Investing.com -- Global brokerage firm Bernstein remains cautious on the near-term outlook for Inditex (BME: ITX ), the parent company of Zara, and Swedish fast-fashion retailer H&M (ST: HMb ).

For Inditex, the concerns stem largely from recent adverse weather in the company’s core Spanish market, raising questions about the sustainability of current growth momentum.

Inditex is set to report Q1 results on June 11. Bernstein expects constant currency (CC) sales growth of 5.7%, marginally ahead of consensus at 5.4%. This forecast assumes the group maintained the 7% growth rate recorded in the final week of the prior quarter throughout Q1.

Bernstein’s margin forecasts are also slightly ahead of peers, with gross and EBIT margins seen benefiting from seasonal strength.

However, analysts are flagging a potential slowdown in the company’s momentum heading into the second quarter.

“The weather has been unfavourable for Inditex from the beginning of March to date,” analysts led by William Woods said in a report, citing average temperatures about 3% lower and rainfall 70% higher than the four-year average.

May has been particularly poor, with rainfall up 61% and temperatures down 8%.

Bernstein’s team believes these conditions could weigh on footfall and sales trends into Q2. The analysts model 6.8% constant currency growth for the quarter, trailing the consensus estimate of 7.3%.

They caution that if poor weather persists, the growth exit rate from Q1 may be difficult to maintain, “which makes the risk/ reward unfavourable vs. H&M into Q1,” the analysts said.

With respect to the much-debated tariff war, the analysts believe tariffs will have a “limited impact” on Inditex.

For H&M, which reports Q2 results on June 26, Bernstein is also less optimistic than the market. It sees constant currency sales growth of just 0.3% versus the consensus of 1.2%, citing “tough comps of +2.8% last year” as a key headwind.

While favorable weather in Northern Europe may help, the broker expects the net effect to be flat growth for the quarter.

“H&M delivered soft +2% CC growth in Q1-25, and this was on weak comps of -2%. We think the comp impact and positive weather effect will likely net to roughly flat growth overall in the quarter,” the analysts noted.

Bernstein rates Inditex “Outperform” with a price target of €55.00, while it maintains an “Underperform” on H&M, with a target of SEK110.00.