PARIS – Zara parent company Inditex reported that fourth-quarter sales rose 3.9 percent year-over-year to about 11.66 billion euros, in a miss that was partially attributed to currency headwinds, as the strong euro and falling U.S. dollar hit sales.

The fourth quarter numbers fell short of analyst expectations of 9 percent growth in constant currency.

“These results reflect the ability of our teams to honor the trust that millions of customers place in our eight commercial formats every day. Connecting with them, understanding their desires and delivering the best product and a differentiated experience underpin our long-term growth expectations,” Inditex chief executive officer Óscar García Maceiras said in a statement.

Looking at the full year, sales were up 3.2 percent year-over-year to 39.9 billion euros, in line with analysts’ consensus, while net inome was up 6 percent to 6.2 billion euros. Sales were driven by a strong gross margin and full price sales, as the Spanish fast-fashion giant looks to upscale its brands and stick to full-price sales – a strategy that has been paying off.

“Inditex has been elevating the perception of its Zara brand, helping it differentiate from ultra low-cost rivals like Shein,” said Third Bridge senior analyst Yanmei Tang. “The company is moving away from competing solely on price, and is instead focusing on fashion credibility, brand storytelling and the in-store experience.

“The strategy seems to be paying off as traditional luxury brands face pressure from rising prices. By offering better design and quality at a lower price than luxury labels, Zara is drawing some shoppers who previously bought high-end fashion,” Tang added.

Inditex maintained tight control over operating expenses in the full year, contributing to a 5 percent increase in EBITDA to 11.3 billion euros for the full year. The retailer emphasized its ongoing investment in store optimization, online platforms, and sustainability initiatives as it continues to expand globally.

“Inditex has executed well in recent years, benefitting from its strong design/buy set up and quick response business model. In recent years it has become more integrated between stores and online and has made good use of RFID to maximize full price sales through efficient in-store inventory management, and most recently for more frictionless checkout,” said RBC analyst Richard Chamberlain.

The company said its winter collections were well received across all regions, with an especially strong performance in its largest European markets. Its home country of Spain in particular boosted numbers, with sales up 9 percent there.

Looking ahead, sales at the start of the first quarter from Feb. 1 to March 8 were up 9 percent year-over-year in constant currency, with the spring collections performing well.