Fashion built to last: Why Zara is not losing momentum

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Fashion built to last

Profit is growing alongside sales

In the first half of 2026, Inditex increased sales by 7.6% to $23 billion, according to the group’s website. Excluding currency fluctuations, sales rose 9.2%. Zara, Zara Home and Lefties accounted for around $16 billion of revenue. Inditex also owns Pull&Bear, Massimo Dutti, Bershka, Stradivarius and Oysho.

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The group’s net income rose 6.8% in the first half to $3.5 billion. Operating profit increased 7.6% to $4.4 billion. Free cash flow grew even faster, nearly doubling from $1.4 billion to $2.7 billion.

Growth continued after the reporting period ended. Between August 1 and September 7, store and online sales increased another 9% compared with the same period a year earlier. By the end of July, Inditex operated 5,444 stores worldwide.

From flagship stores to budget fashion

Inditex continues to invest in positioning Zara as a more premium and high-profile brand. The company is opening large flagship stores, upgrading key locations and working with prominent designers. This year, for example, Zara brought in former Dior creative director John Galliano as a guest designer, with his first collection set to launch in September, Bloomberg reported.

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At the same time, the company is not abandoning mass-market shoppers. According to Barclays, most Zara products still cost less than $58. For more price-sensitive consumers, Inditex is expanding Lefties, the group’s cheapest brand, which competes with Shein and Primark. In August, Lefties opened its first store in Liverpool, while Inditex plans to launch the brand in Germany next year.

Another advantage of Inditex is its ability to adjust its assortment during the season. The company controls a large part of the chain from design and sourcing to logistics and sales, allowing it to respond more quickly to changes in demand and fashion trends. In the first half of the year, Inditex carried out store openings, relocations, expansions and refurbishments across 51 markets.

At the same time, Inditex continues to invest heavily in stores and logistics. In 2026, the company plans to spend around $2.7 billion on development, plus another roughly $230 million on upgrading its corporate infrastructure. According to RBC, Inditex’s annual capital expenditure is about three times higher than H&M’s.

Inditex is worth more than Hermès

The resilience of the business is also reflected in its share price. Over the past 12 months, Inditex shares have gained around 34% and reached an all-time high in August. The group’s market capitalization climbed to roughly $205 billion and, for a time, surpassed that of Hermès.

Against this backdrop, some rivals look weaker. Inditex continues to grow faster than H&M while investing about three times more each year than the Swedish company. Shein is facing an even more difficult situation: its sales growth slowed ahead of its stock market debut, while its valuation came in far below the peak levels seen in 2022.

The company founded by Amancio Ortega is now led by a new generation: his daughter Marta Ortega serves as chair of Inditex. Another daughter, Sandra Ortega, remains a major shareholder in the group. But the basic model has stayed the same — adjusting assortments quickly, serving different price segments and continuing to invest heavily in stores and logistics.

Ortega’s model faces a new test

Inditex is not delivering double-digit profit growth or trying to surprise the market with record numbers every quarter. But at a time when consumers are spending more cautiously, the group is still increasing sales, generating more free cash flow and investing billions of dollars in further expansion.

Amancio Ortega stepped away from day-to-day management long ago, but the system he created has survived a generational transition and continues to work. For Inditex, the current difficult market has so far been less of a brake than an opportunity to show how resilient the business has become beyond Zara alone.

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