Inditex posts record Q1 profit of €1.375 billion, shares jump 5% as spring collections drive sales

Record first quarter

Inditex, the Spanish fashion group behind Zara, Bershka, Massimo Dutti and Pull&Bear, reported a record net profit of €1.375 billion for the first quarter of its 2026 fiscal year, a 5.4% increase on the same period a year earlier. Sales reached €8.75 billion, up 5.8% year-on-year, or 8.8% at constant exchange rates. The group attributed the performance to strong reception of its spring-summer collections and the execution of its integrated store-and-online business model.

Gross margin rose 67 basis points to 61.2% of sales, with gross profit climbing 6.9% to €5.359 billion. Operating expenses increased 6.4% in the quarter. EBITDA grew 7.3% to €2.568 billion, EBIT advanced 7% to €1.756 billion, and pre-tax profit rose 5.5% to €1.762 billion, yielding a pre-tax margin of 20.1%. The group’s net cash position stood at €10.796 billion at quarter-end.

Second-quarter acceleration

Early indicators for the second quarter point to gathering momentum. Between 1 May and 1 June 2026, store and online sales at constant exchange rates grew 11.5% compared with the same period in 2025, helped by favourable calendar effects. Analysts at Bernstein said the update showed a very strong performance and suggested second-quarter consensus estimates (currently 7.8% revenue growth) could be revised upwards. RBC Capital Markets described the results as solid, highlighting the 11.5% constant-currency sales growth in the early weeks of the quarter.

Middle East headwinds and pricing

During the analyst call following the results, Inditex acknowledged that geopolitical instability in the Middle East is affecting sales in the region. Gorka García-Tapia, the group’s head of investor relations, said the region’s roughly 480 franchise-operated stores all remain open but noted the impact is uneven across different markets.

Geopolitical conditions are having an impact on sales in the Middle East region.

He stressed that the group’s broad geographic diversification allowed it to maintain solid overall growth. On pricing, García-Tapia said growth continues to be driven by volume rather than price increases, with the company maintaining a relatively stable pricing policy and making only occasional adjustments.

What we continue to see, not only in the United States but generally, is that the group’s growth comes from volume and not from prices.

Board changes and shareholder returns

The group announced it will propose the appointment of José Ignacio Goirigolzarri, former chairman of CaixaBank and Bankia, as an independent board director at the shareholders’ meeting on 7 July. He will replace Rodrigo Echenique, whose mandate expires on 12 July. On shareholder remuneration, the board will propose a total dividend of €1.75 per share for the 2025 fiscal year, comprising an ordinary dividend of €1.20 and an extraordinary dividend of €0.55, payable in two equal instalments.

Investment and market reaction

Inditex confirmed a 2026 capital expenditure plan of approximately €2.3 billion, focused on store network optimisation, technology (including deeper integration of artificial intelligence), and digital platform reinforcement. The group expects around 5% growth in gross retail space this year. At current exchange rates it anticipates a -1% currency impact on 2026 sales.

Shares of Inditex jumped more than 5% at the Madrid open, reaching €55.40, and led gains on the Ibex 35 index, which rose 0.26% to surpass 18,300 points. The broader European market opened lower, with the FTSE 100, CAC 40 and DAX all in negative territory. Brent crude traded near $97.9 per barrel, up almost 2%, while WTI rose to around $95.7.