Zalando (ZAL) Q4 2025 (Q&A) earnings summary

Executive summary

• Delivered strong 2025 results with double-digit growth in GMV, revenue, and profit, reaching the high end of updated guidance following the ABOUT YOU acquisition and accelerated strategy execution.

• Achieved 16.8% year-over-year revenue growth and 14.7% GMV growth, with active customers surpassing 62 million (+19.7% YoY).

• Accelerated AI-driven innovations across data, infrastructure, and customer experience, enhancing operational efficiency and engagement.

• Announced a capital allocation framework, including a share buy-back of up to €300 million, reflecting confidence in future earnings and capital discipline.

• Confident start to 2026, aiming to accelerate performance further in both strategy and financials.

Financial highlights

• Group revenue reached €12.3 billion (+16.8% YoY), GMV at €17.6 billion (+14.7% YoY), and adjusted EBIT at €591 million (+15.6% YoY).

• B2C revenue grew 16.8% YoY to €11.3 billion, with adjusted EBIT of €536 million (+9.6% YoY); B2B revenue increased 14.6% YoY to €1.1 billion, with adjusted EBIT up 136.5% to €54 million.

• Free cash flow before M&A reached roughly EUR 700 million in 2025; expected to remain at similar levels through 2028.

• Retail media and B2B segments (including SCAYLE) are delivering double-digit growth and high margins, supporting group profitability.

• Retail gross margin saw a 170 basis point decline in Q4, mainly due to increased promotions and business mix; group gross margin declined to 39.9% (from 40.7%), offset by OPEX efficiencies.

Outlook and guidance

• 2026 guidance: GMV €19.7–20.6 billion (+12–17% YoY), revenue €13.8–14.4 billion (+12–17% YoY), adjusted EBIT €660–740 million.

• Midterm guidance targets 6%-8% EBIT margin by 2028, supported by operational efficiencies and logistics optimization.

• B2C gross margin for 2026 expected to benefit from high-margin partner and retail media businesses, with some dilution from About You and Lounge.

• Capex expected at €240–300 million, with net working capital remaining negative.

• No material impact from Middle East conflict on demand or business performance so far; outlook excludes potential impact from a prolonged conflict.