PARIS — Inditex, the Spanish fast-fashion group, on Wednesday reported better than expected third-quarter profits and said it would double the number of its stores in the U.S. over the next three years.
Net income rose 23.8 percent, to 339 million euros, or $431.3 million, in the three months through Oct. 31, the company said. Sales grew 19.5 percent, to 2.19 billion euros, or $2.79 billion, as Inditex continued to develop its main Zara chain. Currency conversions were made at average exchange rates for the period.
Chief executive officer Pablo Isla told a conference call that sales in the first six weeks of the fourth quarter had been “on line” with expectations.
Through the nine months, Isla said gross margin reached 3.19 billion euros, or $3.98 billion, or 56.4 percent on sales.
He confirmed the chain’s ambition to open as many as 490 stores over the full fiscal year at an investment of as much as 950 million euros, or $1.21 billion.
“[The third quarter] is a satisfactory start to the autumn-winter season,” said Isla, adding that 326 stores were opened in the first nine months, bringing the total number to 3,018.
Besides Zara, which accounts for about 65 percent of Inditex’s sales, the company owns the Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Kiddy’s Class brands.
Isla said most markets performed well, and there were strong results in the United Kingdom, Spain, Italy and the U.S. He said Russia was “improving a lot” and that sales in Asia were going “extremely well.”
The only disappointment Isla mentioned was Germany, where he said it was “too early” to indicate if market conditions were improving.
Though Europe and the Far East are to remain the chain’s focus for expansion in coming years, Isla said the U.S. business would grow, too.
Eight to 12 stores are planned in the next few years in the U.S., where Zara already has 24 stores. Isla said the units would be located in and around New York, Boston, New Jersey and Washington, and in Florida and on the West Coast between Los Angeles and San Francisco.
This story first appeared in the December 14, 2006 issue of WWD. Subscribe Today.
Isla said sales in China — where Zara opened its first stores earlier this year — were exceptional and that Zara would “increase significantly” the number of stores it operates in Japan. Earlier this week, Zara’s main European competitor, Sweden’s Hennes & Mauritz, said it had completed a deal to open its first stores in Japan.