MADRID, June 8 Reuters Fashion giant Zara39;s owner Inditex reported an 80 jump in quarterly profit on the back of soaring sales as consumers revamped their wardrobes after months spent stuck at home during the pandemic lockdowns.

The company said on Wednesday it made a net profit of 760 million euros 812 million for the quarter to end April, in line with analysts39; expectations. Sales rose 36 to 6.7 billion euros, surpassing prepandemic levels, while its gross margin hit a 10year high. Inditex shares rose as much as 5 in morning trade.

Zara has benefited from successfully passing on higher prices to shoppers despite a cost of living crisis squeezing margins at other retailers. 

The company will continue to increase prices in markets affected by inflation during the second quarter while keeping its clothes affordable, CEO Garcia Maceiras told analysts.

We continue to expect pricing to contribute to 2022 Spring Summer sales in a mid single digit with no impact on volume, he said.

INVENTORY GAMBLE

The company is building up its inventory to ensure supply chain strains do not result in a shortage of stock, Inditex said.

This inventorystocking has the potential to backfire if economic conditions continue to worsen and customers eventually close their wallets, said Hargreaves Lansdown Equity Analyst Laura Hoy. For now that doesn39;t appear to be an issue for Inditex, whose trendy clothes continue to earn it a spot on dwindling budgets.

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