Quick Summary
- Zalando shares surged more than 12% following stronger-than-expected Q4 profitability
- Annual revenue reached €12.3 billion, representing 16.8% growth compared to the prior year
- Company unveiled a €300 million share repurchase program, approximately 5% of its market capitalization
- Customer base expanded to 62 million active users from 51.8 million, significantly aided by ABOUT YOU integration
- Strategic Levi Strauss e-commerce collaboration announced spanning US, Canadian, and European markets
Zalando delivered a packed agenda on Thursday. Before midday, the German online fashion retailer released annual financial results, unveiled a €300 million share repurchase initiative, and confirmed a strategic partnership with Levi Strauss. Investors rewarded the news with a share price spike exceeding 12%.
Annual 2025 revenues totaled €12.3 billion, marking a 16.8% increase from the previous year. While marginally short of the €12.4 billion analyst projection, the miss was small enough not to dampen investor enthusiasm.
Adjusted EBIT reached €591 million, surpassing the analyst consensus of €580 million by 1.9%. Gross merchandise value — representing total platform sales volume — increased 14.7% to €17.6 billion, exceeding forecasts by 0.7%.
The buyback program captured significant attention. Worth up to €300 million, the initiative accounts for roughly 5% of Zalando’s total market valuation. Management indicated the repurchased shares will be retired, with funding coming from operational cash generation.
Barclays analysts, maintaining an “overweight” stance with a €35 target price, described the performance as “very solid” and suggested the buyback program “should be well received by investors who have been pushing for capital returns.”
Customer Base Reaches 62 Million Mark
The ABOUT YOU acquisition — finalized in July 2025 — continued influencing Zalando’s metrics. The active customer count climbed to 62 million from 51.8 million twelve months prior, with the acquisition driving much of the expansion.
The business-to-business segment delivered impressive performance. Revenue increased 14.6% to €1.1 billion, while adjusted EBIT more than doubled year-over-year.
On the negative side, reported net income of €213 million fell short of projections. The underperformance stemmed from €111 million in exceptional charges, including €57 million related to acquisition expenses and €43 million for restructuring initiatives.
Gross profit margins contracted approximately 170 basis points year-over-year during Q4, attributed to increased promotional activity, loyalty program investments, and integration impacts from ABOUT YOU.
Levi Strauss Partnership and 2026 Projections
Zalando’s technology division, Scayle, finalized an agreement with Levi Strauss. The denim giant will implement Zalando’s commerce technology platform throughout the United States, Canada, and Europe — significantly broadening Zalando’s B2B reach beyond its traditional European stronghold. J.P. Morgan analysts noted it was “very well received by investors given the profile and scale of the client.”
Looking toward 2026, Zalando projects GMV between €19.7–20.6 billion and revenue spanning €13.8–14.4 billion. This guidance implies growth of 12–17% for both metrics on a reported basis.
Adjusted EBIT guidance ranges from €660–740 million, with the midpoint sitting approximately 3% above the €678 million analyst consensus. Additionally, the company reduced its capital expenditure-to-sales ratio target from 3% down to 2%.
Zalando reaffirmed its medium-term growth targets of 5–10% for GMV and revenue through 2028. The company also announced it now anticipates €100 million in ABOUT YOU synergies by 2028 — accelerating the timeline by one year from initial projections.
Jefferies analyst Frederick Wild noted the robust conclusion to 2025 “should act as a reminder of the earnings growth Zalando has on offer.”
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