Zara owner Inditex misses Q1 sales estimates despite growth
Zara owner Inditex reported a 1.5% rise in first-quarter sales to €8.27bn (£7.3bn), falling short of analyst expectations of €8.36bn
Zara owner Inditex reported a 1.5% rise in first-quarter sales to €8.27bn (£7.3bn), falling short of analyst expectations of €8.36bn, as the fast-fashion giant faces a more cautious consumer environment.
The Spanish retailer’s revenue growth slowed compared with the same period last year, which saw sales increase by 7%.
Inditex attributed the softer start to the year partly to “cooler weather” in key markets such as Spain, which accounts for around 15% of its global sales, as well as ongoing economic uncertainties dampening consumer spending.
Despite the muted sales growth, the group, which owns Massimo Dutti, Stradivarius and Bershka maintained a steady gross margin of 60.6% and delivered a net profit of €1.31bn (£1.16bn), up marginally year-on-year.
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Inditex’s CEO Oscar García Maceiras highlighted resilience in the business, pointing to a 6% rise in revenue during the early weeks of the second quarter, compared to 12% growth in the same period last year.
This suggests a tentative recovery as summer collections gain traction.
The group’s focus on inventory control and store refurbishments has helped it navigate the challenging market landscape better than some competitors, with Inditex investing €1.8bn in store upgrades and technology this year.
“The first quarter’s results reflect a cautious consumer backdrop, but our ongoing investments and operational agility position us well for profitable growth,” García Maceiras said.
Inditex’s store portfolio continues to adjust, with a net reduction in the number of outlets to 5,562 as of April 30, down from 5,698 a year earlier, in line with its strategy to optimise retail space.
While sales growth is slower than in previous years, Inditex’s balance sheet remains strong, with cash and cash equivalents of nearly €6bn (£5.3bn) and no financial debt reported.
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