Inditex shares plummet after results presentation

Business

Zara's flagship store at The Grove shopping centre in Los Angeles, California (US). Credits: Zara.

Madrid – Inditex's financial results, released Wednesday, concerning its performance during the first quarter of its 2025 financial year, were poorly received by both markets and investors. The Spanish multinational, owner of Zara, saw its shares open trading with a drop of more than 6 percent.

As a clear sign of the complicated horizon ahead for the Spanish fashion multinational, Inditex shares opened trading on Wednesday, June 11, after the presentation of its quarterly results, falling to 46.08 euros per share. This value was 6.36 percent below the 49.21 euros at which Inditex shares closed the last trading session on Tuesday, during which they experienced a slight recovery compared to the value of previous days, despite reports from various analysts warning of the expected weakness in the group's accounts at the close of this first quarter.

After this initial fall at the start of the trading day, which, to a greater or lesser extent, is already a constant that accompanies each new presentation of Inditex's results, the value of the company's shares recovered slightly to 47.50 euros per share. This value remains 3.47 percent below the 49.21 euros at which the Spanish multinational's shares closed at the end of the last trading session on Tuesday.

Cooling sales, stagnating profits and more inventory

The main cause of this depreciation in the value of Inditex's shares is, as already mentioned, the accounts presented by the company this morning, concerning the first quarter of the 2025 financial year. This period, from February 1 to April 30, saw the Spanish fashion multinational experience clear signs of cooling, with stagnant growth in both sales, at 8,274 million euros (+1.52 percent), and profits, at 1,305 million euros (+0.46 percent).

Although the Spanish group once again highlighted the strong growth opportunities it continues to perceive for its business model, and anticipated a higher growth rate — at least initially — for the second quarter, with sales for the period from May 1 to June 9 experiencing year-on-year growth of +6 percent, these factors did not influence market sentiment as much as the sales, profit and inventory indicators.

As a figure accompanying this presentation of results, Inditex noted that, in response to the slowdown in sales growth experienced at the start of the financial year, inventory at the end of the first quarter was 6.3 percent higher than a year earlier. The first quarter of 2024 saw the company reduce its inventory by 3 percent, to 3,566 million euros, as a result of extraordinarily good performance, which has now been completely undone, with inventory at the close of this first quarter of 2025 totalling 3,791 million euros as of April 30.

This article was translated to English using an AI tool.

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