Net profit at the world's largest clothing retailer Inditex dropped 7.3 percent in the first quarter, its sharpest drop in five years, after a strong euro hit the Zara owner in some of its most lucrative markets.
Net profit for the February-to-April period was 406 million euros ($552.77 million), beating expectations, and earnings before interest, tax and depreciation (EBITDA) slipped 2.3 percent. Sales rose 4.3 percent to 3.75 billion euros.
A Reuters poll had forecast net profit of 383 million euros, EBITDA of 721 million euros and sales of 3.79 billion euros.
Inditex, which owns brands like the upmarket Massimo Dutti and teen label Stradivarius, said sales for the period Feb. 1 until June 8 were up 11 percent.
Currencies like the Japanese yen, Turkish lira and Russian rouble have lost between 14 and 21 percent against the euro in the last year, sapping profit for the Spanish retailer in markets where it charges a premium.
The retailer said it would propose a 5-for-1 share split at its annual meeting, a move often taken by companies when their share price is very high. Shareholders will receive five shares for every share they own at the close of business on 25 July. The new shares will begin trading on 28 July.
Inditex shares first hit the 100 euro mark around 18 months ago and have been at or around this level since then, reaching a record high of 121.8 euros at end-October. The stock closed on Tuesday at 110.25 euros. ($1 = 0.7345 Euros).