UPDATE 3-Inditex 2007 profit up 25%, new year sales robust

(Adds share price, chief executive and analyst comments)

By Sarah Morris and Robert Hetz

MADRID, March 31 (Reuters) - Inditex (ITX.MC), Europe's biggest clothing retailer and owner of the Zara chain, said on Monday the year got off to a sparkling start and shrugged off fears of an expected slowdown in Spanish consumer spending.

The fast-growing retailer, whose stores range from trendy teen brand Bershka to upmarket Massimo Dutti, posted a 25 percent jump in 2007 net profit to 1.25 billion euros ($1.97 billion), helped by a weaker dollar and strict cost control.

It said its full-year sales to the end of January rose 15 percent to 9.44 billion euros.

Store sales in local currencies had increased by 17 percent from Feb. 1 to March 23.

"We have a positive like-for-like forecast for Spain," Chief Executive Pablo Isla said in a presentation to analysts. "Spain is a very healthy market."

At 1030 GMT, Inditex shares were down 0.6 percent at 34.94 euros, as the market weighed some of the poorer fourth-quarter data, such as a 20 basis point fall in gross margin, against the rise in sales since February.

Inditex shares have fallen over 15 percent since the beginning of the year, underperforming the DJ Stoxx index of European retail stocks for most of the year, as investors have worried about slowing economic growth in Spain, where Inditex makes nearly 40 percent of its sales.

"The results don't clear up the uncertainties which weigh on the company as the macro situation continues to worsen," said one Madrid-based analyst who asked not to be named.

He added that Inditex had implemented strict cost-cutting measures to compensate for a slowdown in sales, but costs could rise as it continues to expand internationally.

Other analysts were more reassured.

"Q4 was disappointing, but Inditex seems to have recovered a bit of its poise this year," said Richard Chamberlain, an analyst at JP Morgan. "The results and the forecasts were reassuring on Spain."

Inditex forecast a 4 percent rise for group sales by 2010.

The company also said it would open between 560 and 640 stores this year, with main growth markets being China, Japan and Korea, where it will open its first stores in April.

Inditex will also launch a new accessories concept called Uterque in the second half. (Reporting by Sonya Dowsett and Sarah Morris, editing by Will Waterman)