Transcript pdf

INTERIM HALF YEAR 2025

INDITEX

INTERIM HALF YEAR 2025

CONFERENCE CALL SCRIPT

10 SEPTEMBER 2025

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INTERIM HALF YEAR 2025

INDITEX PARTICIPANTS

Óscar García Maceiras - CEO

Andrés Sánchez - CFO

Gorka García-Tapia – Director of Investor Relations

Conference Call Participants

Geoff Lowery - Redburn – Analyst

Anne Critchlow - Berenberg – Analyst

Monique Pollard - Citigroup – Analyst

Sreedhar Mahamkali - UBS – Analyst

Warwick Okines - Exane BNP Paribas – Analyst

James Grzinic - Jefferies - Analyst

Richard Chamberlain - RBC – Analyst

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INTERIM HALF YEAR 2025

Slide 5: Solid Operating Performance

Good morning. Welcome to our results presentation. It is good to be with you all today.

In the first half of twenty twenty-five (2025), we have again achieved a solid performance, with satisfactory sales in a complex market environment and keeping strong levels of profitability . The efficient execution accomplished by our teams demonstrates the strength of

Inditex’s business model.

This business model continues to be driven by our unique fashion proposition, an increasingly optimised customer experience, our focus on sustainability and the quality and commitment of our teams. These factors continue to enhance our competitive differentiation.

Our Spring/Summer collections have been well received by customers.

We had a satisfactory sales growth of one point six (1.6%) percent.

Sales in constant currency increased by five point one (5.1%) percent.

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It is evident from the figures we are providing this morning that the execution of the business model has also been strong, reflected in the good gross margin performance and by disciplined cost control.

At the bottom line, net income increased zero point eight (0.8%) percent to two point eight (€2.8) billion euros.

This strong performance has continued going into the second half of the year. Store and online sales in constant currency between the first of August (1st) and the eighth of September (8th) grew nine

(9%) percent.

Slide 6: Global Growth Opportunities

Our diversified presence across two hundred and fourteen (214) markets, in conjunction with a relatively low market penetration in most of these markets, underpins our belief in the significant global growth opportunities we have ahead of us.

This confidence comes from the fact that we have a unique model that permits us to build upon the increasing levels of differentiation we have seen in recent years.

And now, let's move to Andres to go over numbers.

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Slide 7: CFO

Slide 8: Financial Summary

Thanks Óscar.

Slide 9: Solid Operating Performance

As you have seen in the report released earlier this morning, Inditex executed in a very consistent manner in the first semester of 2025.

Sales performed well at plus 1.6%. Furthermore, by actively managing our supply chain we have been able to generate a very good gross margin performance.

In line with what we saw in the first quarter results, operating expenses in the first half have been closely monitored.

EBITDA, in turn, increased 1.5% to reach €5.1 billion euros.

...and net income grew by 0.8% to €2.8 billion euros.

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Slide 10: Sales

On the top line, I'll point out that sales reached 1.6%, to reach €18.4 billion euros. In constant currency, that translates to 5.1%.

We saw consistent growth in sales in our integrated model across both channels.

At current exchange rates, we expect a -4% top line currency impact for the full year 2025.

Slide 11: Global Store & Online sales breakdown

We enjoy a presence in 214 markets, as well as a low market share in the vast majority of these markets. It should also be pointed out that the sector as a whole continues to be very fragmented. It is due to these factors that we see continued growth for Inditex over the medium to long term.

In constant currency, all geographical areas had a positive sales evolution.

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Slide 12: Gross profit

In the first half of 2025, gross profit increased 1.5% to reach €10.7 billion euros. The gross margin reached 58.3%. This gross margin performance serves as a demonstration of the good execution of the business model over the period despite a challenging market environment.

Based on the data we have at our disposal right now, for the full year 2025, we expect a stable gross margin of +/-50 basis points.

Slide 13: Operating expenses

As you can see, throughout the half year we have been able to maintain firm control over operating expenses across the business.

Operating expenses increased 2.2% in the first six months of 2025.

It is worth highlighting that the PBT margin came in at 19.6%.

Slide 14: Working capital

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Operating working capital remains negative as a result of the business model. The development of operating working capital is very much aligned with the performance of the business over the period, as you would expect.

In conjunction with the satisfactory operating performance we have seen in the first semester, Inditex’s inventory as of the 31st of July was 3% higher. It is important to note that the closing inventory at the end of the trading period was of high quality.

Slide 15: Cash Flow

As you can see from this slide, we continue to generate very strong levels of cash flow. Funds from operations increased 5% to 3.7 billion euros.

Capital expenditure reached 1.3 billion euros, reflecting the ordinary and extraordinary investments in 2025, focused on ensuring future growth.

Cashflow in the period was impacted by the calendar of payments coming from the normalisation of supply chain conditions over the last year relating to the Red Sea.

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And now over to you Gorka.

Slide 16: Director of Investor Relations

Slide 17: Concepts

Thank you Andres.

Slide 18: Sales by concept

As Óscar and Andres have alluded to already, we are content with the performance of the Group in the first half of 2025 and with the overall execution of the model over the period.

The global rollout of the optimisation programme continues to take place. As per usual, we are of course referring to new store openings, refurbishments, enlargements and absorptions.

It may interest you to know that sales in constant currency have been positive across all concepts over the period.

Slide 19-21: Concepts

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To give you a taste of what we've been doing, in the first six months of this year, Inditex opened stores in 35 different markets all across the globe. Each of the concepts, with no exception, are participating in the global growth plan.

We continue to expand our concepts into new markets. Stradivarius entered Austria in July with a store in Vienna. Tomorrow [11th Sep]

Oysho opens its first store in The Netherlands in Amsterdam

Kalverstraat.

Finally, Manchester Trafford Centre is a good example of our active store optimisation programme. Taking advantage of a large real estate opportunity, Zara and Pull&Bear have all relocated to new stores with larger footprints while Bershka has opened its first store in the mall.

We'll go into more detail as to some of these activities shortly.

And now, back to you Óscar.

Slide 22: CEO

Thank you Gorka.

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Slide 23: Our fashion proposition

Our objective has always been to continually strengthen and reinforce the key pillars of our highly integrated business model.

Slide 24: (VIDEO)

As has always been the case, our first priority is to enhance the appeal of our commercial proposition. After all, it is the creativity, innovation, design and quality of our collections that will determine our success going forward.

Thanks to our more than seven hundred (700) designers and our prototype teams, every meticulous detail in the design process is taken care of, enabling us to offer the highest quality fashion to customers in all corners of the globe.

The end result of our unique approach is the integration of the physical with the online experience in a seamless manner that permits us, across multiple formats, to rapidly react to changing fashion trends and offer the latest fashion collections.

Slide 25-27: Zara Stores (Freiburg Kaiser Josef Strasse, Leipzig

Grimmaische Strasse, Manchester Trafford Centre

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With our integrated store and online model, our teams have been able to take advantage of the growth opportunities we see across all channels, concepts and markets.

Underlining this consistent level of growth are the new openings, the enlargements and the refurbishment of stores in the very best locations, expanding into new cities and into new territories and launching new services that enhance the customers shopping experience.

As Gorka has already mentioned, in August Zara relocated to a new store in Manchester Trafford, which has dedicated spaces for some of our collections, including Zara Athleticz which offers customers a sportswear collection for men.

Slide 28: Madrid Serrano & The Apartment (VIDEO)

Another example is the recent reopening of our store in Madrid

Serrano. This iconic location includes our third "The Apartment", a new way of interacting with our customers, also available in

Compostela A Coruña and Rue de Bac Paris, that offers the premium part of our Zara and Zara Home collections in a highly curated way.

Slide 29: Improving the store technology ecosystem

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The rollout of the "Soft Tag" programme at Zara was completed last year. This programme adds to the existing in-store technology ecosystem with Click & Collect silos, assisted checkouts and drop- off points and sorters. We are using this as a springboard for the further integration of the online platforms with our increasingly digitalised stores for the years to come. The technology is being rolled out currently in Bershka and Pull&Bear.

Slide 30: Sustainability

Within the #bringyourbag initiative and thanks to the reuse of shopping bags by our customers, we have reduced their consumption in our stores by forty nine percent (49%).

In addition, we are investing the equivalent full amount raised from charging for recycled paper bags and envelopes in environmental projects in over thirty (30) countries, in partnership with non-profit organisations such as Conservation International and WWF.

Recently, we have formalised a new program, in collaboration with the international environmental organisation Ocean Conservancy, aimed at the protection of marine ecosystems and biodiversity. This agreement, includes the removal of more than four hundred and fifty (450) tonnes of plastics from beaches and areas of high environmental value, the collection of nets and fishing gear

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abandoned in the oceans and the promotion of "zero waste" projects for the collection and recovery of waste.

Slide 31: Outlook 2025

With a view to Inditex's long term growth potential, in the current year, we are planning investments that will scale our capabilities, will generate efficiencies and will increase our competitive differentiation.

The growth of annual gross space in the period twenty twenty-five to twenty twenty-six (2025-2026) is expected to be around five percent (5%). Over this same time period, Inditex expects net space to be positive, along with strong online sales.

For twenty twenty-five (2025), we estimate ordinary capital expenditure of approximately one point eight billion euros (€1.8 billion). We continue to focus the ordinary capital expenditure on our global store base, the online platform, and the roll out of technology programs aimed at enhancing the level of integration.

Slide 32: Logistics expansion on track (VIDEO)

As we have already shared in recent results publications, given our view on Inditex's strong long-term growth opportunities, we are in

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the process of executing the logistics expansion plan set for twenty twenty-four and twenty twenty-five (2024 and 2025).

This two-year extraordinary investment programme focusing on the expansion of the business allocates nine hundred (900) million euros per year to increase logistics capacities in each of the twenty twenty-four and twenty twenty-five (2024 and 2025) financial years.

The logistics expansion plan is on track. The Zaragoza (Two) II

Distribution Centre is now up and running.

Our centres have the highest standards of sustainability and cutting-edge technology. We focus on productivity and team well- being. In July, Inditex invested in Theker Robotics, a startup developing AI-driven logistics automation.

Slide 33: 9% dividend increase

A brief reminder on the dividend. The final dividend payment for twenty twenty-four (2024) of zero point eight four euros (€0.84) per share will be made on the third of November twenty twenty-five (3rd

November 2025).

Slide 34: A strong start to 2H2025

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I would like to finish with a comment on our current performance.

Autumn/Winter collections continue to be very well received by our customers.

Store and online sales in constant currency increased nine percent

(9%) between the first (1st) of August and the eighth (8th) of

September twenty twenty-five (2025) versus the same period of twenty twenty-four (2024).

Slide 35: 1H2025 Results

Thank you all for attending this results presentation. That concludes our presentation for today. We would be happy to answer any questions you may have.

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Q&A: James O’Shaughnessy – Operator

The telephone Q&A session starts now. If you would like to ask a question, please press Star-5 on your telephone keypad. If you wish to withdraw your question, please press Star-5 again. We request that you limit yourself to only one question per turn so we can maximize the number of participants in the session. If you have further queries, you may press Star-5 again after the next person's question has been addressed. Please ensure your phone is not on mute.

The first question comes from Geoff Lowery from Redburn.

Go ahead, Geoff.

Geoff Lowery - Redburn – Analyst

Good morning, team. It's not often that Inditex comments on markets, but you've used the interesting phrase of “complex.” Can you help us understand more exactly what you mean by that? Is it what you're seeing from the consumer? Is it a comment on supply chain or tariffs? Sort of, just help us understand it a little bit more, please. Thank you.

Gorka García-Tapia – Inditex

Thank you, Geoff. Now, when we're talking about market and challenging conditions, we're really talking about the market as a whole. So, you think of, for example, the tariffs and the trade wars and the consequences of the FX swings we've seen over the

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period. So, we're just highlighting that, in any case, what we are also liking to mention is the fact that, as you've seen the performance of the group in the quarter and the resulting gross margin, which we think is a good reflection of the strong execution of the unique business model that we have, we've been able to, somehow, overcome all of those headwinds. Thank you.

James O’Shaughnessy – Operator

The next question comes from Anne Critchlow, from

Berenberg. Go ahead, Anne.

Anne Critchlow - Berenberg – Analyst

Thank you for taking my question. Good morning. I’d like to ask about Lefties, because of the expansion at this point, I'm just wondering if there are any regions or countries where you think

Lefties wouldn't be relevant. And which countries or regions are at the focus of store openings in the short- to medium-term? Thanks.

Gorka García-Tapia – Inditex

Great. Thank you, Anne. With regards to Lefties, we talked about the fact that it already has an international presence. It originated with more focus in its heritage markets of Spain,

Portugal, and also Mexico. Currently, it has presence in 18 markets, and we are testing Lefties in a series of other markets. We've also reported today, as you've seen in the note, that Lefties currently has

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210 stores versus last year's store count, which was about 198 stores. So, we're just growing, as we are with all concepts, with a lot of opportunities that we see on a project-by-project basis. Thank you.

James O’Shaughnessy – Operator

The next question comes from Monique Pollard from

Citigroup. Go ahead, Monique.

Monique Pollard - Citigroup – Analyst

Hello, good morning. Thank you for taking my question. My question keeps coming back to this point of, you know, the strength of the gross margin in the second quarter or stability over the first half. I guess, as you point out, given the headwinds from the tariffs, et cetera, that has come in quite a bit better than expected. Just wondered if you could talk a bit about what you have done to manage the tariff impact, you know, if there has been some continued-focused price increases in the U.S., negotiations with suppliers, et cetera.

Gorka García-Tapia – Inditex

Hi. Thank you, Monique. Great. So, with regards to tariffs, I think, first of all, I'd like to say that, you know, the current

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environment is difficult to predict, and we're, of course, continuously monitoring the situation, and it's quite fluid.

We generally feel that -as a company- we have three key tools at our disposal, and I think we've talked about this in the past.

First of all, you have to consider that we are a global company, and therefore, we have a lot of experience related to tariff regimes and changes of tariff regimes.

The second one is, one point that we always highlight, that we have very broad-based diversification, both in terms of sales as well as in the sourcing. I think this is a great advantage for us to manage all of these issues.

And then, finally, of course, the flexibility of the business model, which is also leveraged on that proximity sourcing that we always highlight. I think that, with regards to the tariffs in the U.S. specifically, you know, we have a stable pricing policy that we're always talking about, and of course, all pricing activity, be it in the

U.S. or any other geography, is primarily driven by commercial decisions, not financial ones. And what we try to do in every market is maintain our relative position. So, with all that in mind, we're quite confident with regards to the gross margin guidance for the year of plus/minus 50 basis points. Thank you.

James O’Shaughnessy – Operator

The next question comes from Sreedhar Mahamkali, from

UBS. Go ahead, Sreedhar.

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Sreedhar Mahamkali - UBS – Analyst

Hi, good morning. Thanks for taking my question. If you could talk a little bit about online stores. Clearly, over the last few years, online has grown considerably faster than in stores. Do you think that is to continue? And, as a result, do you think the space growth we have seen this year is a good proxy for the medium term as well? Please, thank you.

Gorka García-Tapia – Inditex

Great, thank you, Sreedhar. As you know, we have a fully- integrated business model. And the reason I mention this is because it's difficult to think of online growth without the physical store presence. So, you really have to see it as a whole and not try to separate both channels. As for us, really, we feel that it is, one, a consequence of the other. If you think of, for example, online sales without a store, or store sales without online, it's difficult for us because of that fully integrated business model.

I think what you should consider is that we continue growing and we see great opportunities of growth in both channels, in all markets and throughout all concepts. Thank you.

James O’Shaughnessy – Operator

The next question comes from Warwick Okines, from BNP. Go ahead, Warwick.

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Warwick Okines - Exane BNP Paribas – Analyst

Thanks and good morning, everyone. Perhaps you could talk about the growth in the Americas’ region in the half, and in particular, just going back to March 2023, when you said you'd have at least 30 expansion projects in the U.S. over three years. Are you on track to meet that number? Thank you.

Óscar García Maceiras - Inditex

Thanks for the question. The growth of the Group is broad- based across all regions and concepts. As you know, the U.S., it's a very relevant market for us and we continue to see opportunities to keep on executing that strategy of selective growth in the market.

In 2025, we remain very active in the U.S. In June, for instance, we relocated to a new flagship store in L.A., The Grove, with significantly more space and upgraded customer experience.

Some additional projects have already been executed, including another opening on the Boston CambridgeSide Mall and more locations, New York Hudson Yards. And more projects for the rest

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Francisco, or the opening of a store in Charlotte that will imply the opening of our State number 26 with stores in the U.S. And of course, all of them combined with solid, very solid performance of our online platform in the States.

We will keep on exploring new opportunities for securing the market for our different formats. Thank you.

James O’Shaughnessy – Operator

The next question comes from James Grzinic from Jefferies.

Go ahead, James.

James Grzinic - Jefferies - Analyst

Thank you, James. Good morning, all. Congratulations. Just a quick one, I appreciate your guidance around gross margin, but I was wondering, when I think about the timing of supply chain cost deflation, FX, tailwind building on sourcing, product cross deflation, should I be thinking these stock-property building in the winter ranges that are hitting the stores now? I'd be curious on your thoughts about that dynamic and the timing of that, please.

Gorka García-Tapia – Inditex

Great. That's a good question. I think, from our perspective, what we see is that, you know, in general, the demand of our

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collection has always been driven by the ability of us to be able to execute the business model, you know? And so, that's how we're thinking about the second half of the year.

I get your point with regards to, for example, FX, but you have to also consider that though we do have a sourcing in U.S. dollars, we have somewhat of a natural hedge on the sales side as well, which is what gives us a little bit of confidence when we're talking about stable gross margin of plus/minus 50 basis points.

Thank you.

James O’Shaughnessy – Operator

The next question comes from Richard Chamberlain from

RBC. Go ahead, Richard.

Richard Chamberlain - RBC – Analyst

Thanks, James. Morning, guys. I just had a question on working capital, please. I wondered if you could just explain the drivers of the working capital outflow that you've seen in the first half, in the cash flow statement, in particular, the changing current liabilities. It's an €811 million cash outflow by the looks of it in the first half. Thank you. Thanks a lot.

Andrés Sánchez - Inditex

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Thank you for your question. As we explained during the presentation, this decline was driven primarily by the normalization of our supply chain conditions over the last year related to the Red

Sea. So, this has led to a more normal payments during the period compared to the same period of last year. And this is, as we had explained during fiscal year 2024 results, would also explain why inventory levels have also fluctuated over the last two years. A slight shift in timing. This impact will normalize next year. Thank you.

James O’Shaughnessy – Operator

We're going to move over to the webcast questions now.

There's a couple of questions-- a few questions we've had today.

The first of which relates to the new flagship store in Manchester.

“You recently opened a new flagship store in Manchester. Can you give us some color on this and your general view on the UK, please?”

Óscar García Maceiras - Inditex

Thanks for the question. Well, the UK is, of course, a very relevant market for us. We continue to see very good opportunities to keep on growing, both for Zara and the other concepts in different locations. After recent relevant projects in cities like Liverpool or

Birmingham, and our recent flagship stores for Pull&Bear, Massimo

Dutti, and Oysho in Oxford Street, London, we have taken advantage of a large real estate opportunity in Manchester Trafford

Centre, as we mentioned during the presentation. And this

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opportunity is allowing us to expand our Zara store over 40%, relocate Pull&Bear, open Bershka, and in the coming months, also to relocate our Stradivarius store.

The experience of our customers has significantly improved, as we are offering our different collections with the state- of-the-art technology that includes silos for online orders and returns, and assisted-checkout areas.

For 2026, we will continue to be very active in the UK with plans, for instance, to refurbish some of our iconic stores in London, such as our Zara stores in Bond Street and Brompton Road. Thank you.

James O’Shaughnessy – Operator

Thank you, Oscar. The next question on the webcast platform relates more to the younger concepts. “Can you explain why some of the younger concepts have been growing quite so strongly recently? Can you provide some color?” Thank you.

Óscar García Maceiras - Inditex

Thank you. Well, we are happy with the performance of our different concepts, of course, including Zara. Our other concepts are performing very well with the ambition of further diversifying our customer base and our product offering. We continue to see additional good opportunities to expand their presence in new markets. We have just mentioned during our presentation two

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examples, the arrival of Stradivarius and Oysho to Austria and The

Netherlands with the opening of our new stores in Donauzentrum,

Vienna and Kalverstraat, Amsterdam.

Another example is Denmark for Bershka that is about to open its first store in that market after having a very positive feedback in recent openings of the first stores in Sweden and India.

James O’Shaughnessy – Operator

The next question relates more to the technology systems within the stores. “Can you talk about the stock technology ecosystem, including sorters, please?”

Óscar García Maceiras - Inditex

As we have mentioned during the call, we are executing many projects to improve the customer experience in our stores, thanks to the rollout of soft-tag technology. Some of these projects involve customer-facing technology, like assisted checkouts, click-and- collect, and drop-off points. Customers' feedback as I have just mentioned, with the example of Manchester Trafford has been very positive with an increasing level of adoption in the different markets.

We are also introducing technology that impacts and improves the experience of our team behind the scenes in the stores. And one of these technologies, which we are rolling out in the stores, are our sorters that support some processes that are key, in order to make, as quick as possible, available to customers, products that are

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temporarily outside the commercial floor, in the stock rooms or fitting rooms, or when new products arrive.

James O’Shaughnessy – Operator

The next question on the webcast platform relates to the trading update. “There was a good trading update of 9% going into the second half of the year. Could you provide some color on this, please?”

Óscar García Maceiras - Inditex

Thanks for the question. Well, I guess that's obvious that we are seeing a positive evolution throughout the year. First quarter, plus 4% in constant currency. Second quarter, plus 6% in constant currency. And this morning, we are providing a trading update for the first five weeks of the third quarter plus 9% that reflects an acceleration of the sales. We remain confident about the year ahead, and as always, focused on increasing the differentiation of the business model.

The results that we have announced this morning demonstrate the strength of the model that, as we mentioned, in a complex environment, keeps high levels of profitability.

James O’Shaughnessy – Operator

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Thank you. That concludes the webcast questions for today.

Óscar García Maceiras - Inditex

Thank you to all of those participating in the presentation today. For any additional questions you may have, please get in touch with our Investor Relations Department, and we will welcome you back in December for the nine-month 2025 results.

(Session concluded at 9:35 a.m. CEST)

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