Inditex, parent company of Zara, reported a 4% sales growth in Q1 2025, down from 11% last year, amid concerns about weakening consumer demand. Despite this, the company plans a 9% dividend increase and €1.8 billion investment in growth, with expansion into new markets.
Inditex, the parent company of Zara, reported a slower start to its first quarter for 2024, with sales up just 4% in currency-neutral terms from February 1 to March 10, compared to 11% growth during the same period last year. Despite strong overall sales and profit figures for 2024, meeting analysts’ expectations, concerns about weaker consumer demand are growing.
Inditex has seen rapid growth in recent years, driven by Zara's market share gains over rivals like H&M, and its share price has more than doubled in the last three years. However, analysts are concerned about the impact of weakening demand, especially in key markets like the United States. Bernstein analyst William Woods highlighted a “softer exit rate” for the quarter, noting the company would need a significant acceleration in the coming weeks to meet expectations.
Despite this, Inditex remains committed to profitable growth, with plans to increase its dividend by 9% and invest 1.8 billion euros in store refurbishments, technology, and online platforms. The company is also expanding its reach, with plans to open new stores in Iraq, Sweden, the Netherlands, and Germany.
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