Retailer Zalando Narrows Profit Outlook, Sees Growth at Lower End of Range

European online fashion giant Zalando has tempered expectations for its 2026 financial performance, announcing Tuesday that it now anticipates revenue and gross merchandise volume (GMV) growth to land in the lower half of its previously guided range. The company also narrowed its adjusted operating profit outlook, a move that sent its shares down 9% in pre-open trade in Frankfurt.

The Berlin-based retailer stated that this revised forecast primarily reflects its first-half performance and does not indicate a change in expectations for the remainder of the year. Zalando now expects annual GMV and revenue growth to be in the lower half of its prior 12% to 17% range on a reported basis, aligning with market expectations. "Zalando shares had a good run. Cut of GMV outlook will not help today even though market expected a cut," commented a local trader.

Despite the cautious outlook, Zalando's second-quarter results showed resilience. GMV grew 20.7% year-on-year to €4.9 billion, aided by rapidly expanding AI capabilities. Quarterly adjusted EBIT increased 10% to €205 million, with over €10 million in synergies realized from the acquisition of About You. The company is continuing its investments in customer offerings, AI initiatives, and its European logistics network to drive growth amidst weak consumer spending and intense competition from fast-fashion players like Shein.

The company now forecasts adjusted EBIT of €680 million to €720 million ($782 million-$829 million), compared to its previous forecast of €660 million to €740 million. Zalando expressed greater confidence in reaching the midpoint of this new range, citing expected second-half benefits from its logistics network overhaul, efficiency measures, and strong growth in its higher-margin partner, software, and retail media businesses.

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Zalando shares had a good run. Cut of GMV outlook will not help today even though market expected a cut.