TLDR
- Zalando shares surged more than 12% following better-than-expected Q4 profitability
- Annual revenue reached €12.3 billion, representing a 16.8% increase compared to the previous year
- The company unveiled a €300 million share repurchase program, approximately 5% of its market capitalization
- The customer base expanded to 62 million active users from 51.8 million, driven by the ABOUT YOU integration
- Zalando announced a strategic e-commerce partnership with Levi Strauss spanning the US, Canada, and European markets
Zalando delivered a triple announcement on Thursday that sent its stock soaring. The German online fashion retailer published its annual results, unveiled a substantial buyback program, and confirmed a major partnership with Levi Strauss—all within a single morning session. Shares responded with a surge exceeding 12%.
Annual revenue for 2025 totaled €12.3 billion, marking a 16.8% year-over-year increase. While this figure came in slightly under the €12.4 billion consensus forecast from analysts, the minor variance didn’t dampen investor enthusiasm.
Adjusted EBIT reached €591 million, surpassing the €580 million consensus estimate by 1.9%. The platform’s gross merchandise value—representing the total worth of products sold—increased 14.7% to €17.6 billion, exceeding projections by 0.7%.
The share repurchase announcement captured significant attention. Worth up to €300 million, the program amounts to roughly 5% of Zalando’s total market capitalization. Management stated the repurchased shares will be retired, with funding coming entirely from internal cash generation.
Barclays analysts, who maintain an “overweight” rating with a €35 price target, characterized the results as “very solid” and predicted the buyback “should be well received by investors who have been pushing for capital returns.”
Customer Base Reaches 62 Million
The integration of ABOUT YOU—finalized in July 2025—continued to transform Zalando’s operational metrics. The active customer count climbed to 62 million from 51.8 million in the prior year, with the acquisition contributing substantially to this growth.
The company’s B2B division delivered impressive performance. Revenue increased 14.6% to €1.1 billion, while adjusted EBIT more than doubled compared to the previous period.
However, reported net income of €213 million fell short of expectations. This gap stemmed from €111 million in exceptional charges, including €57 million related to acquisition expenses and €43 million in restructuring costs.
Gross profit margins contracted approximately 170 basis points year-over-year in Q4, attributed to increased promotional activity, loyalty program investments, and the consolidation impact of ABOUT YOU.
Levi’s Partnership and 2026 Guidance
Zalando’s technology division, Scayle, finalized an agreement with Levi Strauss. The denim giant will implement Zalando’s commerce platform throughout the US, Canada, and Europe—a strategic expansion that significantly broadens Zalando’s B2B presence beyond German borders. J.P. Morgan analysts noted it was “very well received by investors given the profile and scale of the client.”
Looking ahead to 2026, Zalando projects GMV between €19.7–20.6 billion and revenue ranging from €13.8–14.4 billion. These targets indicate GMV and revenue expansion of 12–17% on a reported basis.
Adjusted EBIT is expected to fall between €660–740 million, with the midpoint approximately 3% above the €678 million analyst consensus. The company also reduced its capital expenditure-to-sales ratio target from 3% to 2%.
Zalando reaffirmed its medium-term projections for 5–10% GMV and revenue growth through 2028. Management also announced it now anticipates €100 million in synergies from the ABOUT YOU acquisition by 2028—accelerating the timeline by one year from initial estimates.
Jefferies analyst Frederick Wild said the strong end to 2025 “should act as a reminder of the earnings growth Zalando has on offer.”
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