Zara owner Inditex has today reported a strong start to its first quarter, with currency-adjusted sales up 9%, meeting analysts' expectations and demonstrating the fast fashion company's resilience despite fragile demand in key markets.
The result is likely to demonstrate to investors that Inditex can sustain solid growth despite European and US consumers facing further pressure from a surge in oil and gas prices triggered by the conflict in the Middle East.
"This is a solid and reassuring update from Inditex," analysts at JP Morgan said in a note.
Inditex CEO Oscar Garcia Maceiras said some of the group's stores in the Middle East had closed temporarily due to the conflict, impacting sales slightly.
"In the last weeks, some of our stores in a number of markets have been temporarily impacted," he said in response to an analyst's question about the Middle East. "This has had a slight impact on the trading update we have provided today but currently most of our stores are open in the region."
Analysts estimate the region accounts for 4-5% of Inditex's sales. Inditex operates there through franchise partner Azadea and its biggest market in the region is Saudi Arabia, where it has 163 stores, compared to 92 in Israel and 84 in the United Arab Emirates.
Inditex shares had hit a record high of €57.9 last month but had fallen back since then.
Expectations had been high ahead of today, with analysts estimating growth of anywhere between 8% and 12% for the February start of the first quarter.
Sales in the November to January quarter, including the key Black Friday and Christmas shopping periods, rose to €11.69 billion from €11.2 billion a year ago, and for the year as a whole sales grew 7% in currency-adjusted terms.
The pace of Inditex's sales growth has cooled since a post-pandemic boom, but its profitability has risen as it has improved stores and logistics to get new clothes to shoppers faster.
Inditex has been closing smaller, less successful stores and opening new, spacious flagships to make them less crowded and give them more of a premium brand feel. It has also invested €1.8 billion in building a second logistics hub in Zaragoza.
With fewer, bigger stores, Inditex said it expects overall store space to increase by 5% in 2026, after a 5.3% increase last year. Globally, the company had 5,460 stores at the end of January, 103 fewer than a year ago.
Helped by price increases over the past three years, Inditex's operating profit margin has grown, with its earnings before interest and taxes (EBIT) margin hitting 20.1% in 2025 after 19.6% in 2024.
Inditex's profitability is much higher than that of its major rival H&M, which had an operating margin of 8.1% in 2025.
Inditex said it would propose a dividend of €1.75 per share, above the €1.68 it distributed last year.
