Spain beats Sweden in the low-cost clothing war. The holding Inditex, owner of the clothing brand Zara, closed the first half with numbers much higher than analysts' expectations, putting the Scandinavian competitors of Hennes & Mauritz, for friends H&M, against the wall.
Net income from the Spaniards showed a surprising +32% year-on-year, up to 944 million euros, mainly thanks to strong performances in emerging markets. Sales increased by 17% to 7,24 billion euros, on the back of the opening of 166 new stores which brought the company's geographical coverage to 85 countries. The stock has gained 47% year-to-date on the Madrid Stock Exchange.
A few days ago instead it had been H&M to publish the accounts for last month and for the June-August quarter (therefore not immediately comparable with those of Inditex): numbers that disappointed the market's expectations. The Swedes ended the third quarter with sales of 33,57 billion kroner ($5,12 billion), up slightly from the 31,51 billion recorded in the same period a year earlier. Net of VAT, sales amounted to 28,81 billion, still up from 26,91 billion in the third quarter of last year, but below the 29,29 billion estimated by analysts.
Over the same period, H&M's total sales grew 10% year-on-year, while looking at August alone they increased 6%, well below the 10,7% forecast.
