Zara owner Inditex on Wednesday posted a year-on-year rise in fourth-quarter sales that met expectations, even as the retailer pointed to a slowdown in demand at the start of the year.

The Spanish retailer reported revenues of 11.21 billion euros [$12.2 billion] in the three-month period, matching the 11.2 billion euros forecast by LSEG analysts and up from the 10.34 billion euros recorded in the same period of last year.

Fourth-quarter net income came in at 1.42 billion euros, also in line with analyst expectations.

Full-year sales rose 10.5% in currency-neutral terms to total 38.63 billion euros in 2024, just ahead of an anticipated 38.57 billion euros, while net income came in at 5.88 billion euros for the year, in line with forecasts. That compares to net sales of 35.9 billion euros and net income of 5.4 billion euros in 2023, which the company said were record highs.

Shares were down 8.2% by 8:34 a.m. London time.

The company, which also owns Pull & Bear, Bershka and Massimo Dutti, nevertheless pointed to a slight slowdown in first-quarter sales this year. Revenues were up 4% in currency neutral terms from Feb. 1 to March 10, versus 11% growth the year prior.

It follows a rare miss on sales and profit in the third quarter, which the company attributed partly to a stronger U.S. dollar.

The results point to the widening gap between Inditex and rival H&M, which has been struggling amid increased competition from lower-cost retailers such as Chinese-founded fast-fashion giant Shein.

H&M in January reported fourth quarter sales that fell short of expectations but nevertheless rose 3% in local currencies to 62.19 billion Swedish krona ($6.15 billion). The Swedish high street retailer said the timing of Black Friday had hurt sales, but that things had picked up in December and January.

This is a breaking news story and will be updated shortly.