Cash-rich Zara owner Inditex increased its dividend by 17% for the full year despite reporting annual earnings slightly below analyst expectations, dampened by the currency exchange effects of a strong euro.
The world’s biggest clothing retailer reported profits of €3.44 billion, up 2% on year, on sales of €26.15 billion.
That missed a consensus estimate for net profit of €3.49 billion and sales of €26.45 billion, Refinitiv I/B/E/S data shows.
A strong euro can drag on profits for Inditex, the owner of upmarket chain Massimo Dutti and underwear store Oysho, as the group generates more than half of its sales in other currencies and then books those sales in euros when reporting results.
The company has proposed a total dividend of 0.88 euros for the year that ended, up 17% from a year earlier.
Inditex said it had a net cash position of €6.7 billion euros as at January 19.
Inditex, controlled by founder Amancio Ortega, estimated its total like-for-like sales would grow by 4-6%in the current financial year.
Its sales in shops and online at constant exchange rates rose 7% in the first weeks of the new financial year, from February 1 to March 9, as shoppers bought items from the spring/summer collections like belted linen blazers and floral A-line dresses from Zara.
Inditex launched Zara online sales in 106 new markets in November.
Its overall online sales grew by more than a quarter to become 12% of total sales during the year.