Inditex SA is increasing prices by more than surging inflation rates, making the owner of the Zara fashion chain a standout among retailers getting hit by higher costs and shaky consumer demand.
Higher prices helped earnings before interest and taxes rise to 2.43 billion euros in the six months through July, the Arteixo, Spain-based company said Wednesday. That compares with the 2.36 billion-euro average estimate of analysts surveyed by Bloomberg.By keeping customers shopping while countering higher costs through price increases, the world’s biggest clothing retailer is pulling further ahead of rivals.
“It is clear that Inditex is successfully feeding through input price inflation in a selective way and is not taking significant pain through the gross margin,” said Anne Critchlow, an analyst at Societe Generale. First-half sales reached 14.8 billion euros, up 25 per cent from a year before and ahead of analysts’ estimates. In the first six weeks of the third quarter, sales climbed 11 per cent relative to the same period a year earlier.
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