Inditex SA, the owner of Zara, reported slower sales growth at the outset of the crucial holiday shopping season, sending shares tumbling.
The Arteixo, Spain-based retailer said revenue, excluding currency swings, grew 9 percent in the five weeks to Dec. 9, compared with 14 percent a year earlier. It was also slower than the 10.5 percent sales growth achieved by the company in the nine months to October.
The shares, which hit a record high on Dec. 5, fell as much as 7.7 percent in early Madrid trading, the most since March 2022. Through Tuesday, the stock had climbed 40 percent since the year began, more than twice the increase in Bloombergâs index of European retailers.
âThe groupâs impressive growth credentials look confirmedâ by todayâs results, said Jefferies analysts led by James Grzinic in a note to clients. âBut the shares likely needed a better print to prevent some profit-taking today.â
Inditex has been a standout performer among Europeâs clothing retailers, as rivals struggled with unseasonably warm weather and weak demand in key markets. The companyâs tightly managed supply chain allows it to get the latest and most popular products in and out of stores quickly, making it more agile on both fashion trends and potential headwinds.
The retailer had a stellar post-pandemic run, but the pace has slowed slightly since then. Operating income rose 5 percent to â¬2.13 billion ($2.24 billion) in the third quarter, just shy of analystsâ estimates. Gross margin, a measure of profitability, also came in below expectations in a quarter typically marked by higher ticket items like coats and jackets and few markdowns.
By Clara Hernanz Lizarraga
Learn more:
Zara-Owner Inditex Extends Sales Gains, Bucking Retail Trend
Inditex SAâs sales surged 11 percent at the start of the third quarter, outpacing rivals and boosting shares, as the Zara ownerâs agile operations and popular fashion lines helped it navigate poor weather and volatile consumer demand.
