Zara parent’s Q1: Slower sales growth, faster innovation

What happened Inditex, the parent company of Zara, released its first-quarter results for 2025 today, revealing a modest 1.5% YoY increase in sales to 8.3 billion euros ($9.5 billion). When adjusted for constant currency, sales grew 4.2%, or 5.3% excluding the leap-year calendar effect. Gross profit edged up 1.5% to 5 billion euros ($5.7 billion), while gross margin slipped slightly to 60.6%, down 4 basis points from the same period in 2024. Despite the company’s assertion of steady operations in the quarter, the growth rate falls well short of the double-digit pace the fast-fashion titan has long enjoyed. The Jing Take Consumer enthusiasm for “affordable luxury” has waned. Around 2017, a surge of similar fast-fashion competitors and the rise of e-commerce began to chip away at Inditex’s dominance, followed by the devastating impact of the pandemic on brick-and-mortar retail. These pressures led to a sharp revenue decline and losses in fiscal year 2020. Nevertheless, after weathering store closures and a challenging market, Inditex staged a remarkable recovery in fiscal 2022, with sales climbing 17.5% to 32.57 billion euros ($37.4 billion) — 15% above pre-pandemic 2019 levels. In fiscal 2024, the group pushed even higher, posting record revenues of 38.6 billion euros ($44.3 billion). Marta Ortega’s vision: Trading speed for sophistication These achievements owe much to Marta Ortega, the founder’s daughter, who took the helm of Inditex in April 2022. Since then, she has sharpened the group’s focus on affluent consumers, steering it toward a more upscale transformation. On the ground, Inditex has been investing heavily in brick-and-mortar concept stores that emphasize brand culture and immersive experiences. Recent openings include Zara locations in Athens’ Minion district and Boston’s CambridgeSide, alongside expansions and renovations at flagship stores like Noon Square in Seoul and Via Roma in Turin. Other brands within the group have also deepened their presence in key shopping districts, with Massimo Dutti and Pull&Bear on London’s Oxford Street, Oysho in Paris’s Madeleine neighborhood, and Zara Home in San Sebastian. Across 26 markets, Inditex opened new stores in the first quarter of 2025, bringing its global footprint to 5,562 locations by the quarter’s end. Flagship innovation: When stores become destinations Moreover, the group is innovating its flagship stores to elevate its brand presence. Take the Asian flagship in Nanjing opened this March, designed by AIM Architecture. The space blends immersive and dynamic elements, with a red brick sawtooth staircase thoughtfully referencing Nanjing’s rich cultural heritage. Inside, seating areas, product displays, and lounge spaces are artfully integrated to create a multifunctional environment. On opening day, the flagship welcomed over 100,000 visitors. The company is also rolling out new in-store security technologies designed to enhance customer interaction with products and streamline the shopping journey. This system lays the groundwork for further digital integration between physical stores and online platforms. It is already fully operational at Zara and is gradually being implemented across Bershka, Pull&Bear, and other labels. Meanwhile, Zara’s e-commerce platform has launched a “Travel Mode” service in the U.K., Italy, and Japan, with plans to expand to Spain, France, and Turkey. This feature enables travelers to have online orders delivered to their temporary accommodations and access city-specific travel tips for places like London, Rome, and Tokyo. Notably, the group’s spring-summer collections continue to resonate strongly with consumers. Between May 1 and June 9, 2025, combined in-store and online sales rose 6% YoY on a constant currency basis — a clear reason for confidence in the company’s future trajectory. While the latest earnings report signals a slowdown in growth, it also reveals Inditex’s strategic resilience and long-term vision amid challenging market conditions. Facing shifts in consumer behavior and global economic uncertainty, the group is doubling down on optimizing its store network and accelerating digital transformation to fortify its competitive moat in fast fashion. Though growth may be tempering in the short term, the company’s relentless focus on enhancing the customer experience positions it well for sustainable, long-term expansion. After all, Zara’s parent company, an established player with over half a century of history, is no longer relying solely on speed to win. Instead, Inditex is steadily evolving into a new phase that balances stability with refinement. \The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Zara parent’s Q1: Slower sales growth, faster innovation

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Published June 11, 2025

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Zara parent’s Q1: Slower sales growth, faster innovation