Inditex, the parent company of Zara, has reported a fourth-quarter sales increase that met analysts’ expectations, despite indicating a slowdown in demand at the start of 2025. The company’s fourth-quarter sales reached €11.2 billion, aligning with forecasts, while full-year sales grew 10.5% in constant currency terms to €38 billion12. However, the beginning of the first quarter saw a slower pace, with sales rising by only 4% in currency-adjusted terms from February 1 to March 10, compared to an 11% growth in the same period last year23.
Inditex’s net profit for the fourth quarter was €1.42 billion, consistent with analyst predictions. For the entire fiscal year, net income rose by 9% to €5.88 billion, reflecting strong execution of the company’s business model13. Despite these positive financial results, Inditex’s shares fell by around 7% following the earnings announcement, reflecting investor concerns about the slowdown in sales growth17.
Key Financial Highlights
- Fourth-Quarter Sales: €11.2 billion, meeting analyst forecasts.
- Full-Year Sales: €38 billion, up 10.5% in constant currency terms.
- Net Profit: €5.88 billion for the year, a 9% increase from the previous year.
- Share Price Impact: Shares dropped by approximately 7% due to concerns over slowing growth.
The recent slowdown in sales growth poses a challenge for Inditex, as it must accelerate sales to meet analysts’ forecasts for the first quarter of 2025. Bernstein analyst William Woods noted that sales need to pick up significantly to achieve the projected 8.8% growth for the quarter8. Despite this, Inditex remains optimistic about 2025, citing a strong commitment to profitable growth and plans to increase its dividend by 9%3.
Inditex’s strategy for 2025 includes expanding its logistics capabilities with an estimated capital expenditure of €1.8 billion. The company aims to maintain a stable gross margin and continue its store optimization and digitalization program, which has contributed to its robust performance45. Inditex’s diversified brand portfolio, including Zara, Pull&Bear, Massimo Dutti, and others, will be crucial in navigating market uncertainties and driving future growth.
Inditex’s ability to meet quarterly sales forecasts despite a slowdown in early 2025 reflects its resilience in the fast-fashion market. However, the company faces challenges in accelerating sales growth to meet future projections. With its strong brand presence and strategic investments, Inditex is well-positioned to navigate these challenges and maintain its position as a global fashion leader.
Key Highlights:
- Inditex reported fourth-quarter sales of €11.2 billion, meeting analyst forecasts, but indicated a slowdown in demand at the start of 2025.
- Full-year sales grew 10.5% in constant currency terms to €38 billion, with a net income increase of 9% to €5.88 billion.
- The company’s shares fell by around 7% due to concerns over slowing sales growth.
- Inditex remains optimistic about 2025, planning to expand logistics and increase its dividend by 9%.