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Inditex full-year sales, profit meet expectations

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Inditex to hike dividend by 9% to 1.68 euros per share

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Sales up 4% in Feb 1-March 10 period, slower than a year

ago

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Zara owner plans 1.8 bln eur capex in 2025

(Recasts headline, first paragraph, adds U.S. consumer context

in paragraph 5)

By Helen Reid

ARTEIXO, Spain, March 12 (Reuters) - Zara owner Inditex

on Wednesday reported a slower start to its first

quarter starting February 1 after full-year sales and profit met

analysts' expectations, raising questions around its ability to

keep building on rapid recent growth.

Inditex's strong sales as Zara took market share from

rivals such as H&M have driven a strong run in its share price,

now more than double where it was three years ago, but the stock

has struggled recently as concerns grow around weakening

consumer demand.

Sales were up just 4% in currency-neutral terms over the

February 1 to March 10 period, Inditex said, compared to 11%

growth a year ago.

"The main concern will be a softer exit rate of 4%" compared

to analysts' forecast of 8.8% growth for the first quarter,

Bernstein analyst William Woods said. "This requires a

significant acceleration in the rest of the quarter," Woods

said, noting Inditex said sales in its most recent week were up

7%.

Inditex gave no reason for the slower growth, but businesses

have been warning of weaker demand particularly in the United

States, where consumers are showing signs of strain amid a trade

war with China, Mexico, and Canada. The U.S. is Inditex's

second-biggest market by sales after Spain.

Full-year sales grew 10.5% in currency-neutral terms, to

38.6 billion euros ($42.07 billion) for the year, Inditex said,

as sales for the key holiday shopping quarter came in at 11.2

billion euros, in line with analysts' expectations.

Zara's growth may have been boosted recently by consumers

shifting from more high-end brands to Zara during the cost of

living crisis, and that trading down may not happen again to the

same extent in the coming years, said Morningstar analyst Jelena

Sokolova.

In comments on its 2025 outlook, Inditex said it had a

"strong commitment to profitable growth" after net profit for

2024 grew 9% to 5.9 billion euros.

"The excellent sales and profit figures show the solidity of

the Inditex Group's profitable growth," Chief Executive Officer

Oscar Garcia Maceiras said in a statement.

Inditex, which also owns the Bershka, Pull&Bear, Massimo

Dutti, Stradivarius and Oysho brands, said it would hike its

dividend by 9% to 1.68 euros per share.

Inditex plans capital spending of 1.8 billion euros this

year, unchanged from 2024, as it invests in store

refurbishments, technology and improving its online platforms.

After investments in logistics and expanding warehouses,

Inditex said a second distribution centre in its logistics hub

of Zaragoza will open this summer.

The retailer, which operates in 214 markets around the

world, plans to open its first stores in Iraq this year. Its

brand aimed at younger shoppers, Bershka, will launch in Sweden,

and sportswear and loungewear brand Oysho is set to open for the

first time in the Netherlands and Germany.

($1 = 0.9174 euros)