Zalando (ETR:ZAL) used its annual press conference and business update to outline what management described as a year of accelerated strategic execution in 2025, supported by the acquisition of ABOUT YOU, growing adoption of AI-driven tools, and continued scaling of its B2B platform. Co-CEOs Robert Gentz and David Schröder and new CFO Anna Dimitrova also provided guidance for 2026, reiterated medium-term targets through 2028, and announced a new capital allocation framework that includes a share buyback of up to EUR 300 million.
2025 results: growth acceleration and higher profitability
Management said the group delivered “strong double-digit growth” in 2025, with revenue up nearly 17% and adjusted EBIT rising to EUR 591 million. Gentz highlighted that performance was “fueled” by strategy execution and the inclusion of ABOUT YOU following the transaction’s closing in July 2025.
In B2C, the company reported over EUR 17.5 billion in GMV and more than EUR 540 million in adjusted EBIT for the combined Zalando and ABOUT YOU businesses. Dimitrova provided additional customer metrics, including an average basket size increase of 3% to EUR 62.8 and GMV per active customer of about EUR 303, up 2.3% year-over-year, while average orders per active customer remained roughly stable at 4.8.
Gross profit in B2C increased 13.6% to EUR 4.8 billion, with a 42.3% gross margin, down 1.2 percentage points versus 2024. Dimitrova attributed the margin decline primarily to mix effects, including strong performance at Lounge by Zalando (which she said has a structurally lower margin profile), a deliberate expansion of more value-oriented offers, and the inclusion of ABOUT YOU, which she said has a lower margin profile than the Zalando B2C business.
ABOUT YOU integration and synergy outlook
Executives repeatedly pointed to the ABOUT YOU acquisition as both a growth driver and an integration priority. Gentz said the deal “fundamentally strengthened” Zalando’s long-term growth potential, while Dimitrova said the company made “exceptional progress” on synergies after the deal closed in July 2025.
Dimitrova said Zalando exceeded its 2025 synergy targets, delivering EUR 10 million, which she characterized as 20% of a EUR 100 million run-rate on a full-year basis. She added the company now expects to realize the full EUR 100 million in synergies in 2028, “a year early.”
On profitability, Dimitrova said ABOUT YOU was break-even for the reported period after including the EUR 10 million in initial synergies. She also said the company expects total synergy capture to accelerate to around EUR 40 million in 2026, driven mainly by commercial synergies such as improved trade terms, sharing photos and videos for overlapping assortment, and procurement collaborations across transportation, marketing, and media buying. Logistics and payment synergies were described as more back-end loaded.
AI emphasis: efficiency, growth, and “agentic commerce”
Management positioned AI as a core catalyst across both the customer-facing B2C business and the company’s platform services for partners. Schröder said Zalando’s business is powered by a shared data and infrastructure engine “supercharged by AI,” while Gentz argued the pace of change enabled by AI is compressing development timelines across the organization.
Gentz gave several examples of AI’s impact on efficiency, including that 90% of product marketing content in Zalando’s apps is now made by AI, compared with close to zero a year earlier. He said campaign production cycles have moved from about six weeks to “days,” while campaign content increased 70% without increasing overall content investment. He also said Zalando improved the precision of real-time delivery promises by 22 percentage points in one year through AI model advancements, and noted that internal teams are seeing “over 20%” more code changes using AI coding tools.
On growth, Gentz said Zalando’s matchmaking models increased the precision of recommendations, resulting in 13% more items added to bags and wish lists. He also cited size-and-fit initiatives, saying Zalando has real body measurements from over 1 million customers, with more than 20,000 customers scanning and submitting measurements each week. He said these solutions have reduced size-related returns by more than 8%.
Management also discussed the company’s AI-driven assistant, which Gentz said now has 6 million people engaging with it, “4 times more than last year,” and includes features that enable users to add items to their bag and proceed to checkout from within the assistant. He said Zalando is testing more personalization and longer memory features and described plans for a more capable “lifestyle companion.”
Separately, Gentz highlighted “agentic commerce” as an emerging channel, citing estimates that it could represent 15% of the e-commerce market by 2030. He said Zalando is one of two European companies participating as initial launch partners for Google’s Universal Commerce Protocol, which he described as setting standards for agentic commerce in Europe.
B2C: multi-app strategy, loyalty, and retail media growth
Gentz described a multi-app approach across Zalando, ABOUT YOU, and Zalando Lounge, with the apps sharing a common infrastructure for logistics and payments while targeting different customer value propositions. Dimitrova said 62 million people ordered at least one package from Zalando or ABOUT YOU in 2025, representing 15% of the European population, and noted that about 6 million customers currently use both platforms.
Management also emphasized customer engagement initiatives in the core Zalando app, including an AI-powered feed. Gentz said that since the full launch in January, more than 25 million unique users have interacted with the feed, with more than 9 million weekly users and 5 million daily users.
The loyalty program, Zalando Plus, remained a central growth lever. Gentz said the program reached more than 16.8 million members and accounted for nearly half of Zalando’s GMV in Q4, about 18 months after launch. Dimitrova added that in Q4, the number of Plus customers increased by 25% to over 16 million across 17 markets, and said Plus members order and spend more than non-members.
In retail media, management reported a sharp acceleration. Gentz said the retail media business combining Zalando and ABOUT YOU grew 42% in 2025, up from 12% growth in 2024, driven mainly by Zalando Marketing Services. Retail media revenue reached 1.8% of GMV, and executives pointed to AI-driven optimization and self-service tooling as contributors.
B2B scaling: ZEOS, SCAYLE, and enterprise partnerships
Zalando’s B2B business was presented as a key growth and margin expansion opportunity, built around logistics and software offerings including ZEOS, SCAYLE, and Tradebyte. Gentz said the B2B segment produced over EUR 1 billion in revenue in 2025, up 13.6% year-over-year, and “more than doubled” adjusted EBIT.
Dimitrova said B2B revenue growth was sustained at double-digit levels, citing ZEOS Fulfillment as the primary driver. She said the company served more than 70 merchants across 18 channels and shipped five times more items than in 2024. She also said Marks & Spencer will be added as another large enterprise customer.
On software, management emphasized SCAYLE’s contribution. Dimitrova said SCAYLE delivered double-digit revenue growth in 2025 driven by subscriptions and go-live fees. She added that software’s share of B2B revenue increased to 7% in 2025 from 5% in 2024 (including SCAYLE), while ZEOS still accounts for more than 90% of B2B revenue.
In terms of profitability, Dimitrova said B2B gross margin expanded 3.4 percentage points to 15%, and adjusted EBIT more than doubled to nearly EUR 54 million, bringing the adjusted EBIT margin to 4.9%. She attributed the margin expansion to increased scale and efficiency in fulfillment and the contribution of higher-margin software revenues.
Schröder also highlighted enterprise partnerships, including a case study with Next, which he said achieved a 33% increase in international online sales and a 6.5% reduction in fulfillment costs by leveraging Zalando’s logistics backbone. He also announced an expanded partnership with Levi’s, stating Levi’s selected SCAYLE to power its global direct-to-consumer business across Europe and North America, making it SCAYLE’s first enterprise partner for the North American market.
2026 guidance, 2028 targets, and capital returns
For 2026, management guided to GMV and revenue growth of 12% to 17% year-over-year, citing the full-year inclusion of ABOUT YOU, continued B2C customer growth and share-of-wallet gains, and further scaling of B2B logistics and software. The company expects adjusted EBIT of EUR 660 million to EUR 740 million and CapEx of EUR 240 million to EUR 300 million, with net working capital remaining negative.
Zalando reiterated its midterm targets for 2028, translated for the combined group after the ABOUT YOU acquisition. Management guided to a reported CAGR of 8% to 13% for GMV and revenue from 2023 to 2028 and reaffirmed a 6% to 8% adjusted EBIT margin target in 2028, alongside “strong free cash flow.”
Executives also introduced a capital allocation framework with three stated priorities:
- Maintain liquidity equivalent to 10% of last twelve months’ revenue.
- Prioritize organic investment, with selective M&A subject to ROI hurdles.
- Return excess cash through opportunistic share buybacks when value-accretive.
As part of the framework, the company announced a share buyback program of up to EUR 300 million. Dimitrova said the shares bought back will be canceled to reduce shares outstanding, and she characterized the move as reflecting management’s view that the shares are trading below intrinsic value.
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.
