Zara Parent Inditex Posts Fresh Sales Uptick Despite Middle East Conflict — Update

By Andrea Figueras

Zara owner Inditex reported an acceleration in sales growth at the start of its fiscal year, despite some impact from the war in the Middle East.

The Spanish fashion giant said sales climbed 9% organically from Feb. 1 to March 8 compared with the prior-year period. That marks an uptick in growth from the 7% increase Inditex posted Wednesday for the year to the end of January.

The upturn at the start of the new fiscal year looks stronger than expected, given fears that war in the Middle East would hurt the group's sales, analysts at Deutsche Bank wrote in a note to clients.

Retailers face a possible hit from the war in the region due to store closures, disruption in the supply chain and a possible drag on consumer spending globally due to higher oil and energy prices.

"We are monitoring the situation closely at this stage," Inditex Chief Executive Oscar Garcia Maceiras said in a call with analysts. The group remains focused on supporting its teams in the Gulf countries affected by the war, he said.

"Some of our stores in a number of markets have been temporarily impacted," Garcia Maceiras said, though he noted that most of them, which are mainly operated under franchise by its primary partner Azadea Group, remain open. The trading update includes the slight impact that the conflict has had on sales so far, the CEO said.

Alongside fresh geopolitical turmoil, the company is also grappling with stiff competition from low-cost rivals like China's Shein. In the face of that competition, Inditex has been trying to reposition its core Zara brand to differentiate it from lower-priced fashion labels. These initiatives, which include a focus on storytelling and in-store experience, seem to be paying off, Third Bridge analyst Yanmei Tang wrote.

"By offering better design and quality at a lower price than luxury labels, Zara is drawing some shoppers who previously bought high-end fashion," Tang said.

Inditex said it would step up investment in a bid to further sharpen its brands. Capital expenditure of 2.3 billion euros ($2.67 billion) this year will be mainly used to bolster its commercial space and boost technological integration, as well as to improve its online sales platforms.

For the quarter to January, which includes the crucial holiday period, the group reported sales of 11.69 billion euros, higher than the 11.21 billion euros it made in the same period a year prior. The result compares with analysts' estimates of 11.70 billion euros, according to a poll compiled by FactSet. Net profit for the final quarter climbed to 1.6 billion euros from 1.42 billion euros.

For the current fiscal year, the company forecasts a stable gross margin, plus or minus 50 basis points compared with 58.3% it made in the prior year.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

March 11, 2026 06:40 ET (10:40 GMT)