Inditex, Spain’s largest integrated clothes group, on Wednesday unveiled a 16 per cent year-on-year drop in first-quarter net profits, as the consumer downturn, negative currency factors and the costs of expansion and discounting squeezed margins.

The company, which created the popular Zara range, said net profits for the three months to the end of April were €184m ($260m), compared with €219m in the same period last year – at the low end of analysts’ forecasts. Sales climbed 5 per cent, to €2.34bn, in line with consensus forecasts.