Zara owner Inditex on Wednesday posted a 54% rise in first-quarter profit as sales kept pace after a strong 2022, when it outperformed other retailers during a cost of living crisis.

The world's biggest fast fashion company reported a net profit of 1.16 billion euros ($1.24 billion) for the quarter that ended in April, beating analysts' average expectations of 980 million euros in a Refinitiv poll.

Inditex, whose market capitalization exceeded 100 billion euros ($107 billion) for the first time last week, faces a challenge to keep prices competitive despite cost pressures including a 20% rise in average wages for shop workers in Spain.

In-store and online sales rose 13% to 7.6 billion euros in the first quarter, slower than in the first six weeks of the 2023 financial year. Rival H&M had struggled to compete for shoppers impacted by a cost of living crisis. H&M's sales had also been hit by bad weather in its home market.

Inditex, which also owns Pull&Bear and Massimo Dutti, had said its sales between Febuary 1 and March 13 were up 17.5% from the same period a year earlier, excluding its Russia operation.

Part of Inditex's strategy is to maintain higher prices outside the Eurozone. In countries such as the United States, Mexico or Saudi Arabia some clothes are up to 91% more expensive than in its home market.

Lower demand in the U.S. caused by a tougher macro environment has been offset by less weather-affected sales in southern Europe.