Zara owner keeps growth on track despite momentum cooling
Robyn Duffy, Consumer Markets Senior Analyst at RSM UK, comments on today’s results from Zara owner Inditex: “Inditex’s half year results show growth is on track, with sales still rising year-on-year even as momentum cools. The future outlook is promising with revenue jumping 9% in the five weeks to September, indicating a solid start to Q3 and beating estimates.
“What stands out is Inditex’s ability to continue outperforming peers in a challenging trading environment. While revenue and profit growth slowed in H1, the group’s strong balance sheet, operational discipline, and compelling designs are still striking a chord with consumers, particularly the millennial generation that grew up with the brand.
“The business’s enhanced store strategy is paying off. By rationalising sites and focusing on increasing square footage in successful locations, Inditex is creating spaces that do more than just sell clothes. These sites are proving more profitable, more experiential, and ultimately more compelling for consumers by blending physical and digital retail. The planned €1.8bn investment in distribution centres through 2024–25 should deliver a more efficient supply chain and strengthen Inditex’s ability to capture future growth opportunities globally.
“Today’s fast-fashion environment is complex. Online-only players have been struggling, while Primark’s store-focused model has had a mixed year across geographies. Inditex is balancing both worlds, using its stores and digital platform in tandem. Its seamless click-and-collect and enhanced in-store experience, especially with quick, simple returns, are keeping shoppers loyal and helping it win market share, while rivals are still refining their strategies.
“Overall, Inditex’s H1 performance underlines its ability to stay resilient and agile in the increasingly tough retail climate. A disciplined store strategy, continued global supply chain investment, and a business model that integrates physical and digital retail means the group is well positioned to protect margins over the long term and strengthen its lead over peers as the fast-fashion market evolves.”