* Inditex sees 32 percent jump in year profit
* Proposes 33 percent dividend increase
* Store sales up 10 percent in local currencies to March 14
MADRID, March 23 (Reuters) - Zara owner Inditex posted a 32 percent jump in annual net profit on Wednesday, driven higher by the aggressive opening of new stores in developing markets including China.
Inditex, which has overtaken Gap to become the world's largest clothing retailer, said store sales in local currencies climbed by 10 percent from the start of its new financial year to March 14.
"The results are reassuring on like-for-like sales, gross margin and current trading," said Anne Critchlow, analyst at SG. The company does not break out same-store sales.
Inditex reported net profit of 1.73 billion euros ($2.5 billion), in line with a Reuters polled forecast of 1.70 billion for the period stretching from February 2010 to February 2011.
Inditex shares trade at 17.9 percent times earnings forecasts for the year ending January 2012, below rival H&M on 19.2 times for the year ending November 2011, according to Reuters data.
A sluggish economy and unemployment of over 20 percent in home country Spain remains a worry for investors, although Inditex has been increasing market share during a recession in Spain which accounts for around a quarter of sales.
The first Zara shop opened in the northern Spanish city of La Coruna in 1975 and a forceful drive into developing markets in Latin America, Asia and Russia has resulted in Inditex overtaking Gap to become the world's largest clothing retailer.
Inditex has expanded its network of brands like preppie label Massimo Dutti and youth fashion chain Bershka to reach more than 5,000 stores in 77 countries. It also started selling Zara clothing online in 2010.
The cash-rich fashion retailer said it would propose a dividend increase of 33 percent, to a total of 1.6 euros per share.