Europe's two biggest clothing retailers saw sharply different reactions to recent sales updates, suggesting the two 'fast fashion' trend-setters are forging different paths in a difficult retail market.
Intidex SA (IDEXY) , the Spanish company which owns the Zara brand, said its profit margin narrowed 8 basis points to 57% last year on €23.3 billion in full-year revenues, but noted that full-year like-for-like sales rose 10% and prime location floorspace grew by 8%.
Inditex also said sales in the six weeks ending on March 12 -- the start of is 2017 fiscal year -- rose 13% from the same period in 2016 on a constant currency basis.
Inditex shares were quoted 0.38% lower on the session at €31.27 each by 14:30 CET, but are little-changed over the past three months as retailers around the region struggle to pass on costs in a low-inflation environment.
The Stoxx 600 Europe Retail Index has fallen around 0.9% in the time frame, compared to a 4.4% gain for the main Stoxx Europe 600 benchmark.
H&M (HNNMY) shares were also under pressure Wednesday, falling more than 4.75% in Stockholm to a three-month low of SEK234.8 each, extending its three month decline to 9.75%, after it reported its first sales drop in four years.
H&M said its February sales were 1% lower than the same period last year, owing to a negative calendar effect of leap year in 2016. H&M also said sales for its fiscal first quarter, which ended on Feb. 28, rose 7% to SEK54.4 billion ($6.05 billion) and that it had 4,393 stores in operation, compared to 3,970 in the previous period.
The group will published a detailed quarterly earnings report on March 30.