Zara owner Inditex flags slowing summer sales as quarterly revenues miss expectations
Zara owner Inditex on Wednesday posted weaker-than-expected quarterly sales while flagging a slower start to the summer season than last year amid broader economic uncertainty.
The Spanish retailer reported revenues of 8.27 billion euros ($9.44 billion) in the fiscal first quarter covering Feb. 1 to April 30, slightly shy of the 8.39 billion euros forecast by LSEG analysts.
Net income came in at 1.3 billion euros for the quarter, compared to the 1.32 billion euros analysts estimated.
The company also reported a slower start to summer sales, which increased 6% at constant currencies from May 1 to June 9 versus 12% growth in the same period last year on a constant currency basis.
Back in March, Inditex flagged a slowdown in demand at the start of the year, which CEO Óscar García Maceiras at the time attributed to uncertainty around U.S. tariffs.
Shares plunged on the comments and the stock currently remains down around 12% from its Dec. 4 peak, as of Monday.
The comments came as Inditex sales rose annually in the fourth quarter to 11.21 billion, meeting expectations. It followed a rare miss on sales and profit in the third quarter as flooding in Spain impacted consumer spending.
The company, which also owns a series of high street brands including Pull & Bear, Bershka and Massimo Dutti, is often seen as a barometer for broader consumer sentiment.
It has also been etching out a clear lead on high street rival H&M, which posted weaker-than-expected fiscal first quarter revenues in March, as sales continue to soften at the Swedish fashion giant.
The two retail giants have nevertheless struggled with increased competition from lower-cost fast fashion brands such as Chinese-founded Shein and Temu.
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