Inditex shares fell over 8% on Wednesday as the Zara and Massimo Dutti owner reported slowing sales since the start of 2025.

The Spanish company reported strong results last year, with sales up 10.5% in constant currency terms to €39 billion and a dividend increase of 9%. Inditex opened 47 stores across its suite of brands, including Zara, Bershka, and Stradivarius.

"The excellent sales and profit figures show the solidity of the Inditex Group's profitable growth," CEO Oscar Garcia Maceiras said in a statement.

Despite the strong year-end results, shares slid as Inditex noted weaker growth of 4% between Feb. 1 and Mar. 10—down from 11% for the same period a year earlier. The company plans to expand its market share with more floor space and store openings for Pull&Bear, Bershka, and others in old and new markets.

“Expectations were lower than usual for Inditex given other market data points, but this is a miss on a well liked stock,” Deutsche Bank analysts led by Adam Cochrane wrote in a note.

Morningstar equity analyst Jelena Sokolova said it was “too early to extrapolate the slowdown into the future,” given Inditex’s 2024 performance and plans this year.

Retailers are still grappling with reluctant consumer spending—a trend Zara seemingly benefited from as some shoppers withdrew from big luxury purchases. Global uncertainty, including the threat of U.S. tariffs, has only added to their challenges.

Most Inditex garments are produced in Spain, Portugal, Turkey, and Morocco, but the U.S. is the company’s second-largest market. American consumers have been under pressure amid the ongoing trade war, and retailers, including Inditex’s Spanish competitor Mango, are trying to brace themselves .

H&M, the Swedish mass retailer, is in the process of nearshoring the production of its products. CFO Adam Karlsson told Reuters that it was doing so for various reasons, including geopolitics and to improve its responsiveness to customer demand. H&M’s sales during the final quarter of 2024 came in below expectations, while its full-year results were up by 1%.

"If tariffs increase for everyone, there will be a relative position to take (on pricing)," Karlsson said. "We should position our offering in the same way no matter whether there are tariffs or not."

Kering, the luxury company behind Gucci and Saint Laurent, was clear that it would maneuver impending tariffs without moving any production to the U.S., given that the French company is “selling a part of our culture,” according to CEO Francois-Henri Pinault.

When asked how tariffs might impact Inditex, Garcia Maceiras admitted it was “difficult to predict” but was confident the company was strongly positioned. Like its rivals, Inditex’s footprint spans various markets for producing its goods.

“We consider that we are in a very good positioning due to our levels of geographical diversification in terms of sourcing and sales,” he said. “As we operate in many markets, we have experience dealing with different tariff regimes.”

Representatives at Inditex declined to comment beyond the earnings call.