Zara proprietor suffers slowdown from commerce battle and robust euro | USAEMALL.com

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Zara owner Inditex has failed to arrest a sales slowdown as it contends with Donald Trump’s trade war and a strong euro, sending shares in the world’s biggest fashion retailer lower on Wednesday.

The Spanish group reported a third straight quarter of slowing sales growth, with revenues increasing by just 1.5 per cent in the three months to April, underscoring a loss of momentum at a company that had consistently outperformed its rivals since the pandemic.

The figures fell short of market expectations, sending Inditex’s stock price down 4.9 per cent in early trading, giving it a market capitalisation of €146bn.

Retailers have been buffeted by economic uncertainty stemming from the trade war triggered by Trump’s barrage of tariffs, while Inditex has also suffered from the strength of the euro against the dollar in recent months.

Once adjusted for foreign exchange fluctuations, its sales were up 4.2 per cent to €8.3bn in the quarter to the end of April, compared with the same period a year ago. Analysts had expected growth of just over 5 per cent in constant currency terms.

The company, which also owns Massimo Dutti and Pull & Bear and is marking its 50th anniversary this year, said it had “maintained a solid operational performance”.

Its quarterly net income increased by 0.8 per cent to €1.3bn, marking another deceleration compared with profit growth of 10 per cent in the same quarter of 2024.

Inditex also disclosed sales for the six weeks to June 9, saying they were up 6 per cent from a year ago in constant currency terms. Analysts had predicted 7 per cent growth for the period.

“Spring and summer collections continue to be very well received by our customers,” said Óscar García Maceiras, chief executive.

Analysts at UBS said the shares had been hurt by a “soft” first quarter and “ongoing softness” in the current quarter, along with “negligible growth” in earnings before interest and tax.

Inditex shares fell 7 per cent in March on the day it released its previous results and dropped by as much as 6 per cent when it published earnings in December. Its stock price is now more than 10 per cent below where it stood six months ago.