Cash and cachet

16 September 2015 By Fiona Maharg-Bravo

The 89 bln euro Zara clothes retailer can sustain double-digit growth. Having invested heavily in logistics, IT and stores, profit rose 26 pct in the first half. Inditex is hardly stingy but it has 4.4 bln euros net cash and enough financial strength to jack up the dividend.

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Inditex said sales in local currency terms increased 16 percent from Aug. 1 to Sept. 10 this year, shrugging off mild weather that has hurt some other European retailers like H&M.

The Zara owner reported 17 percent growth in sales to 9.42 billion euros in the six months to July 31, 2015. Like-for-like sales increased 7 percent.

Net income grew 26 percent to 1.17 billion euros in the same period. The gross margin was 58.1 percent, above the 57.6 percent recorded a year ago. Inditex reiterated that it expected margins to stay broadly stable for the full year. Inditex had net cash of 4.4 billion euros, up from 3.4 billion euros a year ago.

In the first half of 2015, the company opened stores in 35 markets.

At 0808 GMT, Inditex shares were up 3.1 percent to 29.4 euros a share.

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