Inditex Faces Growth Challenges Amid Global Uncertainty

Zara owner Inditex reports slower sales growth, sparking concerns over its future trajectory amidst geopolitical uncertainties. CEO Oscar Garcia Maceiras highlights challenges from shifting trade policies. Despite recent dips, Inditex remains optimistic, focusing on logistics investment and market expansion, while planning a 9% dividend increase and new store openings.

On Wednesday, Zara's parent company, Inditex, reported a slower start to its first quarter, despite recording a 10.5% growth in full-year sales. The news has triggered an 8% drop in shares as market analysts express concerns over the company's capacity to sustain its rapid growth amid global uncertainties.

Inditex CEO Oscar Garcia Maceiras pointed to dynamic geopolitical and tariff issues as major hurdles in making long-term business forecasts. The company reported only a 4% increase in sales from February 1 to March 10, a sharp decline from last year's 11% growth during the same period.

Despite the slow performance, Maceiras remains optimistic about Inditex's ability to adapt due to its diversification strategy. Inditex plans significant investments in logistics and technology, alongside new market expansions, maintaining its strong commitment to profitable growth while preparing for potential consumption declines in the coming quarters.

(With inputs from agencies.)