Inditex, the parent company of Zara, has announced robust holiday sales and raised its margin outlook.

Inditex, the company that owns Zara, reported a robust holiday season with a 14% increase in sales during the six weeks ending December 11. The announcement, made on Wednesday, included earnings that aligned with analyst predictions and an upward adjustment of its margin outlook for the year. The world's largest fashion retailer disclosed a net profit of 4.1 billion euros ($4.42 billion) for the nine months concluding in October, with sales, both in physical stores and online, growing by 11%, a pace slower than the 19% growth observed in the corresponding period the previous year.

To enhance profitability, Inditex is strategically reducing the number of stores while investing in larger, more appealing retail spaces and improving logistical capabilities for faster online order deliveries. This effort has led to a gross margin increase, reaching levels not witnessed since 2015, as the company successfully sells more products at full price.

Despite the overall positive performance, third-quarter sales growth from August to October decelerated to 7%, down from the 16% growth recorded in the second quarter. Unseasonably warm weather in various markets may have impacted sales, according to Patricia Cifuentes, a senior analyst at Spanish fund managers Bestinver.

Inditex acknowledged that the strengthening euro would result in a 4% decrease in sales this year, up from the previously anticipated 3.5%. Inditex's shares experienced minimal change in early trading, with analysts suggesting that the company's strong performance was already factored into the stock value.

As part of its strategic initiatives, Zara, while reducing overall store numbers, plans to open more stores in the United States, its second-largest market. The company is also investing in new technologies for faster in-store transactions and enhanced security. Inditex's recent campaign misstep with Zara, which led to calls for a boycott, was followed by the company's commitment to addressing concerns.

To boost sales in China, Inditex introduced a weekly five-hour "livestream experience" on the Chinese social media platform Douyin, featuring footage of catwalks. The company intends to expand this livestream initiative to other markets in the near future.