Zalando Q4 profit beats forecasts, shares surge 12% on €300 mln buyback plan

Investing.com -- Zalando shares surged more than 12% on Thursday after the European fashion platform beat fourth-quarter profit forecasts and announced a €300 million share buyback, as its acquisition of ABOUT YOU helped power a jump in active customers.

The German e-commerce group posted full-year revenue of €12.3 billion, up 16.8% year on year, fractionally below the €12.4 billion analyst consensus. Adjusted earnings before interest and tax (EBIT) reached €591 million, beating consensus of €580 million by 1.9%.

Gross merchandise value, the total value of goods sold, climbed 14.7% to €17.6 billion, topping consensus by 0.7%.

The buyback, equivalent to roughly 5% of Zalando’s market capitalisation, will be funded from the company’s cash flow. The company said it intends to cancel the repurchased shares.

"We accelerated our strategy and rolled out major innovations across B2C and B2B to deliver a strong performance in 2025," said Co-Chief Executive Robert Gentz. 

"By supercharging that foundation with AI, we are providing our customers and partners with experiences that seemed impossible just a few years ago."

Active customers rose to 62 million from 51.8 million a year earlier, boosted by the July 2025 ABOUT YOU acquisition. The business-to-business unit posted revenue growth of 14.6% to €1.1 billion, with adjusted EBIT more than doubling.

Reported net income of €213 million fell short of estimates, weighed down by €111 million in exceptional items including €57 million in acquisition costs and €43 million in restructuring charges.

Gross margins dipped around 170 basis points year on year in the fourth quarter, reflecting heavier promotional activity, loyalty-driven dilution and the ABOUT YOU consolidation effect.

For fiscal 2026, Zalando forecast GMV of €19.7-20.6 billion and revenue of €13.8-14.4 billion. Adjusted EBIT is guided at €660-740 million, with the midpoint around 3% above the €678 million analyst consensus.

The company confirmed medium-term GMV and revenue growth guidance of 5-10% through 2028, while cutting its capital expenditure-to-sales ratio target from 3% to 2%.

Barclays, which rates Zalando “overweight” with a €35 price target, said the results were "very solid" and that the buyback "should be well received by investors who have been pushing for capital returns." 

The brokerage added that Zalando looks increasingly like an "AI winner" following reports that OpenAI has scaled back its own shopping ambitions.