Blame it on the rain — along with leap year, currency headwinds and economic malaise.

This story first appeared in the June 13, 2013 issue of WWD. Subscribe Today.

Europe’s fast-fashion giants on Wednesday reported slowing sales in recent months, although Spain’s Inditex SA continued to outperform its Swedish rival, Hennes & Mauritz AB.

Inditex SA said net income in its first quarter increased 1.4 percent to 438 million euros, or $574.5 million. Sales in the three months ended April 30 gained 5.2 percent to 3.59 billion euros, or $4.71 billion.

Dollar figures are converted from euros at average exchange for the periods to which they refer.

The parent of chains including Zara and Massimo Dutti, Inditex noted the second quarter kicked off at a faster pace, with sales between May 1 and June 7 increasing 8 percent in local currencies.

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Still, the figures represent a deceleration. Inditex recorded 16 percent revenue growth in the year ended Jan. 31 and a 12 percent gain in local currencies between Feb. 1 and March 11 of this year.

On a conference call, chief executive officer Pablo Isla called the latest results “satisfactory,” trumpeting positive like-for-like sales in the first quarter despite tough comps, negative currency effects and the loss of a day of trading in February due to the leap year in 2012.

“We continue to see significant growth opportunities for Inditex globally,” he said, revealing plans to launch online sales in Russia with the fall fashion season.

In the quarter, Inditex took its retail banners into several new markets: Pull & Bear to Germany, Massimo Dutti to Taiwan and Zara Home to Japan.

The firm now counts 406 stores in China and plans to keep adding 80 to 100 locations a year there.

Overall space growth is to hold a pace of 8 to 10 percent over the next three years, Isla said.

The group ended the first quarter with 6,058 stores in 86 countries, with 49 net openings in the period.

At H&M, second-quarter sales including VAT totaled 36.9 billion Swedish kronor, or $5.5 billion, down 0.06 percent compared with the corresponding period last year.

H&M said that in the three months to May 31, sales in local currencies, including VAT, increased 5 percent compared with the same period last year and that the negative impact on reported sales was from the stronger Swedish krona.

During the three-month period, sales in comparable units were down 4 percent.

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In May, sales in local currencies advanced 9 percent year-on-year including VAT. Sales in comparable units were flat.

H&M said its total number of stores amounted to 2,908 on May 31 compared with 2,575 at the same time last year.

In a note, Bernstein Research said the Inditex results “reflect difficult market conditions, compounded by poor weather, but expect improved performance throughout the year as comps become easier.”

H&M, meanwhile, “is faced with increasingly competitive markets in many of their core countries, which we expect to lead to margin deterioration as the increased proliferation of value apparel retailers results in pricing pressure,” Bernstein said.

Separately on Wednesday, Inditex said its global tax bill last year came to 4.01 billion euros, or $5.43 billion at current exchange, about 40 percent of which was paid in Spain.

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