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Dow Jones Newswires: Inditex reports forecast-beating sales despite store closures in Russia, lockdowns in China

Industria de Diseno Textil SA said Wednesday that sales and earnings grew strongly in the first quarter of its fiscal year despite store closures in China and the effects of the Russia-Ukraine crisis.

The Spanish fashion giant
ITX,
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booked quarterly sales of 6.74 billion euros ($7.22 billion) in the February-April period, beating the EUR6.29 billion expected by analysts, according to a poll of estimates taken from FactSet. Sales rose 36% from a year earlier.

Sales growth was strong across geographies, except those affected by restrictions, Inditex said. In China, 67 stores were subject to lockdowns in the quarter, but only four now remain closed, the company said.

Earnings before interest and taxes nearly doubled on year to EUR1.03 billion as the operating margin climbed several points to 15.3% on a gross margin that rose to 60.1%, the highest level in a decade, the owner of Zara and other fashion brands said.

Net profit increased to EUR760 million, despite the company booking a charge of EUR216 million relating to expected costs this year in Russia and Ukraine, Inditex said. The group earlier this year closed all stores and operations in Russia following the invasion of Ukraine.

The new quarter has begun strongly, the company said, with sales to June 5 rising 17% organically.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

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