MADRID: Zara-owner Inditex said on Wednesday its sales jumped 11% in constant currency for the first-half of the spring season between Feb. 1 and March 11, after the Spanish fashion giant surpassed main rival H&M’s annual sales growth.

Inditex widened its lead over Swedish retailer H&M, thanks to its ability to deliver fashion trends faster from nearby suppliers and sell more clothes at higher prices to upmarket shoppers. That has helped insulate it from the rapid growth of Chinese rival Shein.

In January, H&M reported a 4% drop in December and January sales, a bad sign for the key Christmas shopping period.

Inditex sales rose 10% to a record 36 billion euros ($39.33 billion) in the year to January 2024, from 32.6 billion euros a year earlier.

The company’s results were in line with analyst expectations but its sales are growing at a slower pace, as the pace of price increases has moderated on a year-on-year basis.

During the spring first-half in 2023, its sales grew 13.5%.

Inditex said it plans to invest 900 million euros per year through 2025 on logistics.

Zara, its core brand, began to raise prices earlier than H&M in response to surging inflation and as part of a shift to offer special pieces to a more high-fashion market consumers, while growing other brands in its budget range.

But over the two years, Zara has increased average prices of its assortment season-over-season at a slower pace than H&M and others, according to retail intelligence company EDITED.

The average price of apparel in stock at Zara for the 2024 Spring is 11% higher than two years ago, while stocks at H&M and Mango are both above 20% versus 2022, EDITED retail analyst Krista Corrigan said.

Investors expect H&M to continue to outperform its arch rival H&M. Its share price trades at 21.8 times expected earnings for the next 12 months, while H&M’s price-to-earnings ratio is 16.1.

“Inditex achieved the most difficult thing, which was being able to grow while passing on inflation in 2023. It did it because it has a better value proposition than competitors like H&M,” said José Ramon Iturriaga, fund manager at Abante Advisors, which holds Inditex shares.

“I don’t think this year will be more any more difficult for Inditex.” Inditex posted an annual net profit of 5.4 billion euros, an increase of 30% compared to last year and in line with analyst expectations in an LSEG poll, as the fast-fashion giant maintained a gross margin of 57.8%.