Inditex – Bigger is Better

Inditex, the Spanish retail giant behind Zara, delivered a steady set of results for the first half of the year, with revenue rising 1.6% year-on-year to €18.4 billion. Gross profit reached €10.7 billion, up 1.5%, while net income nudged up 0.8% to €2.8 billion. The company operates across 214 markets, maintaining its vast international footprint. The company also owns brands such as Pull&Bear, Massimo Dutti, and Bershka. However, Zara represents more than seventy percent of total sales.  

The company generates more than half of its revenue from Europe. Revenue from the US declined to 18% of total sales, from 19% a year ago. Management expressed that this was mainly due to tariffs. Management acknowledged the slowdown but expressed confidence in the region’s longer-term potential.  

Inventory rose by 3% year-on-year, which management described as “high-quality” — likely a strategic move ahead of seasonal demand. There’s also been a noticeable shift in store strategy. Inditex is moving toward fewer but larger stores in prime locations, with higher average sales per store. This approach seems to be working, especially as the company continues to streamline checkout processes to improve customer experience.  

Interestingly, management highlighted a 9% constant currency sales growth between August 1st and September 8th: a strong early indicator for the current quarter and a sign that momentum may be building. 

On the investment side, Inditex is on track to spend €1.8 billion on ordinary capex this year, mainly for store refurbishments and new rollouts. An additional €900 million was allocated to logistics – signalling that the company is investing in infrastructure to support future growth. 

While the headline numbers may seem modest, the underlying story is one of thoughtful evolution. From store optimisation to logistics upgrades, Inditex is quietly reshaping its operations to stay ahead – and trying to create resilience for the future.