Key Takeaways:
The owner of Zara kept its sales momentum intact through early September, with constant-currency revenue up 9 percent on the year in the five weeks to Sept. 7, even as conflict-driven costs weighed on second-quarter profit and knocked about 3 percent off the shares.
"These excellent results highlight the extraordinary capabilities of our teams," Chief Executive Officer Óscar García Maceiras said. "In a highly complex global environment, they have succeeded in delivering every day to our customers all around the world the products and fashion experience that they demand."
First-half net income rose 6.8 percent to €3 billion on sales of €19.8 billion, up 7.6 percent, with constant-currency growth of 9.2 percent. Gross profit climbed 8.3 percent to €11.6 billion, lifting the gross margin 40 basis points to 58.7 percent, while EBITDA advanced 7.8 percent to €5.5 billion. The company generated €4.1 billion in funds from operations, 11 percent higher, and ended July with a net cash position of €10.4 billion.
The shares fell as much as 3 percent after the May-to-July quarter's gross margin came in at 56.7 percent, below expectations, as the war in the Middle East pushed up transport and input costs, the chief financial officer said. Inditex, which operates 5,444 stores across 215 markets, expects a stable full-year gross margin within plus or minus 50 basis points and a roughly 1 percent negative currency impact on 2026 sales.
The steady demand signals resilience in European fast-fashion spending even as retailers face a challenging backdrop and disruption from the conflict. Investors will watch whether Inditex can protect margins through the peak holiday season, with the Autumn/Winter collections already drawing a strong reception and the FY2025 final dividend of €0.875 a share due Nov. 2.
This article is for informational purposes only and does not constitute investment advice.
