Why Europe's fast-fashion retail stocks are still feeling the heat online

Investors have been attracted to the growth profiles of online retailers as people increasingly shop via smartphones and tablets

Europe’s fast-fashion retail stocks are back in the spotlight. After a disastrous 2018, hurt by the summer heatwave and increased discounting, the shares are beating the benchmark Stoxx 600 Index this year.

Yet, not all are doing well in equal measure. Inditex, owner of the Zara chain, has fallen out of favor with investors, according to Citigroup analyst Adam Cochrane, and Wednesday’s quarterly results will be a chance for the Spanish retailer to show whether its sales target for the year is on track. Swedish fashion giant H&M reports revenue next week and the strength of its recovery will be key.