The owner of the world’s largest fashion retailer Zara saw its stock price plummet by more than seven per cent last week after analysts dropped its target share prices for the year.
Ahead of Inditex’s full year results set to be released on March 14, JP Morgan announced that it was dropping its target for the year from €38 per share €35.5 per share, driving stocks down to a three-year low.
JP Morgan also said its forecasts for Inditex would drop five per cent due to a slowdown in sales during the second half of the fourth quarter and foreign exchange pressures.
Around half of the Spanish firm’s sales are made in other countries, making it vulnerable to fluctuations in the value of the euro and other currencies trading against it.
Following the news share prices dropped 7.7 per cent to €24.78.
Though a slowdown was expected in the last part of 2017, Inditex reported sales of £15.83 billion in the nine months to October 31, up from £12.96 billion a year prior.
Profits also jumped nine per cent to £9.08 billion, while gross margins hit 57.4 per cent.