Zara owner Inditex on Wednesday reported sales for its fourth quarter ending January 31 in line with analysts’ expectations, sealing another year of strong growth for the world’s biggest listed fast-fashion retailer.
Inditex’s first quarter started more slowly, though, with sales up just 4 per cent in currency-neutral terms over the February 1 to March 10 period, compared to 11 per cent growth a year ago.
Sales grew 10.5 per cent in currency-neutral terms, to 38.6 billion euros (USD 42.07 billion) for the year, Inditex said, as fourth-quarter sales came in at 11.2 billion euros.
“The main concern will be a softer exit rate of 4 per cent ” compared to analysts’ forecast of 8.8 per cent growth for the first quarter, Bernstein analyst William Woods said. “This requires a significant acceleration in the rest of the quarter,” Woods said, noting Inditex said sales in its most recent week were up 7 per cent .
Zara’s growth may have been boosted recently by consumers shifting from more high-end brands to Zara during the cost-of-living crisis, and that trading down might not happen to the same extent in the coming years, said Morningstar analyst Jelena Sokolova.
In comments on its 2025 outlook, Inditex said it had a “strong commitment to profitable growth” after net profit for 2024 grew 9 per cent to 5.9 billion euros.
“The excellent sales and profit figures show the solidity of the Inditex Group’s profitable growth,” Chief Executive Officer Oscar Garcia Maceiras said in a statement.
Inditex, which also owns Bershka, Pull&Bear, Massimo Dutti, Stradivarius, and Oysho brands, said it would hike its dividend by 9 per cent to 1.68 euros per share.
Inditex’s consistent growth, outpacing rivals, such as H&M, has driven a strong run in its share price, which is now more than double of where it was three years ago, but the stock has struggled to gain further ground since September last year.
Inditex plans capital spending of 1.8 billion euros this year, unchanged from 2024, as it invests in store refurbishments, technology and improving its online platforms.
After investments in logistics and expanding warehouses, Inditex said a second distribution centre in its logistics hub of Zaragoza will open this summer.
The retailer, which operates in 214 markets around the world, plans to open its first stores in Iraq this year. Its brand aimed at younger shoppers, Bershka, will launch in Sweden, and sportswear and loungewear brand Oysho is set to open for the first time in the Netherlands and Germany.
