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Zara owner Inditex's profits beat expectations

MADRID, Spain – Spanish clothes retailer Inditex, owner of the Zara store chain, posted Wednesday, June 15, a 6.0% rise in its first-quarter net profit due to higher sales around the globe.

The world's largest fashion retailer by sales said profit for the quarter ending April 30 rose to 554 million euros ($621 million) from 521 million euros a year earlier.

The company, which operates 8 store brands including upmarket label Massimo Dutti and teen chain Bershka, said sales reached 4.9 billion euros, a 12% increase on the same period in 2015.

Sales were up by 17% in constant currency terms which irons out currency fluctuations.

"Inditex achieved a strong operating performance, with like-for-like sales growth in all geographies," the company said in a statement.

The results exceeded market expectations. Shares rose 2.9% at midday to 28.78 euros.

Sales remained strong in the start of the second quarter, advancing 15% in constant currency terms between May 1 and June 13, the company said in a statement.

Inditex said it opened stores in Aruba, Nicaragua, and Paraguay in the first quarter, extending its reach to 91 markets and 7,085 shops.

It has also increased its online presence in the European Union to countries such as Bulgaria, Croatia, and Hungary.

Asked about the possibility of Britain opting to leave the European Union in a referendum next week, chief executive Pablo Isla said in a teleconference with analysts that "Europe without the United Kingdom would be weaker."

Overall, the group said it had created close to 12,000 new jobs over the last 12 months, including around 2,400 in Spain.

Inditex was founded in 1975 by Amancio Ortega, who has become the world's second richest man after Bill Gates.

Its main competitor, Sweden's H&M, regularly challenges its position as the world's number one retailer. – Rappler.com