Inditex reaches luxury-level profitability&targets record marginIndustria de Diseno Textil, S.A.BME_DLY:ITXActivTrades By Ion Jauregui – Analyst at ActivTrades Inditex has consolidated its position as one of the most profitable groups in the global textile sector, achieving a net margin of 15.6% in 2025, outperforming direct competitors such as H&M and Gap, and even surpassing luxury giants like LVMH and Kering. The group reported revenues of €39.864 billion and net profit of €6.22 billion, driven by a strategy focused on cost control and a gradual shift toward more premium segments. This approach has enabled the company to expand margins in an environment marked by competitive pressure from low-cost platforms such as Shein and Temu. At an operational level, Inditex maintains record-high ratios, with an EBITDA margin of 28.2% and an EBIT margin of 20.1%, reflecting sustained improvements in efficiency and pricing power. Market consensus expects stability in 2026, with potential net margin expansion to 15.9% by 2028. In contrast, the luxury sector is showing signs of slowdown, with recent declines in revenues and profits among some of its key players, affected by weaker demand in Asia. In equity markets, Inditex shares remain close to all-time highs, trading around €49.24 at the open, within a long-term bullish structure that remains intact for now. From a technical perspective, the price has undergone a controlled correction after reaching highs, pulling back toward the value area or point of control around €48. This level coincides with a key support zone, previously a consolidation range and the base of the latest bullish leg. Holding this level is crucial to maintaining the broader positive structure. In terms of moving averages, the recent short-term bearish crossover (50-day moving average falling below the 100-day) should be interpreted as a technical adjustment following the March 11 earnings release, more related to profit-taking than to any structural deterioration. However, the price has temporarily broken below the 200-day moving average, introducing an element of tactical weakness. That said, momentum indicators such as RSI and MACD are in oversold territory, suggesting selling pressure may be exhausted and opening the door to potential technical rebounds. This behavior is further confirmed by the ActivTrades Europe Market Pulse indicator, which signals an Extreme Risk-off environment. This reflects broader risk aversion across European markets, driven by macro factors such as geopolitical tensions in the Middle East and rising oil prices, which have triggered sustained institutional outflows over recent sessions. In this context, as long as the €48 level holds as support, the underlying bias remains constructive. A bullish reactivation signal would be confirmed by a sustained recovery above the 200-day moving average, accompanied by increased volume, potentially paving the way for a renewed attempt at all-time highs. Recent performance reinforces Inditex’s positioning as a hybrid player between fast fashion and luxury, with the capacity to sustain profitable growth in an uncertain macroeconomic environment. ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance and forecasting are not a synonym of a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Political risk is unpredictable. Central bank actions can vary. Platform tools do not guarantee success.