Zalando ETR: ZAL told shareholders that its strategy is delivering stronger financial results, even as management acknowledged dissatisfaction with the company’s share price performance.
Speaking at the company’s shareholder meeting, management said the current share price “does not reflect Zalando’s true value and enormous potential,” adding that the company “fully” shares investor frustration. The company pointed to progress in artificial intelligence, the integration of ABOUT YOU, growth in both its consumer and business-to-business operations, and share buybacks as key elements of its plan to create long-term shareholder value.
2025 Results and 2026 Outlook
Zalando reported that 2025 revenue rose almost 17% to 12.3 billion euros, while operating profit reached 591 million euros. In its B2C segment, which includes Zalando, ABOUT YOU and Lounge by Zalando, gross merchandise volume rose to 17.6 billion euros, with operating profit of 536 million euros.
The company said its B2B segment also grew, with revenue rising almost 15% to 1.1 billion euros. Operating profit in the segment more than doubled, which management said demonstrated the profitability of its partner-facing operating system.
For 2026, Zalando said it expects gross merchandise volume and revenue growth of 12% to 17% compared with 2025. The company forecast adjusted earnings before interest and taxes of 660 million euros to 740 million euros.
First-quarter 2026 figures showed continued momentum, according to management. GMV rose 21.7% to 4.3 billion euros, revenue increased 23.8% to 3 billion euros, and operating profit rose 38.7% to 65 million euros, corresponding to a 2.2% margin. Zalando said the current geopolitical environment had not yet affected its business, though it continues to monitor conditions closely.
AI Positioned as a Growth Driver
Management described artificial intelligence as a major value driver across Zalando’s business, citing the company’s fashion-specific data, logistics network and technology platform as competitive advantages. Zalando said it connects 62 million customers with 7,000 brands across 29 markets and processes more than 34 billion euros in annual transaction volume through its payment platform.
The company highlighted several examples of AI adoption. It said the share of AI-generated product content increased from almost zero to 90% within one year, while campaign creation now takes a few days rather than six weeks. Zalando also said it is producing 70% more content.
In logistics, AI models increased the accuracy of delivery promises by 22 percentage points in real time, according to management. Among its approximately 3,000 tech specialists, AI-assisted programming has helped increase the average number of code changes by more than 20%.
Zalando also said it is working on “agentic commerce,” where AI agents assist with search, product selection and purchases. The company said it is one of two European launch partners for Google in agentic commerce. Its Zalando Assistant had 10 million users in the first quarter of 2026, compared with 6 million users during all of 2025.
B2C Growth Through Apps, Loyalty and Engagement
In its consumer business, Zalando said its portfolio of apps is designed to address different customer needs: the brand-focused Zalando app, the trend-focused ABOUT YOU app and the deal-focused Lounge by Zalando app. Management said the apps share the same data, infrastructure, logistics and payments capabilities.
The company said it measures progress through reach, frequency of use and penetration. Zalando Plus, its loyalty program, had 18.5 million members across 17 markets in the first quarter of 2026. Management said Plus members order more frequently than other customers and accounted for almost 50% of GMV in the fourth quarter of 2025, 18 months after launch.
Zalando also pointed to engagement gains from its Discovery Feed, which has been used by more than 25 million people since launching in January. The company said retail media revenue at Zalando and ABOUT YOU grew 42% in 2025 and represented 1.8% of GMV.
Management said Zalando is also increasing customer spending across categories. It reported 30% growth last year in areas such as beauty, designer fashion and sport. The partner business now accounts for 32% of GMV.
B2B Platform Expands With ZEOS, SCAYLE and Tradebyte
Zalando said its B2B business is built around three main offerings: ZEOS for logistics and returns across Europe, SCAYLE for online shops and marketplaces, and Tradebyte, which connects brands to more than 90 marketplaces globally through a single integration.
More than 1,200 partners are using Zalando’s B2B offering, the company said. Of the 11 billion euros in GMV it processes today, 35% comes from channels outside Zalando. Management said margins can increase through cross-selling and upselling, with Zalando’s share per transaction rising up to 40% when partners use its full set of logistics and software modules.
The company cited British retailer NEXT as an example of its B2B impact. Zalando said NEXT uses its logistics network to supply continental Europe and has pooled inventory across next.com, Zalando and other marketplaces. According to management, NEXT’s international online revenue rose 33%, while logistics costs fell 6.5%.
Zalando also said SCAYLE will become the global e-commerce platform for Levi’s in Europe and North America, describing the agreement as a milestone and a reference project in the U.S. market.
Capital Allocation and Sustainability
Zalando said it plans to carry forward retained earnings for the 2025 financial year in full. Management outlined three capital allocation priorities: maintaining a liquidity reserve of about 10% of revenue, investing in growth and selective acquisitions, and returning surplus capital through share buybacks.
The company referenced a share buyback program of up to 300 million euros, which it said would repurchase around 5% of share capital.
Zalando also reiterated sustainability targets. The company aims to be climate neutral in its own operations and private labels by 2040 and across its full supply chain by 2050. In 2025, Zalando said it had reduced emissions in its own operations by 81% since 2017 and cut CO2 emissions from private labels by 37% since 2018.
Management said the combination of AI, data, logistics and partner services positions Zalando to continue growing in Europe’s fashion market while investing in long-term value creation for shareholders.
About Zalando ETR: ZAL
Zalando SE operates an online platform for fashion and lifestyle products. The company operates through Fashion Store and Offprice segments. It provides shoes, apparel, accessories, and beauty products with free delivery and returns, as well as various payment options. The company also sells its products through Lounge by Zalando; and brick-and-mortar outlet stores. It operates in Germany, Austria, Switzerland, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, Hungary, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.
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