Zara owner's sales slow in early weeks of first quarter
Cafe customers have drinks at a terrace outside a Zara clothing store, operated by Inditex SA, in Hamburg, Germany, on Saturday.
After years of riding a post-pandemic boom, Zara owner Inditex SA is showing signs of coming back to Earth.
Sales of the world’s largest listed clothing retailer were off to a slower start in 2025, rising just 4% in the five weeks to March 10 on a constant-currency basis compared with 10.5% for all of 2024. The Arteixo, Spain-based company’s shares plunged as much as 8.9%, the biggest intraday drop in three months.
Although faring better than many of its rivals — with the last week of the five-week period seeing a 7% jump in sales — Inditex is showing that it’s beginning to feel the impact of cuts in consumer spending as large swathes of the global economy slow down. Competitors like Hennes & Mauritz AB and Uniqlo owner Fast Retailing Co have reported disappointing fourth-quarter sales.
“We now see potential for a more normalized rate of sales and EPS growth and as such in our view valuation looks full compared to some other retailers,” RBC analyst Richard Chamberlain said in a note to clients.
Inditex’s past ability to go against the trend of disappointing performances from other retailers had made it a sector darling for investors. Shares of the company, controlled by Spanish billionaire Amancio Ortega, gained 27% in 2024, reaching a record high of €55.98 in December.
The company has stayed ahead of its competitors with a tightly managed supply chain that has given it the agility to both get fresh fashion into stores quickly while also being able to respond to potential headwinds fast.
In an attempt to bolster the business, chief executive officer Oscar García Maceiras spent €2.7bn last year on improving operations through refurbishing stores, deploying new security technology and expanding logistics capabilities. In 2025, it’s set to invest an additional €900m as part of a plan to increase logistics capacity.
The retailer said it expected ordinary capital expenditures of €1.8bn in 2025, the same as last year.
Inditex has pledged to expand its presence in the US, where it relies on just 99 stores and e-commerce. The retailer completed 11 projects that involved opening, revamping or upsizing stores in the country in 2024, and sees eight others for 2025 and 13 for 2026. Inditex had previously forecast 30 store projects by 2025. At a press conference on Wednesday, Maceiras confirmed that some of the 2026 projects had been part of the initial plan for 2025. Inditex expects to open a store in a mall in North Carolina, bringing the Zara brand to 26 states.
