The numbers: Fast fashion pioneer and owner of Zara stores, Inditex, reported net profit growth of 1.6% compared to a year earlier, and profits reached €438.3 million ($583.5 million). Its share price was up 4.5% in midday trading.
The takeaway: The results are the worst in nearly four years for the world’s largest fashion retailer by stores. Retailers have blamed cold and rainy weather in Europe for a lack of interest in spring clothing. Inditex, who popularized the process of quickly churning out runway-inspired fashions at affordable prices, faces competition from other emerging players like the UK’s Primark. The strengthening of the euro against other currencies also hurt Inditex’s profits.
What’s interesting: Inditex is still betting that expansion in China will lessen its exposure in Europe. The company said it would open up to 100 stores (paywall) per year in the country, where it already has over 400, for the next several years.