Spanish clothing firm Inditex – the owner of Zara – has posted its weakest quarterly growth in net profit in four years,
It blames cold weather in recession-weary Europe which meant fewer buyers for its spring collection.
The group, whose brands include Bershka for teems and upmarket label Massimo Dutti, said its net profit was up two percent at 438 million euros and sales rose 5.2 percent, which means they were flat on a like-for-like basis.
Rival H & M, which gets 80 percent of sales from Europe, suffered similarly according to its May figures with sales unchanged.
The Swedish firm – which is due to publish full quarterly results on June 19 – has also seen margins fall due to currency swings and long-term investments.
Global leader Inditex has outpaced rivals in recent years with aggressive expansion into markets like China and Russia to sharply reduce exposure to its struggling home market Spain.
But investors are poised for signs that sales growth is slowing. “The question for the incremental buyer is whether Inditex can enjoy another year of good execution on top of the exceptional 2012, and we don’t see current trading as much comfort,” said Christodoulos Chaviaras at Barclays Capital.