Inditex H1 profit dips on weak margin

Inditex reported a surprise dip in H1 profit Wednesday, hurt by margin pressure, although global revenue gains remained solid despite political and economic turmoil in some of its high-growth markets. The Spanish fashion giant noted that currency neutral sales in the most recent August 1-September 12 period jumped 10%. For H1, net income slipped 2.4% to €928m ($1.2bn) from €951m a year ago as ebitda declined 0.4% to €1.617bn from last year’s €1.624bn.

Net sales, meanwhile, rose 5.6% year-on-year to €8.09bn as same-store sales increased 4.5%. Store and online sales in local currencies grew 11%.

Analysts had forecast net profit of €908m, ebitda of €1.6bn, on sales of €8.1bn.

During the period, Europe generated 45.6% of total sales, up from 44.6% a year ago, while Spain was flat at 19.3%.

The Americas generated 13.4% of total sales, down from 14.4% a year ago. Asia remained flat at 21.7%.

Gross margin in H1 declined to 57.6% from 58.6% a year earlier.

Inditex shares opened up 1.2% Wednesday morning.

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