Inditex 2011 profit rises 12%

Inditex SA (ITX), the world’s largest clothing retailer, reported a 12 percent increase in full-year profit as sales were boosted by openings in Asia and unveiled plans to maintain store expansion over the next three years. Net income rose to 1.93 billion euros ($2.56 billion) in the 12 months ended Jan. 31, the Arteixo, Spain-based owner of the Zara chain said today in a statement. The average of 15 estimates compiled by Bloomberg was 1.92 billion euros. Inditex added 483 outlets in the year, boosting overall selling space by 9.7 percent and the number of outlets to 5,527 in 82 countries. The retailer will be able to keep up space growth of 8 percent to 10 percent in the next three years, Chief Executive Officer Pablo Isla said. Inditex also reported stronger sales for the first six weeks of the financial year. “Inditex 2011 earnings were really strong and sales performance at the beginning of this year is pretty good too,” said Jose Rito, an analyst at Banco BPI in Porto, Portugal. Inditex rose 0.3 percent to 71.94 euros as of 11:27 a.m. in Madrid trading, extending a seven-day winning streak. The retailer said it plans to open 480 to 520 stores in 2012, including its first Massimo Dutti stores in the U.S. The expansion will lead to an increase in capital spending to about 950 million euros from 864 million euros a year earlier. Online Stores Zara plans to start online sales in China in the fall, according to Inditex, which gets about two-thirds of revenue from Europe. As of September, all of the retailer’s brands had online stores, and it offered e-commerce in 18 European markets, as well as the U.S. and Japan. Net sales last year rose to 13.79 billion euros, representing growth of 10 percent, or 11 percent at local currency rates, Inditex said. Store revenue at constant exchange rates climbed 11 percent from Feb. 1 to March 14, it said. Earnings before interest, tax, depreciation and amortization climbed 9.8 percent to 3.26 billion euros as the company’s gross margin remained at 59.3 percent of sales. Some analysts were disappointed by a year-end net cash total of 3.47 billion euros, which Rito said was lower than he had expected. A dividend of 1.8 euros a share compared with the 1.81-euro average estimate of 25 analysts compiled by Bloomberg.