Zara owner Inditex posts healthy full-year results

http://www.guardian.co.uk/business/2012/mar/21/zara-owner-inditex-full-year

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The Spanish group Inditex, the world's leading clothes retailer, posted perky February sales figures and announced a 12.5% rise in its dividend after outpacing rivals during the downturn in austerity-wracked Europe.

The owner of the fast fashion chain Zara also met expectations with a 12% rise in full-year net profit to €1.9bn ($2.5bn), with one analyst saying on Wednesday that results in the fourth quarter were better than forecast.

"Like-for-like sales and gross margin seem healthier than expected in the final quarter. On every level of the high-quality indicators, it is a beat," Société Générale analyst Anne Critchlow said.

Inditex, started by Spain's richest man, Amancio Ortega, runs eight brands ranging from Zara to the upmarket Massimo Dutti and the accessories label Uterque.

The retailer has fared better than rivals by aggressively expanding into faster-growing markets such as Asia, and now has more than 5,500 stores across about 80 countries.

Inditex reported store sales in local currencies up 11% from 1 February to 14 March. That implied same-store sales up 3%, said Critchlow – a good result for a period when there was snow through most of western Europe.

Shares in Inditex, which is to lift its dividend to a total of €1.80, reached a record high of €72.15 on Monday as investors speculated on the cash-rich Spanish group's dividend.

Inditex's production model is seen as having shielded it from some of the worst effects of the crisis by allowing it to adapt quickly to shifting consumer behaviour and changes in labour and material costs.

As well as making clothes in Asia, where labour costs are rising from previously low levels, Inditex retains manufacturing operations in Spain – in its home region Galicia – as well as in neighbouring Portugal and Morocco.