Zalando (ETR:ZAL) said third-quarter momentum improved as gross merchandise volume, revenue and adjusted earnings increased, supported by growth in its partner business, retail media and business-to-business operations. The company reaffirmed its full-year 2026 guidance and said it was preparing for the peak Cyber Week and Christmas trading period.
Chief Financial Officer Anna Dimitrova said reported GMV rose 7.5% year over year in the third quarter, while group revenue increased 5.1%. On a pro forma basis, which assumes full ownership of ABOUT YOU in the prior-year period, GMV increased 6.1% to €4.5 billion and revenue rose 3.3% to €3.2 billion.
Adjusted EBIT increased 11% to €107 million, lifting the adjusted EBIT margin to 3.4% from 3.2% a year earlier. Dimitrova said lower fulfillment costs, integration synergies and B2B growth supported profitability, although customer offers and higher marketing spending partly offset those gains.
Platform shift weighs on B2C revenue growth
The company’s B2C segment recorded pro forma GMV growth of 6.1%, while revenue rose 0.9% to €2.8 billion. GMV increased across the Zalando, ABOUT YOU and Lounge by Zalando consumer apps.
Zalando said the difference between GMV and revenue growth reflected the increasing mix of partner sales. GMV includes the full value of goods sold through the platform, while Zalando records only commissions as revenue on partner sales. Partner share increased by 2.9 percentage points to 33.6%, advancing the company toward its 2028 target range of 40% to 50%.
Retail media revenue increased nearly 18% and represented 2% of B2C GMV in the quarter. Zalando Plus, the company’s loyalty program, surpassed 22 million members. Dimitrova said Plus members were ordering more frequently and contributing to higher customer lifetime value.
Active customers increased 2.9% over the trailing 12 months to 62.2 million, including an increase of more than 600,000 customers from the previous quarter. Average spend per customer rose 2.9% to €308, driven mainly by larger basket sizes as customers shopped across more categories.
B2C adjusted EBIT, however, declined to €64.4 million from €76.6 million a year earlier, while the segment’s adjusted EBIT margin fell to 2.3% from 2.8%. The B2C gross margin declined 0.7 percentage points to 41%, reflecting targeted offers in the retail business, particularly in sneakers, and earlier marketing spending for autumn and winter campaigns.
Dimitrova described the gross-margin effect as temporary and said the company expects improvement in the fourth quarter and broadly flat gross margin for the full year. She said Zalando had used third-quarter end-of-season sales to reduce older inventory and entered the autumn-winter season with what it considers a healthy inventory position.
B2B revenue and margins accelerate
The B2B segment continued to be a major source of growth. Pro forma B2B revenue rose 27.2% to €354 million, while adjusted EBIT more than doubled to €42 million. The segment’s adjusted EBIT margin expanded to 11.9% from 7.1% in the prior-year quarter.
Dimitrova attributed the result to fulfillment scale, improving shipping and packaging economics, and higher-margin software revenues from SCAYLE and Tradebyte. She said the company expects B2B margins to settle around 9% to 10% going forward, after some temporary benefits in recent quarters level out.
ZEOS Fulfilment added customers including Lascana, LC Waikiki and Champion. SCAYLE secured enterprise customers in the U.S. and U.K., including Neighborhood Intelligence, Rue Gilt Groupe and N Brown Group. Zalando also cited its strategic fulfillment relationships with Next and Marks & Spencer, which launched in 22 markets in August.
AI commerce initiatives broaden
Zalando highlighted its agentic-commerce efforts, including its Zalando Assistant shopping tool. More than 22 million unique users visited the assistant during the year, according to Dimitrova. Monthly active users increased fivefold from last year, while add-to-basket actions increased sevenfold. Customers using the assistant during their shopping journey were twice as likely to complete a purchase, she said.
The company also piloted ChatGPT ads in the U.K. and became a launch partner for Google’s Universal Commerce Protocol in that market. Dimitrova said agentic traffic remained below 1% of total traffic but was increasing.
Zalando is also piloting “Zalando Extended,” an outbound agentic-commerce offering that will allow customers to find products from other online stores without leaving the Zalando app. Westwing is the launch partner. Customers in selected markets can currently find Westwing products in Zalando search results and are redirected to Westwing’s site to purchase. Beginning in 2027, Zalando expects customers to be able to complete those purchases directly in its app through its AI agent.
Guidance maintained
For 2026, Zalando reiterated expectations for reported GMV and revenue growth in the lower half of its 12% to 17% range. The company continues to expect adjusted EBIT of €680 million to €720 million, capital expenditures of €240 million to €300 million, and a negative net working capital position.
For the first nine months, reported GMV rose 16.2%, reported revenue increased 16%, and adjusted EBIT rose 14.5% to €376 million. The company said it remains confident it can reach the midpoint of its full-year adjusted EBIT guidance.
Zalando ended the third quarter with €1.2 billion in cash and cash equivalents, compared with €1.4 billion at the end of the second quarter. Negative working capital improved to €424 million from €141 million in the prior-year period, supported by higher trade payables linked to the growing partner business.
About Zalando (ETR:ZAL)
Zalando SE operates an online platform for fashion and lifestyle products. The company operates through Fashion Store and Offprice segments. It provides shoes, apparel, accessories, and beauty products with free delivery and returns, as well as various payment options. The company also sells its products through Lounge by Zalando; and brick-and-mortar outlet stores. It operates in Germany, Austria, Switzerland, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, Hungary, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.
