Zara owner Inditex profit in line on decelerating sales

Fashion retailer Inditex SA reported first-quarter earnings that met analysts’ expectations as sales growth decelerated in line with estimates.

The Arteixo, Spain-based company posted operating income of €1.6 billion ($1.74 billion) in the quarter to April 30, meeting the average estimate from analysts. Revenue rose 7.1% to €8.2 billion, marking the third consecutive quarter of single-digit growth.

Still, sales rose 12% at constant exchange rates in the first five weeks of the second quarter, in a sign that the second quarter is going better than analysts expected.

Inditex had stood out from its peers in the post-pandemic period, reporting double-digit sales increases while also improving profitability despite weak consumer sentiment and inflation. 

But its heady growth has been slowing down recently, dipping into single-digit territory in the third quarter of last year. The trading update for the first five weeks of the second quarter offered a surprise on the upside, with a stronger-than-expected result.