to customers.
The company posted a net profit of 2.5 billion euros between February and July, beating investor expectations.
Inditex has widened its lead over Swedish rival H&M this year thanks to its ability to deliver fashion trends faster from nearby suppliers at prices that allow it to cope with inflationary pressures.
But analysts expect Inditex’s strong financial position will allow it to keep prices stable or even lower them in the face of weakening demand for clothing and lower inflation. Zara plans further store expansion in the U.S., a market that two years ago became Inditex’s biggest after Spain.
The company said its sales rose to 16.9 billion euros, up 13.5% from the 14.8 billion euros registered in the same period of 2022. Inditex reported a gross margin of over 58.2%.
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Inditex, which also owns Bershka, Pull & Bear and other brands, said sales in constant currency between Aug. 1 and Sept. 11 were 14% higher than the 2022 period, showing that the pace of summer sales continues as autumn collections start to arrive.
Inditex has kept prices relatively stable over the summer, RBC analyst Richard Chamberlain said in a recent note to clients.
(Reporting by Corina Pons; Writing by Charlie Devereux; Editing by Inti Landauro and Clarence Fernandez)
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