Inditex SA, the world’s largest clothing retailer, reported sales growth at the fastest pace in three years. Revenue rose 15 percent excluding currency shifts in the nine months through October and continued at that rate in the start of the final quarter, the Arteixo, Spain-based owner of the Zara, said Thursday in a statement. Net income gained 20 percent to 2.02 billion euros ($2.2 billion) in the nine months, matching the average of estimates compiled by Bloomberg. And while nearly all luxury brands are struggling for growth in China, thanks to a downturned economy and an ongoing anti-corruption campaign, the fast fashion giant is coming out on top. “We have no doubt that the fashion appetite in China is large, our brands are better and better known. We are still feeling very optimistic,” said Pablo Isla, the company’ chief executive.
Inditex is also benefiting from growing demand in Spain, where it gets about a fifth of its revenue. The country’s October clothing retail sales were the strongest in at least six years, according to Barclays Plc. The rebound contrasts with the rest of Europe, as Fitch Ratings lowered its outlook for the region’s retail sector to negative on Wednesday, citing rising competition and “fragile” consumer spending.
“The reason Inditex is trading strongly is that the company has focused hard on value and range," Anne Critchlow, an analyst at Societe Generale SA, said by phone from London. “Value for money is very strong, particularly at Zara, while the choice of products has become wider. It’s an extremely good proposition."
Inditex shares rose 1 percent to 32.86 euros as of 9:05 a.m. in Madrid. They have gained 37 percent this year, boosting the company’s market value to more than 100 billion euros. Founder Amancio Ortega is the world’s second-richest person, with a net worth of about $75 billion.
The retailer has opened about 400 stores annually on average over the past 5 years spread out among eight brands, reaching more than 6,900 total. This year’s introductions include its first shop in Hawaii and the first Bershka womenswear store in Taiwan. It has also added online sales in 28 of its 88 markets, having added Zara.com in Taiwan, Hong Kong and Macau.