Indetix, the world’s largest clothes retailer, said sales jumped 7% to 12.8 billion euros (£11.5 billion) in the six months to July as it shrugged off the tough retail market conditions.
The owner of Zara has said sales surged during the first half of the year as the high street fashion brand was bolstered by warm weather and the success of a highly popular polka-dot dress.
The Spanish group said like-for-like sales during the period increased by 5%, while earnings before interest and tax rose by 8% to 3.4 billion euros (£3.04 billion).
The company, which had 7,420 stores across the world at the end of July, said it benefited from the roll-out of Zara online to new locations such as Brazil and the UAE.
Inditex said the first-half gross margin was stable, in line with the company’s forecasts.
“The season has been positive in terms of the gross margin evolution with this 12-basis-point gross margin increase … in line with our guidance,” Pablo Isla told a conference call.
Pablo Isla, executive chairman of Inditex, underlined the “strong first-half performance reflected in these figures, with like-for-like growth across all brands and geographies”.
He added: “The investments we have made in the stores, as well as in logistics and technology, have been key elements in the development of our customer-focused integrated online and offline store platform.”
The dampened margin growth could be due to foreign currency effects and a “less strong trend in full price sales”, said RBC Capital Markets analyst Richard Chamberlain, who estimated a 22 basis point fall in gross margin in the second quarter.
A stronger euro can drag on profits as the group generates more than half of its sales in other currencies and then books those sales in euros when reporting results.
Inditex has been one of the few bright spots in a struggling clothing market, with sales growth outpacing those of rivals such as Sweden’s H&M (ST:HMb) as it adapts to consumers’ changing shopping habits by combining large stores with online sales.
The group, which includes other brands such as Pull & Bear, has shut smaller stores to focus on large spaces in prime shopping areas and rapidly growing online sales.
Analysts highlighted that the success of Zara’s polka-dot dress, which was so popular that it had its own Instagram account, reflected that the brand’s product ranges were continuing to be welcomed by UK customers.
The £39.99 dress gained cult status as a must-have item during the summer, selling out in numerous UK stores.
Inditex added that strong sales have continued into the second half of the year, with sales across both stores and online rising 8% in the past six weeks.
The group has continued to open, enlarge and refurbish its network of stores in all geographies and its online platform into new markets. All the group’s formats completed openings across a total of 31 different markets during the first half, complementing the refurbishment and expansion of over 100 existing stores.
During the first half of 2019, Zara.com introduced its online platform in Brazil, the United Arab Emirates, Lebanon, Egypt, Morocco, Indonesia, Serbia and Israel. After the close, in August, Zara inaugurated its online platform in Qatar, Kuwait, Jordan, Bahrain and Oman. It is also due to launch the platform in South Africa, the Ukraine, Colombia and the Philippines during the third quarter.