Margins at Zara fashion owner, Inditex, hit by euro
Inditex’s profits are sensitive to fluctuations in the currency, as it makes most of its clothes in the eurozone to respond quickly to fashion trends, but generates more than half of its sales in countries outside the currency bloc.
The decline in its gross margin meant Inditex missed forecasts for second-quarter earnings, before interest and tax (EBIT), analysts said, and the Spanish firm’s shares fell as much as 3% after the results, before recovering slightly. Inditex said its gross margin, as a percentage of sales, fell to 56.4%, from 56.8% in the first six months of its financial year, which runs to the end of July.
