AGL 40.10 Increased By ▲ 0.10 (0.25%)
AIRLINK 130.50 Increased By ▲ 0.97 (0.75%)
BOP 6.80 Increased By ▲ 0.12 (1.8%)
CNERGY 4.65 Increased By ▲ 0.02 (0.43%)
DCL 9.02 Increased By ▲ 0.08 (0.89%)
DFML 43.40 Increased By ▲ 1.71 (4.1%)
DGKC 84.01 Increased By ▲ 0.24 (0.29%)
FCCL 33.03 Increased By ▲ 0.26 (0.79%)
FFBL 76.75 Increased By ▲ 1.28 (1.7%)
FFL 11.51 Increased By ▲ 0.04 (0.35%)
HUBC 110.55 No Change ▼ 0.00 (0%)
HUMNL 14.82 Increased By ▲ 0.26 (1.79%)
KEL 5.40 Increased By ▲ 0.01 (0.19%)
KOSM 8.22 Decreased By ▼ -0.18 (-2.14%)
MLCF 39.74 Decreased By ▼ -0.05 (-0.13%)
NBP 61.10 Increased By ▲ 0.81 (1.34%)
OGDC 198.40 Decreased By ▼ -1.26 (-0.63%)
PAEL 26.80 Increased By ▲ 0.15 (0.56%)
PIBTL 7.88 Increased By ▲ 0.22 (2.87%)
PPL 158.50 Increased By ▲ 0.58 (0.37%)
PRL 26.50 Decreased By ▼ -0.23 (-0.86%)
PTC 18.50 Increased By ▲ 0.04 (0.22%)
SEARL 82.40 Decreased By ▼ -0.04 (-0.05%)
TELE 8.32 Increased By ▲ 0.01 (0.12%)
TOMCL 34.65 Increased By ▲ 0.14 (0.41%)
TPLP 9.16 Increased By ▲ 0.10 (1.1%)
TREET 17.30 Decreased By ▼ -0.17 (-0.97%)
TRG 61.66 Increased By ▲ 0.34 (0.55%)
UNITY 27.55 Increased By ▲ 0.12 (0.44%)
WTL 1.41 Increased By ▲ 0.03 (2.17%)
BR100 10,478 Increased By 70.9 (0.68%)
BR30 31,811 Increased By 97.4 (0.31%)
KSE100 97,901 Increased By 572.6 (0.59%)
KSE30 30,377 Increased By 184.8 (0.61%)

The world's biggest fashion retailer, Inditex, on Wednesday reported weaker-than-expected growth in profit margins in the first half of the year, knocking its shares lower. The disappointing margin growth overshadowed strong growth in sales in the first half, buoyed by good summer weather in Europe. First-half gross margin, a measure of profitability, was up 12 basis points, prompting some analysts to estimate margins actually fell in the second quarter. Inditex, owner of Zara, does not break out second quarter profit margins. Inditex said the first-half gross margin was stable, in line with the company's forecasts.
"The season has been positive in terms of the gross margin evolution with this 12-basis-point gross margin increase in line with our guidance," Chairman Pablo Isla told a conference call. The dampened margin growth could be due to foreign currency effects and a "less strong trend in full price sales", said RBC Capital Markets analyst Richard Chamberlain, who estimated a 22 basis point fall in gross margin in the second quarter.
A stronger euro can drag on profits as the group generates more than half of its sales in other currencies and then books those sales in euros when reporting results. Sales - in stores and online - increased 8% in the first five weeks of the latest financial period. Inditex, which also owns brands Massimo Dutti and Bershka, reiterated its full-year sales growth forecast of 4% to 6%.
The Spanish retailer reported net profit of 1.55 billion euros ($1.66 billion) for the six months from Feb. 1 to July 31, on sales up 7% at 12.82 billion euros, broadly in line with analysts' expectations.

Copyright Reuters, 2019

Comments

Comments are closed.