Inditex Misses 3Q24 Goals, Projects Strong Holiday Recovery

Inditex, the world’s largest publicly traded fast-fashion retailer and owner of Zara, reported a rare miss on quarterly sales and profits, citing currency fluctuations and severe flooding in Spain as key challenges. Despite these hurdles, the company noted a promising start to the holiday shopping season.

Third-quarter sales totaled €9.36 billion (US$9.8 billion), falling short of analysts’ expectations of €9.51 billion. Net profit for the first nine months of 2024 increased 8.5% to €4.44 billion, but this also missed the forecast of €4.52 billion. Analysts at XTB attributed the shortfall to a larger-than-expected slowdown, warning of further risks in 2025, including potential US trade tariffs that could exacerbate inflation.

Flooding in Spain, Inditex’s largest market, had a limited impact on overall performance, according to Marcos Lopez, Inditex’s Capital Markets Director. Three stores were temporarily closed due to flooding in late October.

Currency fluctuations also weighed on results, with a strong dollar and weak euro impacting the company’s predominantly euro-based sales. However, López noted that Inditex expects the impact of currency changes in the fourth quarter.

Revenues for the six weeks ending Dec. 9, which included Black Friday, rose 9% in currency-adjusted terms compared to the same period in 2023. This represents a slowdown from the 14% growth recorded during the same timeframe last year.

“We had a strong start to the last quarter against a demand comparable in 2023,” López told Reuters.

Inditex shares remain robust, trading at approximately 26 times expected earnings over the next 12 months—significantly higher than H&M’s price-to-earnings ratio of 19.3. The company’s shares have gained 32% since the beginning of the year.