LONDON (Reuters) – Zara owner Inditex reported weaker sales than expected in its second quarter on Wednesday, but said the pace of sales growth picked up in August as the fast-fashion retailer grapples with cautious consumers in key markets like the United States.
Net sales for its second quarter ending July 31 were 10.08 billion euros ($11.81 billion), lower than the 10.26 billion euros expected by analysts according to an LSEG estimate.
In a statement, Inditex CEO Oscar Garcia Maceiras called the first-half performance “solid”, saying the company had achieved “satisfactory sales in a complex market environment”.
Sales for the start of Inditex’s autumn quarter, from August 1 to September 8, were up 9% in currency-adjusted terms compared to a year ago, a pick-up in pace from the 5.1% growth over the first half but a slowdown from the month of August last year when sales grew 11% in constant currency.
Shares in the world’s biggest listed fast-fashion retailer are down 14% since the start of this year as investors adjust to a deceleration after four years of double-digit annual sales growth.
The slowdown has prompted questions about consumer demand for Zara clothes, and the extent to which it will be able to raise prices in the U.S. to mitigate the impact of higher tariffs on imports and a weaker dollar.
($1 = 0.8536 euros)
(Reporting by Helen Reid; Editing by Inti Landauro and Jamie Freed)
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