Inditex Posts Record H1 Sales but Misses Profit Targets as Costs Climb

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9.9.2026

Quick Facts

Inditex reported H1 FY2026 net sales of €19.8 billion, up 7.6% year-over-year, with net income of €3.0 billion, up 6.8%.
Q2 operating profit of €2.09 billion came in 3% to 8% below analyst estimates from Citi and UBS, sending shares down 2.8% to €54.8.
Operating expenses grew 8.3%, outpacing revenue growth, driven by elevated transport costs tied to Middle East supply chain disruptions.

Inditex, the Spanish parent of Zara, reported first-half fiscal 2026 results on September 9 that set all-time records in absolute terms but disappointed investors on profitability. Shares fell 2.8% to €54.8 on the day of the announcement.

The company posted net sales of €19.8 billion and net income of €3.0 billion for the six months ended July 2026. EBITDA rose 7.8% to €5.5 billion. Gross margin reached 58.7%, up 40 basis points year-on-year.

Despite those headline numbers, operating expenses grew at 8.3%, faster than the 7.6% revenue increase. Second-quarter operating profit of €2.09 billion, representing a 19% margin, missed Citi and UBS forecasts of 19.7% to 20.3%. Earnings per share of €0.51 landed 3% to 8% below analyst estimates.

What Drove the Miss

Executives pointed to higher transport costs stemming from Middle East geopolitical disruptions as the primary pressure point. A €23 million loss in the other income and losses line also weighed on the result.

CEO Oscar Garcia Maceiras said the accounting lag on transport costs means pressure will likely persist into the second half of the year. The company maintained its full-year gross margin guidance of plus or minus 50 basis points.

CFO Andres Sanchez described the 58.7% gross margin as a demonstration of good execution, while acknowledging elevated freight costs in Q2. Garcia Maceiras noted the company holds roughly 2% global market share, signaling room for continued expansion.

Geography and Supply Chain

Europe excluding Spain was the largest revenue contributor at 51.5% of first-half sales, up from 50.7% the prior year. The Americas represented 17.9%, Spain contributed 15.6%, and Asia with the rest of the world slipped to 15.0% from 16.0%. Management said all geographies posted positive constant-currency growth.

Approximately 480 franchised stores in the Middle East remain open. Executives said regional sales improved from Q1 levels despite ongoing geopolitical sensitivity.

On tariffs, Inditex said exposure is limited by a diversified sourcing base spanning roughly 50 countries. About 70% of its products come from suppliers with relationships exceeding eight years. The company operates 16 primary distribution centers and a single central inventory system.

Full-Year FY2025 Context

The H1 results follow a record full fiscal year. Inditex closed FY2025, ending January 31, 2026, with net profit of €6.22 billion, up 6%, on net sales of €39.86 billion, up 3.2%. At constant exchange rates, sales grew 7%.

Zara accounted for approximately 70% of group turnover in FY2025. Oysho was the fastest-growing brand, with sales up 15.5% to €0.96 billion. Stradivarius grew 12.7% and Bershka grew 12.15%.

The group reduced its store count by 6% over three years while growing net selling space by 6%, resulting in a 22% rise in reported sales over that period.

With operating cost pressures expected to continue through H2 and analysts watching margin closely, Inditex’s ability to offset freight headwinds through pricing and inventory discipline will be the key story for the remainder of FY2026.