El Corte Inglés posts 22.8% profit rise, debt at 20-year low

El Corte Inglés boosts profits by 22.8% and cuts debt to a twenty-year low

Just a couple of years ago, obituaries for the Spanish department store giant wrote themselves. Relentless online competition, changing habits, an aging customer base… according to conventional wisdom, it was the perfect recipe for disaster. But the accounts for fiscal year 2025-26 tell a different story: a net profit of €628 million, up 22.8% from the previous year; debt at a twenty-year minimum; and a turnover of €14.988 billion, supported by resilient consumer spending.

What is the key to its resurgence?

El Corte Inglés hasn't done anything revolutionary. It has refused to 'El Corte Fiel' itself, as industry jargon puts it: it hasn't cut service or quality to compete on low cost. And that difference shows. Customer service, return policies, electronics warranties, and the famous old furniture collection service are weapons that online retailers still haven't matched. Moreover, the supermarket has become a magnet: with periodic offers and stackable discounts, a shopping alucinación can cost the same as at Mercadona, but with branded products and a fresh food section many consider superior. "The best supermarket in Spain," say loyal customers.

The typical customer: wealthy baby boomers

The profile of the regular shopper generates some controversy. The bulk of the clientele consists of retirees with high purchasing power, owners of several rental properties, who frequent the stores during working hours. They are the same people who can pay €300 for a shirt, although there are also those who take advantage of sales to dress at market prices. But it's not all textiles: the group's credit card is the largest non-bank issuer in Spain, suggesting that consumer financing —with attractive rates— acts as commercial glue.

The unseen business: shadow banking

Less well known is El Corte Inglés's financial arm, which manages a massive consumer credit portfolio. Payment facilities, interest-free months, and a network of financial branches within the stores themselves. This business, often ignored by analysts who only look at retail, has helped stabilize margins. Traditional banks, meanwhile, watch this competitor warily, one that doesn't need to gather deposits to lend.

The myth of imminent bankruptcy

They had been writing its death sentence for years. Every fiscal year brought up the question of whether El Corte Inglés would survive another year. And every year, the results disproved the doomsayers. With this report, net debt sits at its lowest level since 2005, providing room for investment or even a rumored potential stock market listing. The company has shown that a traditional department store model, well executed, can survive —and even thrive— in the age of Amazon.

The data that confounds apocalypse prophets

While economic forums had been announcing the end for years, the reality is that profits have grown by 22.8% and debt has been reduced to a two-decade minimum. The uncomfortable question for those who assumed collapse is: what if the department store model, with service, wide assortment, and own financing, still has more runway than previously thought?