Zara owner Inditex shares wobble as strong Euro weighs on margin

Zara augmented reality

It is the first time Inditex has broken out online sales.

Inditex, the world's biggest fashion retailer by market value, is more affected by the strengthening euro than many European rivals because it sources a higher proportion of garments closer to home - rather than from, for example, Asian markets - allowing it to respond quickly to new trends.

"The colder weather compared to the previous year across Europe had a negative impact, and Inditex will not be the only clothing retailer to have suffered", said Anne Critchlow, an analyst at Societe Generale.

Mr Isla went on to say that "the prescient investments made in technology and logistics in recent years, coupled with space optimisation, mean the company is well placed for continued growth across all its markets".

In addition, models can pop up on packages of online purchases delivered to customers, showing alternative outfits.

Online sales grew 41 percent to account for 10 percent of group net sales in the year.

The Zara app constantly refreshes its magazine-like appearance with new designs photographed on models at the company's Galicia headquarters at a rate of 120 campaigns per season.

Like-for-like sales growth rose 5 percent compared to 10 percent growth a year earlier, with strength across all geographic areas and in all concepts, Inditex said.

Meanwhile UBS analysts said that the bonus dividend was lower than expected.

Inditex reported net profit of €3.37 billion, in line with analyst expectations.

On the same basis, sales grew 9 percent in the first five weeks of the new financial year as new spring collections hit shop floors with items like printed maxi dresses, linen separates and pastel blazers at Zara.

Inditex is vulnerable to foreign exchange rates as it reports in euros yet makes around half its sales in other currencies.

Inditex's board of directors said it will submit a motion for the payment of a €0.75 per-share dividend, marking year-on-year growth of 10.3pc, at the Annual General Meeting scheduled for July.

Since the year-end, store sales in local currencies increased by 9pc between 1 February and 11 March 2018, the company said.



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