Zalando Q2 Earnings Call Highlights

Zalando ETR: ZAL said its second-quarter results kept the company on track for its 2026 profit targets, although it narrowed its full-year growth outlook to the lower half of its prior range after softer demand in sneakers weighed on first-half performance.

Co-CEO Robert Gentz said the company carried momentum from 2025 into the first half of 2026, citing progress in its multi-app consumer strategy, B2B operations, and artificial-intelligence initiatives. On a reported basis, first-half gross merchandise volume, or GMV, rose 21%, revenue increased 22.2%, and adjusted EBIT grew 16.1% to €270 million. On a pro forma basis, assuming ABOUT YOU had been consolidated in the prior-year period, group GMV growth was in the mid-single digits.

“Our solid Q2 performance confirms that we're on track to meet our full-year targets,” Gentz said, while acknowledging that top-line growth “fell a little short” of the company’s ambitions because of softer sneaker demand.

In the second quarter, group GMV increased 4.4% on a pro forma basis to €4.9 billion. Revenue rose 1.1% pro forma, while adjusted EBIT increased 10% year over year to €205 million. The group adjusted EBIT margin was 6%, down from 6.5% a year earlier, which CFO Anna Dimitrova attributed entirely to the first-time consolidation of ABOUT YOU, which currently operates at a lower margin.

The company now expects reported GMV and revenue growth for 2026 in the lower half of its previous 12% to 17% range. It narrowed adjusted EBIT guidance to between €680 million and €720 million and said it has increased confidence in reaching the midpoint of that range. Dimitrova said the outlook is supported by expected benefits from the reshaping of Zalando’s logistics network, operational efficiencies, synergy delivery from the ABOUT YOU integration, and disciplined autumn/winter inventory purchasing. She added that the company expects to remain in the mid-single-digit GMV growth range in the third quarter.

Management said the second-half top-line acceleration implied by its outlook will depend partly on measures intended to strengthen retail performance. “No accounting measures. It’s a real growth,” Dimitrova said in response to an analyst question about the revenue outlook.

Executives identified broad-based softness in lifestyle sneakers as a key factor affecting demand. Dimitrova said the sneaker business represents a low-double-digit percentage of total GMV. She said the company did not choose to push more sneakers into the market through higher marketing spending or discounts, instead prioritizing profitable growth. Zalando does not expect a near-term turnaround in sneaker demand, though management expects another sneaker cycle to emerge over time. Dimitrova said the category is characterized by substantial in-season purchasing, allowing the company to adjust buying decisions based on customer demand, wish lists, price points, brands, and product categories.

The weakness was focused on sneakers rather than footwear broadly, she said, adding that Zalando has seen developments in other categories including sandals and pumps. Inventory excluding ABOUT YOU rose 3.9% year over year in the second quarter, as Zalando reduced older inventory while bringing in stock for the new season. The company said it plans for inventory to decline year over year by the end of 2026 and is aligning purchases with growth in its partner business.

Zalando’s B2C GMV rose 20.7% on a reported basis and 4.4% pro forma. B2C revenue reached €3.1 billion, down 0.6% pro forma. The company said the revenue development reflected both softer sneaker demand and its shift toward a platform-led model, where partner sales increase GMV but revenue is li...