Inditex, Zara’s parent company, announced a robust holiday season trade, with sales increasing by 14% in the six weeks leading up to December 11. Additionally, the company upped its margin estimate for the year, which contributed to the company’s shares reaching an all-time high on Wednesday.

For the nine months ending in October, the largest fashion retailer in the world declared a net profit of 4.1 billion euros, equivalent to $4.42 billion. This is a 32.5% increase over the same period a year ago. Both in-store and online sales increased by 11%, a slower growth rate than the 19% rise witnessed the previous year.

The firm that owns Zara and other brands is reducing the number of stores it operates and investing in more prominent and more appealing locations. Additionally, the company is improving its operations to fulfill online purchases more quickly than its competitors.

As a result of these modifications, Inditex anticipates that its profit margin for the year 2023 will increase by 75 basis points when it had previously expected to maintain a constant gross margin.

“They are in a very good place and they continue to gain strong market share,” said Alistair Wittet, portfolio manager at Comgest in Paris, which has Inditex shares. “They are in a very good place.”

According to Wittet, the increase in gross margin brings profitability back up to levels that have not been seen since 2015. He also mentioned that Inditex can offer more garments at a total price.

As of 9:00 GMT, shares of Inditex had increased by 1.6%. As the rapidly expanding budget fashion store Shein has taken a more significant proportion of the market at the lower end of the price spectrum, Zara has made an effort to attract more discriminating customers by offering more costly apparel. This is a strategy that Zara’s Swedish competitor, H&M (HMb.ST), is attempting to imitate.

However, the rise in sales for the third quarter from August to October slowed to 7%, a decrease from the previous quarter’s growth of 16%. Patricia Cifuentes, a senior analyst at the Spanish investment management firm Bestinver, stated that the weather may have impacted sales in several different areas due to how unseasonably warm it was.

In addition, Inditex stated that the dollar’s strength would negatively impact it, which is an increase from the 3.5% that was anticipated. In addition to reducing the total number of stores, Zara intends to expand its presence in the United States, its second-largest market. Additionally, the company is investing in innovative checkout and security technology to minimize the time it takes consumers to pay in-store by fifty percent.

“The company is enhancing its ability to deliver online orders very quickly and its capacity to put in stores what consumers want most,” said José Ramon Iturriaga, fund manager at Abante Advisors, which holds Inditex shares. “The company is also enhancing its capacity to put in stores what consumers find most appealing.”

Inditex continues to see “significant opportunities” for expansion in the United States market, according to CEO Oscar Garcia Maceiras, who provided analysts with information that the company was doing well in the market there.

The findings of Inditex were announced a day after the company was compelled to withdraw a campaign by Zara. The effort had sparked demands for a boycott because some people perceived the images of monuments shrouded in white as invoking the image of bodies in shrouds in Gaza.

Inditex has just announced that it has begun a weekly five-hour “livestream experience” on the Chinese social media platform Douyin. This “livestream experience” aims to provide customers with video of catwalks. Inditex has announced the livestream will soon be accessible in other markets.