MADRID—Fashion giant Zara’s owner Inditex is expected to report bumper first-quarter earnings next week, benefiting from raising prices more than rivals without damaging its sales, analysts said.
As a cost of living crisis intensifies across the region, Europe’s retailers are facing a tricky balancing act between passing on rising supply chain costs to consumers and ensuring that their products stay affordable.
The Russia-Ukraine conflict and COVID-19 lockdowns in China have added to pressures. But Inditex, best-known for the fast-to-market Zara brand which provides 71 percent of its sales, has staged a faster recovery than most, analysts said.
The company was still well-placed to take market share because its prices remained competitive and consumers liked its rapid output of new fashion lines, RBC analyst Richard Chamberlain said in a research note….