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Zara Owner Inditex Says Autumn Sales Stronger After First-Half Growth Slowdown 

A woman carries a bag from Spanish multinational retail clothing chain Zara, the flagship brand of the Inditex clothing company, in the Gran Via of Bilbao, Spain, March 12, 2024. (Reuters)
A woman carries a bag from Spanish multinational retail clothing chain Zara, the flagship brand of the Inditex clothing company, in the Gran Via of Bilbao, Spain, March 12, 2024. (Reuters)
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Zara Owner Inditex Says Autumn Sales Stronger After First-Half Growth Slowdown 

A woman carries a bag from Spanish multinational retail clothing chain Zara, the flagship brand of the Inditex clothing company, in the Gran Via of Bilbao, Spain, March 12, 2024. (Reuters)
A woman carries a bag from Spanish multinational retail clothing chain Zara, the flagship brand of the Inditex clothing company, in the Gran Via of Bilbao, Spain, March 12, 2024. (Reuters)

Zara owner Inditex reported on Wednesday stronger recent sales of its first autumn-winter collections after posting a slowdown in sales growth in the first half of the year that was in line with analysts' expectations.

The fashion giant said its sales between Aug. 1 and Sept. 8 saw an 11% boost in constant currency compared with a year ago. In the first half, sales growth had slowed to 7.2% from 13.5% in the same period the prior year.

The world's biggest listed fashion retailer reported a 10% rise in first-half profit amid tougher times for fashion retailers in Europe, partly due to a wet and cold June in its biggest market, Spain. Despite those headwinds, Inditex posted net income of 2.8 billion euros ($3.09 billion) and sales of 18.1 billion euros in its first half ending in July.

Analysts polled by LSEG had expected a profit of 2.77 billion euros based on 18 billion euros in sales.

The company reported a gross margin of 58.3% for the period. Analysts from HSBC, RBC, JPMorgan and Bestinver had forecast Zara's sales growth would rebound into the double digits in the first five weeks of its third quarter beginning in August after the poor weather in June dashed Zara's initial expectations of a bumper second quarter.

The fashion company has fought to stay ahead of competitors such as H&M and fast-growing Chinese rival Shein by investing in logistics and technology to deliver fashion trends faster and making an effort to minimize price increases on everyday items.

Zara hiked prices more slowly than in the past in the second quarter and less than H&M in the United States, its second-biggest market, according to retail analytics firm EDITED.

Prices for women's jeans at Zara were 2% higher than a year ago, while the average price of jeans at H&M increased by 8%, EDITED added.

H&M said June sales were likely to fall 6% in local currencies versus a year earlier, partly due to worse weather in many markets, while the wet weather in Britain also hit summer sales at Primark.

"I don't look at stocks with a short-term horizon. (On) a three-to-five year view, Inditex is the best fashion retailer in the whole brick-and-mortar space, as well as online," said fund manager Vera Diehl of Union Investment, who considers Inditex's gap with H&M and Shein has widened.

"The company takes long-term strategic decisions," Diehl added. Inditex said Zara will offer live shopping broadcasts in key markets such as Spain, the US, France, Italy, Germany, Britain, Ireland, the Netherlands and Canada in the coming weeks, following the format's launch in the Chinese market in November 2023.

Zara's parent company, which also owns the Pull&Bear, Bershka and Massimo Duti brands, is expanding in the US, enlarging and relocating stores and investing 900 million euros per year through 2025 on new logistics centers in Spain and the Netherlands.

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Tennis Attire is Everywhere. Credit the Pandemic, Social Media and Pickleball

Aryna Sabalenka, of Belarus, greets Emma Navarro, of the United States, at the net after winning their semifinal match of the US Open tennis championships, Thursday, Sept. 5, 2024, in New York. (AP Photo/Julia Nikhinson)
Aryna Sabalenka, of Belarus, greets Emma Navarro, of the United States, at the net after winning their semifinal match of the US Open tennis championships, Thursday, Sept. 5, 2024, in New York. (AP Photo/Julia Nikhinson)
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Tennis Attire is Everywhere. Credit the Pandemic, Social Media and Pickleball

Aryna Sabalenka, of Belarus, greets Emma Navarro, of the United States, at the net after winning their semifinal match of the US Open tennis championships, Thursday, Sept. 5, 2024, in New York. (AP Photo/Julia Nikhinson)
Aryna Sabalenka, of Belarus, greets Emma Navarro, of the United States, at the net after winning their semifinal match of the US Open tennis championships, Thursday, Sept. 5, 2024, in New York. (AP Photo/Julia Nikhinson)

While tennis fans savor the last matches of the US Open, a subset of spectators and TV viewers have watched the year's final Grand Slam tournament as a source of fashion inspiration they can use to serve looks off the court.
It may have escaped people who don't pay attention to clothing trends, but cities from Australia to America are awash in short pleated skirts, tennis dresses, polo collars and other garments that can make everyone look like they possess a country club membership and a respectable backhand, The Associated Press reported.
The styles naturally are on full display in the stands of Flushing Meadows. Students are sporting skorts - the skirt-short mashup often worn by tennis players - and crew socks as they return to college campuses. Young professionals and middle-aged parents are taking the posh and preppy aesthetic to cafes, parks and wherever they run errands.
“I’ve never played pickleball or tennis in my life, and I have like five tennis skirts,” Stacy Sierra, 19, said while walking on the University of Notre Dame campus in Indiana. Sierra said she likes the look of the skirts and preferred their flowy material to denim during the summer and early autumn.
The trend, dubbed “tenniscore,” owes its timing to multiple factors. It's an extension of athleisure, the time-saving, comfort-minded concept that made elevated yoga pants, spandex shorts and other recreational attire acceptable to wear in public, no workout required.
The popularity of pickleball - an easy-to-play mix of tennis, ping pong and badminton - as well as interest in timeless fashions that exude “polished comfort” help explain why clothing and shoe lines for inspired by racket sports are so ubiquitous this year, according to Kristen Classi-Zummo, an analyst with market research firm Circana.
The market research firm's data showed sales of women’s tennis apparel spiked 22% in the US between the beginning of the year and early August, while men’s tennis apparel saw a 19% increase. Athletic brands such as Nike, Fila and Adidas have rolled out fashion-forward collections of tank tops, shorts and visors to capture the momentum.
Fila, for its part, said in July that it was an ideal time for the company to “refresh its brand and product offerings” due to the rising popularity of sports like pickleball and tennis. One of its first cracks at the refreshed brand was a “Bellissimo” campaign, which the company described as a reimagination of the traditional country club as a "mix of sport and play."
Adidas created a different collection in honor of each of the four Grand Slam tournaments; shoppers can buy the cobalt blue and black dress Jessica Pegula wore during her quarter-final victory match over No. 1 Iga Swiatek on Wednesday for $130. Nike recruited fashion designer Yoon Ahn to create outfits for Naomi Osaka to wear while competing at the US Open and a retail tennis collection in colors meant “to evoke a rebellious, anarchistic teen aesthetic.”
Last week, Vogue magazine and the racket sports brand HEAD unveiled a tennis collection that the fashion magazine said took two years to create. Women's apparel brands like Free People and Abercrombie & Fitch also have gotten into the game along with luxury labels like Gucci, which has a partnership with No. 1-ranked men's singles player Jannik Sinner.
Circana first started seeing tennis and pickleball apparel – particularly athletic dresses - pop up in its data when consumers started venturing out more after the peak of the COVID-19 pandemic, Classi-Zummo said. People wanted to retain the ease of the loungewear they lived in during lockdowns but to look more polished and put together, she said.
Some fashion watchers categorize the trend as an offshoot of social media-fueled niche fads such as “ quiet luxury,” - which emphasizes high-quality materials and clean styles with no logos - and a close cousin known as an “old money aesthetic.” That's a term for styles viewed as displaying wealth - oftentimes generational - in a subdued way.
Others have credited “Challengers,” the movie starring Zendaya about a love triangle set in the world of competitive tennis, with reigniting interest in court clothes. (A generation ago, it was Gwyneth Paltrow's Izod dress in “The Royal Tenenbaums.”) Skorts have made a comeback with the help of celebrities like Taylor Swift, who was seen earlier this year wearing pleated beige and ruffled lavender ones, the latter while on a pickleball court.
Brands and retailers have taken notice as pickleball has soared from nearly nothing to 13.6 million US players in just a few years. (Padel, another tennis spinoff with roots in Mexico, also has gained traction, particularly in Europe.) Brands like Recess Pickleball and Tangerine Paddle offer clothing or accessories such as tote bags, and customizable paddles.
“We’re very lucky to have capitalized on a growing market, but I’m even shocked with sort of how fast it’s grown,” Tangerine Paddle co-founder Carly Llewellyn, whose company sells striped, flowery and other styles of custom-made paddles.

Health club operator Life Time and Lululemon signed an agreement allowing the active wear company to sell its apparel directly to club members and to collaborate on key pickleball events.
In April, Target rolled out a limited-time pickleball collection with the tennis brand Prince that included pleated skirts and other items that “delivered incredible sales momentum in all things pickleball,” Christina Hennington, the discount retailer's chief strategy and growth officer, said during a May earnings call.
Social media content creators, some of whom get paid to market products for brands or earn commissions from retailers like Amazon, have played a part in making tenniscore mainstream.