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Inditex Net Dips 3.1 Percent in Second Quarter

Fast-fashion giant cites tough business in Spain; rapid growth in Russia and China.

PARIS – Inditex, the Spanish retailer that runs the Zara chain, reported a 3.1 percent decline in second-quarter net profit as business in its key Spanish market toughened.

The fast-fashion giant, which also runs the Paul and Bear, Massimo Dutti and Bershka chains, said net income in the three months through July 31 reached 187 million euros, or $293.6 million, below most analysts’ estimates.

Sales in the quarter grew 12 percent to 2.34 billion euros, or $3.67 billion, boosted by strong business in emerging markets like Russia and China, where Inditex deputy chairman and chief executive officer Pablo Isla said business has been booming.

In the half, Inditex said net profit grew 3 percent to 406 million euros, or $637.4 million. Net profit would have grown 7 percent excluding a pre-tax gain in the same period last year related to a change in perimeter, Inditex said. Dollar figures are converted at average exchange rates for the period.

New stores lifted sales 13 percent in the half. On a like-for-like basis, sales grew 1 percent in what Isla called “difficult” environment. He said like-for-like sales in Spain, which accounts for as much as 40 percent of Zara sales, grew “slightly below average.”

For complete coverage, see Thursday’s WWD.