Inditex, World’s Largest Fashion Retailer, Posts Weakest Profit Growth In Years As Cool Europe Spring Kept Summer Shopping At Bay

Inditex reported Wednesday its weakest profit growth in four years in its first quarter ended April 30 at €438 million ($583 million), up 1.4 percent from the same period last year, as unseasonably cool weather in Europe kept shoppers away from buying summer clothing.

FactSet analysts had expected profit to come in at €444 million on €3.64 billion in sales.

The Arteixo, Spain-based owner of Zara, Pull & Bear and Oysho said it generated €3.6 billion in global sales and opened 49 more stores worldwide between February and April -- mainly in Russia, Japan and China – bringing the total number of outlets to 6,058. It also launched its ecommerce platform in Canada and said a comparable one would be online in Russia by the fourth quarter.

Sales in local currencies increased 8 percent.

In March, Inditex reported a significant 22 percent rise in full year net profit, to €2.4 billion, largely thanks to its rapid expansion into other markets that helped it pull away from dependence on Europe amid its economic crisis.

Competitor H & M Hennes & Mauritz AB (STO:HM-B) also reported on Wednesday that sales in its second quarter ended May 31 increased 5 percent in local currencies, but that same-store sales – the benchmark measure of a retail chain’s performance that excludes recently opened outlets – decreased 4 percent in the same period. Currency headwinds – namely the strengthening of the Swedish krona – battered profit, the company said.