The Zara lettering can be seen on the façade above the entrance to a branch of the fashion brand in the city center of Nuremberg (Bavaria) on March 6, 2025.
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Zara owner Inditex on Wednesday posted weaker-than-expected quarterly sales and flagged 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.
Share were down around 4.5% by midday London time.
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.
Inditex, 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 and a key gauge of spending patterns. The company, which counts the U.S. as its second-largest market after Spain, said the impact of tariffs on consumer spending was currently unclear.
“The current environment is difficult to predict and we’re continuing to monitor the situation,” Gorka García-Tapia Yturriaga, Inditex’s head of investor relations, said during an earnings call.
He nevertheless said the firm’s diversified and flexible supply chains would help minimize the worst impact. Inditex currently produces the majority of its products in various parts of Asia as well as Spain, Portugal, Morocco, Turkey, Brazil and Argentina.
“We see growth opportunities globally, not just in one market,” he added.
Mamta Valechha, consumer discretionary analyst at Quilter Cheviot, said the Wednesday results were likely to “fuel further debate” around the firm’s continued growth trajectory amid broader economic pressures.
“Bears [will be] pointing to a normalization in Inditex’s growth and questioning whether its valuation can be justified, while bulls will highlight its strong track record and resilience in a tough retail environment.”
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 tariffs.
Shares plunged on the comments and the stock currently remains down around 12% from its Dec. 4 peak, as of Monday.
Inditex.
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.
Inditex has 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. Still, higher U.S. tariffs on Chinese goods and the closure of the ‘de minimis’ trade loophole are seen creating notable headwinds for the disruptor companies.
