Reading a real results release: Inditex, FY2025
Open a real annual results release and pull out the five numbers that matter in ten minutes: growth, gross margin, operating margin, cash generated, and net cash.
Firm processes and online tests change from year to year and differ by office. Use this to prepare, and confirm the exact current steps on the firm's own careers page.
Key takeaways
- A results release can run to twenty pages, but five numbers tell most of the story: how fast sales grew, the gross margin, the operating margin, how much cash the business generated, and how much cash or debt it holds.
- For the economics behind these numbers, such as how stores, online sales and stock turn into margin, read the industry brief.
- The period: a financial year need not match the calendar year. Here it ends on 31 January.
- The currency and unit: EUR millions here.
- Reported or constant currency: a company selling in many countries can grow in local money and still shrink in euros.
Key idea
A results release can run to twenty pages, but five numbers tell most of the story: how fast sales grew, the gross margin, the operating margin, how much cash the business generated, and how much cash or debt it holds.
Inditex is a fashion group based and listed in Spain that owns Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Lefties. In March 2026 it published results for its financial year 2025, which ran from 1 February 2025 to 31 January 2026, in euros. All figures below come from that release on the Inditex investors page, checked 2026-10-01.
Before you read any number
- The period: a financial year need not match the calendar year. Here it ends on 31 January.
- The currency and unit: EUR millions here.
- Reported or constant currency: a company selling in many countries can grow in local money and still shrink in euros. Constant currency growth removes exchange rate moves.
- Company-defined measures: anything called "adjusted", "underlying" or "lease adjusted" follows the company's own definition. Find it before comparing.
| Line | FY2025 | FY2024 |
|---|---|---|
| Net sales | 39,864 | 38,632 |
| Gross profit | 23,222 | 22,343 |
| Operating expenses | -11,878 | -11,555 |
| EBITDA | 11,267 | 10,728 |
| EBIT (net operating profit) | 7,997 | 7,554 |
| Net profit | 6,220 | 5,877 |
| Cash flows from operating activities | 9,232 | 9,288 |
| Capital expenditure (company figure) | -2,712 | -2,672 |
| Lease payments (in financing cash flow) | -1,834 | -1,802 |
| Free cash flow, lease adjusted (company definition) | 4,686 | 4,814 |
| Net cash at year end | 10,958 | 11,495 |
Source: Inditex, FY2025 Results, consolidated statements and cash tables, checked 2026-10-01.
So-what
Profit rose while cash flow slipped a little. The five numbers below explain both.
Worked case
Pulling the five numbers that matter
The prompt
Using the Inditex table above, pull the five numbers that matter for FY2025 and say in three sentences how the year went. The release also states that sales grew 7.0 percent in constant currency, that changes in working capital used EUR 803 million of cash (against 198 million the year before), and that net cash is cash of 5,276 plus current financial investments of 5,684 minus financial debt of 2.
The structure
- How did the year go? Growth, then margins, then cash, then the balance sheet (this comes from the question: is the business growing, profitable, and turning profit into cash?)
- 1. Sales growth, reported and in constant currency
- 2. Gross margin and its change
- 3. Operating (EBIT) margin and its change
- 4. Free cash flow against net profit
- 5. Net cash
Working it through
1. 1. Sales growth
Reported growth from 38,632 to 39,864. In constant currency the company reports 7.0 percent, so exchange rates took about 4 points off.
Reported sales growth (percent):(39,864 ÷ 38,632 - 1) × 100 = 3.192. 2. Gross margin
Gross profit divided by sales: 58.3 percent, up from 57.8 percent, about 42 basis points (hundredths of a percent).
Gross margin FY2025 (percent):23,222 ÷ 39,864 × 100 = 58.253. 3. EBIT margin
EBIT divided by sales: about 20.1 percent, up from about 19.6 percent.
EBIT margin FY2025 (percent):7,997 ÷ 39,864 × 100 = 20.064. 3b. Last year's EBIT margin
For the comparison.
EBIT margin FY2024 (percent):7,554 ÷ 38,632 × 100 = 19.555. 4. Cash against profit
Lease adjusted free cash flow divided by net profit.
Free cash flow as a share of net profit (percent):4,686 ÷ 6,220 × 100 = 75.346. 5. Net cash
Cash plus current financial investments minus financial debt.
Net cash (EUR millions):5,276 + 5,684 - 2 = 10,9587. The cash link
As in the first lesson, cash on the balance sheet must tie to the cash flow statement: opening cash 6,382, a net decrease of 1,058 and an exchange rate effect of minus 48.
Closing cash and cash equivalents (EUR millions):6,382 - 1,058 - 48 = 5,276
The recommendation
Inditex had a strong, cash-rich year: sales grew 3.2 percent in euros and 7.0 percent in constant currency, the gross margin rose to about 58.3 percent and the EBIT margin to about 20.1 percent. Lease adjusted free cash flow was about EUR 4.7 billion, around three quarters of net profit, and the company ends the year with about EUR 11.0 billion of net cash and no financial debt to speak of. Two things to watch: free cash flow fell slightly because working capital used EUR 803 million and capex stayed above EUR 2.7 billion, and a stronger euro cut reported growth by about 4 points. As a next step, read the quarterly split and compare these margins with other listed fashion groups.
Inditex reported EBITDA of EUR 11,267 million on net sales of EUR 39,864 million in FY2025. What is the EBITDA margin, in percent, to one decimal place?
Inditex spent EUR 2,712 million on capital expenditure in FY2025 on sales of EUR 39,864 million. What share of sales is that, in percent, to one decimal place?
Inditex defines return on equity as net profit attributable to the parent (EUR 6,220 million) divided by the average of opening and closing equity (EUR 19,676 million and EUR 20,395 million). What is its ROE, in percent, rounded to a whole number?
Inditex's "lease adjusted" funds from operations and free cash flow take the lease payments of EUR 1,834 million off, so they are lower than the plain cash flow statement suggests. Its return on capital employed (40 percent) is profit before tax divided by average equity. Both are sensible, but neither matches a textbook definition, so say which one you are using.
For the economics behind these numbers, such as how stores, online sales and stock turn into margin, read the industry brief.
Read the luxury and fashion briefSales grew 3.2 percent in euros but 7.0 percent in constant currency. What does that tell you?
Profit rose but lease adjusted free cash flow fell slightly. Which explanation fits the release?
Facts checked against sources on 2026-10-01. Sources, company filings and standard setters first.
- Inditex: FY2025 Results (1 February 2025 to 31 January 2026), results release with consolidated income statement, balance sheet and cash flow statement: https://www.inditex.com/itxcomweb/api/media/1da2c9d1-dbca-49fb-9563-982a8a27fae6/INDITEXFullYear2025.pdf
- Inditex: investors page (results, presentations and annual accounts): https://www.inditex.com/itxcomweb/en/investors
Sources for this lesson (3)
- Inditex: FY2025 Results (1 February 2025 to 31 January 2026), results release with consolidated income statement, balance sheet and cash flow statement
- Inditex: investors page (results, presentations and annual accounts)
- Recognized public explanations of case-interview concepts and terms
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