Inditex Faces Headwinds in Challenging Economic Climate
Inditex, owner of Zara, reported lower-than-expected first-quarter sales, raising concerns about its future growth amid an unpredictable economy. Revenues were cited at 8.27 billion euros, falling short of expectations due to subdued consumer spending and unfavorable weather conditions impacting sales in key markets like Spain.
Inditex, the parent company of Zara, reported disappointing first-quarter sales on Wednesday, sparking concerns over its capability to sustain robust growth amidst an unpredictable economic climate.
The fast-fashion leader experienced a deceleration in revenue growth, recording only a 6% increase in sales from May 1 to June 9, down from 12% during the same timeframe last year. The company's first-quarter revenues reached 8.27 billion euros, notably missing analysts' projections of 8.36 billion euros, according to a survey conducted by LSEG.
Analysts attribute this underperformance to resurging inflation fears and economic slowdowns, exacerbated by tariffs, which have curbed consumer spending in markets such as the United States. Additionally, cooler weather in Spain, responsible for 15% of Inditex's global sales, likely contributed to the sluggish performance, noted Bernstein analysts.
(With inputs from agencies.)
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