Zara owner Inditex's early summer sales disappoint as tariffs fuel uncertainty
Zara
owner Inditex missed expectations for first-quarter sales and early summer trading on Wednesday, as tariff fallout complicated the fast-fashion retailer's efforts to maintain strong growth.
Concerns about resurgent inflation and an economic slowdown triggered by US President Donald Trump's erratic tariff rollout have already dampened shopping enthusiasm in the United States and other major consumer markets.
Inditex's competitors have also experienced a sluggish spring. The gorup has 23 outlets in Ireland, including Zara and Pull & Bear, and employs over 700 people.
The company reported a slower start to its summer sales, with currency-adjusted revenue growth of 6 per cent from May 1st to June 9th, compared to analysts' expectations of 7.3 per cent, and down from 12 per cent growth in the same period a year ago.
READ MORE
Revenues for its first quarter ending April 30th were €8.27 billion, missing analysts' average estimate of €8.36 billion, according to an LSEG poll.
Net income increased 0.8 per cent in the quarter, to €1.3 billion.
Inditex shares were down 4 per cent in early trading, making it the second-worst performer on the Stoxx 600 index.
Inditex did not provide a reason for the weaker sales growth. In a statement, it called its performance 'solid', having labelled it 'very robust' at its previous results announcement in March, when annual sales were up 10.5 per cent.
'Overall weaker sales growth is a combination of demand volatility in Q1, but we need to take a step back and look at mid single-digit growth as actually being quite good in this environment,' said Bernstein analyst William Woods.
Inditex rival H & M's sales have also struggled, growing by just 1 per cent in March compared to 4 per cent in the same period a year earlier. Its December-February revenue grew by 2 per cent, below analyst forecasts.
Rainy weather in Spain, which accounts for 15 per cent of Inditex's global sales, has also likely hurt the company's performance, according to Bernstein analysts.
Spain experienced one of its wettest ever springs, with Madrid recording three times its usual levels of rainfall for the season.
With volatility in foreign exchange markets driven by trade risks, Inditex said currency fluctuations will have a bigger impact than previously expected, predicting a 3 per cent negative effect on its 2025 sales, compared with the 1 per cent it flagged in March. – Reuters
(c) Copyright Thomson Reuters 2025
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Times
29 minutes ago
- Irish Times
Upgrade of power system could spark €83 yearly increase in household electricity bills
Household electricity bills could increase by €83 per year to pay for an 'essential' upgrade of the country's power system, the chief executive of the Electricity Association of Ireland (EAI) has said. Dara Lynott said ESB Networks estimates it will need between €10 billion and €13.4 billion to upgrade the system over the next five years. ESB Networks has asked the Commission for Regulation of Utilities (CRU) to approve a price increase in order to facilitate this. It is estimated that such a price increase would result in household electricity bills increasing by at least €1.60 per week or about €83 per year. Mr Lynott said the investment is 'absolutely needed' and should be treated the same way as investing in any other 'essential' service, such as roads or water. READ MORE Mr Lynott said renewables such as wind, solar and hydropower currently provide about 40 per cent of electricity in Ireland. He said this figure needs to increase to 'reduce emissions' and improve the efficiency of the grid. He said a price increase of around €1.60 per week for electricity should be viewed 'in context', noting that people in Dublin regularly pay €3.75 for a cup of coffee 'if they're lucky'. 'That's not to say that the price increase won't be difficult for some people but there are measures that can be done by the Government to negate this, such as energy credits.' Mr Lynott said people over the age of 65 and single mothers with children under 18 are two cohorts most likely to feel the impact of a bill increase. He said the Government should consider giving these groups a free allotment of electricity units. He said universal credits are 'regressive' and the only way to tackle 'energy poverty' is with targeted measures such as electricity credits. [ Irish electricity prices, already Europe's highest, may rise further due to 'required investment' Opens in new window ] The Department of Social Protection provides a €35 monthly electricity allowance through the Household Benefits Package to help individuals with their energy bills. This allowance is paid directly into a person's bank account, so is not necessarily spent on energy bills, My Lynott noted. It was announced in Budget 2025 that all domestic electricity customers would get €250 off their electricity bills via two instalments of €125, as part of the Government's cost-of-living package. Similar measures had been announced in previous budgets. However, the Government has indicated that universal credits may not feature in the upcoming budget, potentially being replaced with more targeted measures. 'We're not going to have a cost-of-living package this year,' Taoiseach Micheál Martin said in February. The Irish Times has contacted ESB Networks, the Department of Social Protection and the Department of Climate, Energy and the Environment for comment.
Irish Examiner
34 minutes ago
- Irish Examiner
Tickets for Steelers v Vikings will range from €85 to €295 when they on sale Tuesday
Tickets for September's NFL game in Croke Park will go on general sale on Tuesday with prices ranging from €85 to €295. Hill 16 and the Nally Stand will be seated for the meeting of the Pittsburgh Steelers and Minnesota Vikings on September 28 with admission set at €250 for a spot in those areas. A ticket at the lower part of the opposing Davin Stand will cost the same. At €295, the most expensive general sale ticket is in the middle part of the lower Cusack and Hogan Stand. For all other parts of the main lower stands except for the rows closest to the playing area, a seat is priced at €275. Those rows are restricted view tickets as teams and coaching staff will be congregated in front of them. The Upper Cusack and Hogan Stand tickets will be available at €150, €225 or €250. Upper Lower Davin Stand tickets can be purchased at €85 or €100. The tiering of the tickets as well as that for Saturday's URC Grand Final between Leinster and the Bulls in Croke Park is sure to give hosts GAA food for thought when the only general ticket differentiation they make for All-Ireland senior finals is between stand and terrace admission. The URC were charging between €22.60 for a standing Hill 16 ticket to €55.35 for the corners of the lower Cusack and Hogan Stands to €147.35 for a seat in the Ard Chomhairle area of the Hogan Stand. Speaking on Tuesday, GAA president Jarlath Burns referenced their ticketing system: 'We do have a ticketing workgroup set up under (Ulster vice-chairman) Declan Woods from Cavan. They are coming up with all sorts of ideas around dynamic structures, dynamic pricing. "Even Leinster, if you look at the URC final on Saturday, they have a dynamic structure. Even the corners of the stands, it's cheaper to get into them than the main part of the stand. It's interesting what they're charging to get into Ard Chomhairle as well, if any of you have seen that.'
Irish Times
44 minutes ago
- Irish Times
US multinationals will be slow to return operations to US, Ibec leader says
Big US multinationals will be slow to heed President Donald Trump's demands to bring operations back to the country because of 'the chaos' currently existing in Washington, the head of Ireland's biggest business group has said. Businesses can learn to live with even penal tariffs , but they will struggle to cope with a business environment that can change day by day, Danny McCoy , the director of the Irish Business and Employers' Confederation, Ibec . 'It's hard to see how the US can actually credibly invoke the return of investment back into United States. Corporates will say the right things, but it's a big call to go back into something that's so random and so uncertain,' he said. Mr McCoy was speaking at a conference jointly organised by Ibec and the Confederation of British Industry at the Ballymascanlon House Hotel near Dundalk. READ MORE However unpleasant, tariffs are 'slightly a distraction', but even US-based multinationals will think carefully before they would 'wilfully' bring investments 'back into a regime that's so chaotic at the moment', Mr McCoy said. Equally, it must be remembered that 'a lot of the money in United States stock markets and so on is not US money, it's international money attracted to the safe haven that was the US'. Mr Trump has 'ripped up' the reserve currency status of the dollar: 'So, what we're likely to see that where the money goes for investment globally is not the United States,' he said. The question now for European Union states is whether they can get their 'act together to not only attract' their own money back, but equally to find ways to dramatically boost investment across the EU. On tariffs, research by the Economic and Social Research Institute has shown that Ireland could live with even a permanent tariff of 25 per cent on goods going to the US: 'You can adjust around tariffs,' he declared. Echoing some of the points made by Mr McCoy, Taoiseach Micheál Martin said the state of the world's geopolitics creates opportunities for Ireland and the United Kingdom, especially if they can work together on issues of mutual concern. 'With challenge and with turbulence comes opportunity as well,' he said, adding that major business leaders have told British Prime Minister, Sir Keir Starmer and himself that the two countries are now 'seen as a safe haven internationally for investment'. International investors have noticed the improving relations between the two countries in the wake of the Brexit disagreements, but 'also the common views, the common rules, basic sort of steadiness of how things are going'. Questioned about the tax and financial issues that are affecting people from the Republic and Northern Ireland who are working in the other jurisdiction, Mr Martin said those problems will have to be resolved. 'It is complex. It's not simple. My view is we do need to try and bring this to some conclusion because we do really have to reduce barriers and increase labour mobility,' he said. Currently, 18,000 people are known to cross the border daily for work, but, in reality, a far greater number do so but they use a relative's address as their residence for tax purposes – the so-called 'grannying' option. Though the workers do pay taxes to HM Revenue and Customs, or the Revenue Commissioners, they leave themselves open to tax audits, possible penalties and welfare complications by acting as they do. In addition, many workers who fully declare where they live are unable to get mortgages because financial institutions are unwilling to offer loans to people whose income could be affected by currency fluctuations. Extolling the value of all-island jobs mobility, Mr Martin earlier told the conference: 'One of the big things we say to US, or global multinationals is that we're part of the European labour market and there's free mobility of labour.' 'We want to develop the all-island skills agenda to meet our future skills needs – for instance in construction and infrastructure ‒ to better harness the potential of the island-wide labour market, for workers and employers,' he said.
