Zalando shares fall around 5% as margins overshadow sales beat
The online fashion retailer also introduced Zalando Extended, bringing other retailers’ products into its app, with AI-led purchasing due from 2027.
Zalando shares dropped around 5% after the European online fashion retailer reported third-quarter sales above analysts’ forecasts but a weaker gross margin. Revenue reached €3.18 billion, a 5.1% increase from a year earlier, against expectations of €3.15 billion.
Gross margin declined by 0.9 percentage points to 38.7%, missing the 39.9% analysts expected. Zalando said pricing investments, discounts and a larger contribution from its lower-margin business-to-business operations accounted for the decline. It recorded a net loss of €18 million, versus a profit of €12.5 million a year earlier.
The company’s new Zalando Extended feature puts products offered by other online retailers inside its app, including items Zalando does not sell directly. Home retailer Westwing is its first pilot partner, initially supplying larger home goods. Starting in 2027, Zalando’s AI agent will be able to buy items for customers without redirecting them to another website.
Business services, including logistics and software supplied to other brands, generated €354 million in revenue, up 27.9%. Profit for that division more than doubled, while consumer revenue grew 2.8%. Across the group, adjusted operating profit increased 10.6% to €106.5 million.
The value of merchandise sold through the platform climbed 7.5% to €4.54 billion. Active customers numbered 63.2 million, a record for the company.
Zalando left its full-year outlook unchanged, retaining a range of €680 million to €720 million for adjusted operating profit.
