Shares in Inditex slide after current trading disappoints
By Abigail Townsend
Date: Wednesday 12 Mar 2025
(Sharecast News) - Shares in Zara-owner Inditex fell sharply on Wednesday, after the Spanish giant saw sales growth slow.
Posting numbers for the year to 31 January, the world's biggest fashion retailer said total sales grew 7.5% to €38.6bn, or by 10.5% on a constant currency basis.
Net income jumped 9% to €5.9bn, while pre-tax profits were ahead 10.3% at €7.6bn.
In the fourth quarter, which included crucial festive trading, sales grew by 8.4% to €11.2bn and net profits by nearly 14%, to €1.4bn. Both sales and profits were in line with analyst expectations.
However, looking to the current year, the retailer said that store and online sales had strengthened 4% between 1 February and 10 March, down notably on the 11% growth seen in the same period a year previously.
As at 1015 GMT, the Madrid-listed stock was trading 8% lower.
Inditex did not comment on the slowdown in growth, other than to note that the spring/summer collections had been well received by customers.
Commenting on the full-year numbers, chief executive Oscar Garcia Maceiras, said: "The excellent sales and profit figures show the solidity of the group's profitable growth, based on the quality of the commercial offer of all our formats."
He also told analysts: "The current environment is difficult to predict in terms of tariffs, of course we are continuously monitoring the situation. However, we consider that we are in a very good position, due to our levels of geographical diversification in terms of coursing and sales."
Inditex, which also owns Pull&Bear, Bershka and Stradivarius, among others, has more than 5,500 stores in 214 markets.
Markets are becoming increasingly concerned that Donald Trump's imposition of trade tariffs on a host of countries and imports will undermine the global economy, as input costs and inflation rise and consumer confidence sinks.
Russ Mould, investment director at AJ Bell, said: "A slowdown in Inditex's sales growth is reason to worry, as it implies consumers aren't feeling as confident with opening their wallets.
"The uncertain backdrop is creating havoc for companies across multiple industries and retail is near the top of the list.
"Inditex is one of the few retailers that act as economic bellwethers. Offering a mix of smart and casual clothes makes it a retailer of choice for two customer streams.
"With so much negativity in the news, it's no wonder individuals are starting to wonder if they really need that new top or dress."
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