MW: Inditex profit climbs 17% as sales jump at start of fiscal year
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- Spanish retailing giant Inditex on Wednesday posted a 17% rise in fourth-quarter profit on a 13% rise in revenue as it saw strong growth in its international markets and opened its fiscal year with rapid sales growth.
The owner (ES:ITX 48.46, +1.55, +3.30%) of the Zara, Pull & Bear and Massimo Dutti chains posted a quarter to Jan. 31 profit of 483 million euros ($666 million), against 410 million euros in the fourth quarter of 2008.
For 2009 as a whole, the company's profit rose 5% to 1.31 billion euros, topping analyst estimates of 1.27 billion euros.
Sales rose to 1.9 billion euros from 1.68 billion euros during the quarter, and grew 7% for the year to 11.08 billion euros.
Sales outside of its home market of Spain, currently enmeshed in a deep economic recession, accounted for 68% of total sales in 2009, versus 66% in 2008.
Europe ex-Spain accounted for a 46% chunk of sales, against 45% in 2008, while Asian sales accounted for 12.2% of the total from 10.5%.
The company's same-store sales in local currencies rose 14% from February 1 to March 14. The spring and summer season will be influenced by the performance over the Easter period, owing to heavy sales volumes during the period.
The company opened 343 stores in 2009, with plans to open between 365 and 425 new stores in 2010, with 95% of this new retail space to be located in international markets.
Within these plans, 40% of the increase in stores will take place in Asia, with two stores to be opened in India starting in May.
"Our priority is to focus growth in Europe and Asia," said Pablo Isla, chief executive officer of Inditex in a conference call. "We see significant opportunities in Eastern Europe, the Russian Federation, and there is a great potential to expand profitably in Europe for many years, as our market share is below 1% in most countries.
He said the main areas of growth for Asia are China, Japan and South Korea. "We see huge long-term potential for Inditex in Asia markets," he said.
Inditex's board of directors will propose a dividend of 1.20 euros per share, an increase of 14% on the previous year.
Shares of Inditex rose nearly 3% to 48.30 euros in early Madrid action.
