Inditex posts lowest first quarter profit growth in 4 years

MADRID, Spain - Zara owner Inditex, the world's largest clothes retailer, posted its weakest quarterly growth in net profit in four years on Wednesday, hit by cold weather in Europe and negative currency effects.

First-quarter net profit came in 1.2 percent higher at 438 million euros ($581.4 million) after a good 2012, while earnings before tax, interest, depreciation and amortisation (EBITDA) fell 2 percent. Sales rose 5.2 percent to 3.6 billion euros.

The Spanish retailer, which runs a stable of brands including teen label Bershka and upmarket player Massimo Dutti, said sales in local currencies for the first six weeks of its second quarter were up 8 percent.

Societe Generale analyst Anne Critchlow estimated that meant like-for-like sales, stripping out the boost from new store openings, were flat. "(That's) not the pick-up the market was looking for," she said.

Like all retailers, Inditex's sales are being reined in by an unusually cold spring and summer in Europe, discouraging shoppers from stocking up on beach clothes and summery outfits.

A Reuters poll of analysts had forecast net profit of 435 million euros, EBITDA of 757 million and sales of 3.6 billion euros.

Inditex's net profit shrank in the first quarter of 2009, dropping 16 percent in the depths of a crippling recession in its home market, but quarterly profit rates have increased year on year since then as the group tapped emerging markets.