Key Highlights
- Zalando shares surged more than 12% following better-than-expected Q4 profitability
- Annual revenue reached €12.3 billion, marking a 16.8% increase versus the prior year
- The company unveiled a €300 million share repurchase program representing approximately 5% of its market capitalization
- Platform users expanded to 62 million from 51.8 million, driven significantly by the ABOUT YOU integration
- Strategic partnership with Levi Strauss announced for e-commerce operations in North America and Europe
Zalando delivered a packed agenda on Thursday. The Berlin-based online fashion retailer published annual financials, unveiled a substantial share buyback initiative, and confirmed a strategic collaboration with Levi Strauss — all in a single morning session. Investors rewarded the news flow with a stock price surge exceeding 12%.
Annual 2025 revenues landed at €12.3 billion, representing a 16.8% year-over-year expansion. While this figure came marginally short of the €12.4 billion Street expectation, the minor variance appeared to have minimal impact on market sentiment.
Adjusted operating income (EBIT) reached €591 million, exceeding the €580 million consensus forecast by 1.9%. Gross merchandise volume — representing total transaction value across the platform — increased 14.7% to €17.6 billion, outperforming projections by 0.7%.
The share repurchase program captured significant attention. Capped at €300 million, the buyback equals roughly 5% of Zalando’s current market valuation. Management confirmed plans to retire the acquired shares, financing the program through operating cash generation.
Barclays, maintaining an “overweight” stance with a €35 price objective, characterized the performance as “very solid” and noted the buyback “should be well received by investors who have been pushing for capital returns.”
User Base Expands to 62 Million
The ABOUT YOU transaction — finalized in July 2025 — continued to influence Zalando’s operational metrics. Active platform users climbed to 62 million from 51.8 million in the comparable period, with the acquisition accounting for much of this expansion.
The business-to-business segment delivered impressive results. Revenue advanced 14.6% to €1.1 billion, while adjusted EBIT more than doubled year over year.
However, reported net earnings of €213 million fell below analyst projections. The variance stemmed from €111 million in one-time charges, encompassing €57 million in deal-related expenses and €43 million in reorganization costs.
Gross profit margins contracted approximately 170 basis points year over year during Q4, attributed to intensified promotional activity, loyalty program investments, and the ABOUT YOU consolidation impact.
Levi’s Partnership and Forward Guidance
Zalando’s technology division, Scayle, finalized an agreement with Levi Strauss. The denim manufacturer will deploy Zalando’s commerce infrastructure throughout the US, Canada, and European markets — significantly extending Zalando’s B2B reach beyond its traditional geography. J.P. Morgan characterized the announcement as “very well received by investors given the profile and scale of the client.”
Looking to 2026, Zalando projects GMV between €19.7–20.6 billion and revenue spanning €13.8–14.4 billion. These targets translate to reported GMV and revenue expansion of 12–17%.
Adjusted EBIT guidance sits at €660–740 million, with the midpoint approximately 3% above the €678 million analyst consensus. The company simultaneously reduced its capital expenditure-to-sales ratio target from 3% to 2%.
Zalando reaffirmed medium-term GMV and revenue growth projections of 5–10% extending through 2028. Management also accelerated expected ABOUT YOU synergy realization to €100 million by 2028 — one year ahead of the initial timeline.
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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