Mubasher: Inditex, Zara’s parent company, on Wednesday posted a 2% year-on-year sales growth in the first quarter ended April 2018.

Net sales amounted to EUR 5.7 billion ($6.71 billion) in Q1-18, compared to EUR 5.65 billion ($6.65 billion) in the year-ago period, according to the company’s recent statement.

On the other hand, the company’s earnings before interest and tax (EBIT) rose 2% year-on-year to EUR 851 million in Q1-18, while net profits also increased 2% year-on-year to EUR 665 million.

During the quarter, the world's largest fashion retailer launched online sales for Zara in Australia and New Zealand.

“A slowing pace of store openings appeared to play a role in the weaker-than-expected sales momentum at the beginning of Inditex's fiscal second quarter”, according to Macquarie Group analyst Andreas Inderst. 

It is worth noting that Inditex closed around 27 of its stores during the quarter, bringing the number of its stores to 7,448 in 96 markets instead of 7,475 stores in the same period of the prior year.

"We expect the shares to continue to push on from here given that gross-margin pressure has been one of the biggest bear points on the stock recently," Richard Chamberlain, an RBC Capital Markets’ analyst, noted.