Zalando reported not only growth but the first full-year guidance after the acquisition of About You and a new AI-powered feed.
In the second quarter of 2025, Zalando’s gross merchandise volume (GMV) increased by 5.0 percent year-over-year to €4.1 billion, while revenues grew by 7.3 percent to €2.8 billion.
Adjusted earnings before interest and taxes reached €186 million, up from €172 million a year earlier, resulting in a stable margin of 6.5 percent.
The business-to-consumer (B2C) division of the German online fashion retailer booked a 6.1 percent rise in the number of active customers, which reached a new high of 52.9 million.
Zalando with AI-powered discovery feed
In the first week of August, Zalando launched a new AI-powered discovery feed, replacing the traditional home screen in the app. The feed will first go live in six markets, with a gradual rollout to follow.
According to Zalando, the new feed “brings together everything new and personally relevant to each customer from the Zalando world”, including curated lifestyle boards, personalised product recommendations, livestream shopping, inspirational campaign stories, and high-quality editorial content from brands and creators. For partners, the feed opens “many new opportunities to reach audiences through even more relevant organic and advertisement placements,” it added.
In the second quarter, B2C revenues rose by 6.8 percent to €2.6 billion and adjusted Ebit improved by €9 million year-over-year to €174 million.
B2B division is growing
Meanwhile, revenues from the business-to-business (B2B) division increased by 12.2 percent to €262 million, resulting in an adjusted Ebit of €11 million, up from €7 million, and the margin widening by 1.3 percentage points to 4.3 percent.
The group cut its net working capital significantly to €108 million during the quarter from €488 million a year earlier, while capital expenditure rose to €60 million from €41 million.
Zalando’s net profit rose by €1 million to €97 million in the second quarter.
The group issued its first full-year guidance including About You, whose takeover was completed on July 11.
For 2025, Zalando now expects GMV of €17.2-17.6 billion and revenues of €12.1-12.4 billion. Adjusted Ebit is forecast at between €550 million and €600 million thanks to the e-tailer’s performance in the first half of the year and expected further cost efficiencies and early synergies in the second half of the year. Zalando is targeting annual synergies of around €100 million at Ebit level from 2029 onwards thanks to the combination with About You.
Capital expenditure is seen at €200-280 million in 2025, while net working capital is forecast to remain negative, Zalando predicted.
Weaker sales outlook
On Aug. 6, Zalando repaid one of its two outstanding convertible bonds with a remaining notional of €400 million, using available cash. Zalando’s remaining cash position stands at approximately €1.2 billion, after taking into account the About You acquisition as well as the paydown of the convertible bond.
Financial analysts noted that Zalando actually cut its revenues guidance for the full year, while slightly increasing the Ebit target. The previous 2025 outlook for Zalando on a stand-alone basis was for both GMV and revenues to grow between 4 and 9 percent and adjusted Ebit to reach €530 million to €590 million.
According to Deutsche Bank, Zalando trimmed its sales guidance for 2025 to a growth of 4-7 percent following the acquisition of About You. “The picture for 2Q is not quite as good as hoped in our view,” the German bank said, adding that the second half seems hard to navigate given increased discounts and a weaker sales outlook.
