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Zara Owner Inditex Posts 22% Jump in Nine-month Net Profit

Spain's Inditex SA, owner of the Zara boutique chain, said Wednesday its fiscal nine-month net profit rose 22 percent, after it opened new stores.

Europe's largest fashion retailer by sales said net profit for the nine months to Oct. 31 jumped to euro634 million (US$839.67 million) from euro520 million a year earlier. Sales rose 22 percent to euro5.67 billion (US$7.51 billion).

Some of Inditex's competitors have posted lower sales in recent months due to unseasonably warm weather in Europe during September and October. Inditex's positive performance has been attributed by analysts to its fast and flexible delivery system, which allows it to adjust to fast-changing fashion trends.

The company, which runs more than 3,000 clothing stores in 64 countries, opened 326 stores worldwide during the nine-month period. Inditex planned to invest between euro850 million (US$1.12 billion) and euro950 million (US$1.25 billion) to open between 410 and 490 new stores during its fiscal year. Last year, it opened a total of 448 stores.

Gross margin, or revenue after sales costs, grew 20 percent to euro3.19 billion (US$4.22 billion). Inditex's gross margin, a key measure of its operating performance, represented 56.4 percent of total sales, narrower than the 57 percent reported a year earlier.

Inditex expects to end 2006 with a gross margin of 56.2 percent, the same level reported in 2005.

The company's shares rose 4.9 percent to euro41.51 (US$54.98).