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1. Company Snapshot

1.a. Company Description

Zalando SE operates an online platform for fashion and lifestyle products.It provides clothing, footwear, accessories, and beauty products with free delivery and returns.The company also sells its products through its Zalando Lounge; and brick-and-mortar outlet stores in Berlin, Frankfurt, Cologne, Leipzig, Hamburg, Hanover, Münster, Stuttgart, Mannheim, and Ulm.


It serves customers in 23 countries, including Austria, Belgium, Croatia, Czechia, Denmark, Estonia, Finland, France, Germany, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom.The company was founded in 2008 and is headquartered in Berlin, Germany.

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1.b. Last Insights on ZAL

Zalando SE's recent performance was positively driven by strong Q3 growth, fueled by the successful integration of About You and new business partnerships. The company's revenue surged 26.5% to €3.02 billion, exceeding analyst expectations. A five-year deal with the German Football Federation also boosted growth prospects. Additionally, the appointment of a new CFO, Anna Dimitrova, with over two decades of international finance experience, is expected to support the company's strategic plans. A share buy-back announcement also contributed to the positive momentum.

1.c. Company Highlights

2. Zalando's Q3 2025 Results: Strong Growth and Profitable Expansion

Zalando's Q3 2025 results demonstrate a strong financial performance, with 7.5% pro forma revenue growth and adjusted EBIT reaching EUR 96 million. The company's gross margin decreased by 1.1 percentage points to 39.6% due to the inclusion of ABOUT YOU and negative impacts from active customer participation in commercial events. The EPS came out at EUR 0.06, significantly lower than the estimated EUR 0.3202. Revenues grew to EUR 277 million in the B2B segment, a 15.6% increase year-over-year, driven by ZEOS Fulfillment and SCAYLE.

Publication Date: Nov -08

📋 Highlights
  • Pro Forma Growth & Profitability:: Zalando achieved 6.7% pro forma GMV growth and 7.5% pro forma revenue growth, with adjusted EBIT of EUR 96 million.
  • B2B Segment Expansion:: ZEOS and SCAYLE drove B2B revenues to EUR 277 million (15.6% YoY growth), with SCAYLE contributing high-gross-margin revenue.
  • Cross-Platform Customer Base:: Combined user base now exceeds 60 million, including 5 million dual users of Zalando and ABOUT YOU platforms.
  • Gross Margin Target:: Despite a 1.1ppt decline to 39.6%, the company reaffirmed its 40% group-level gross margin target by 2028.
  • Strategic Synergies & Buyback:: EUR 100 million share buyback announced to fund compensation programs, with confidence in EUR 100 million synergy target delivery.

Segment Performance

In B2C, Zalando continues to expand into lifestyle, with a focus on sports, and has announced a partnership with the German Football Federation. The company's B2B segment, ZEOS, is building the operating system for fashion and lifestyle e-commerce in Europe, with a focus on logistics and software. The acquisition of ABOUT YOU has complemented Zalando's software offering with SCAYLE, a leading enterprise digital commerce platform.

Valuation and Growth Prospects

With a P/E Ratio of 21.38 and an EV/EBITDA of 6.27, the market is pricing in a certain level of growth. Analysts estimate next year's revenue growth at 15.2%. Zalando's focus on increasing GMV spend per customer, rather than individual basket size, is expected to drive growth. The company's commitment to achieving a 40% gross margin target by 2028 is also a positive indicator.

Synergies and Integration

The synergy guidance of EUR 100 million remains unchanged, with the company becoming more confident in delivering the synergies. The integration with ABOUT YOU is evolving well, with both teams excited to team up and drive value strategically and financially. Zalando is confident in achieving the synergies outlined, with more impact expected in later years.

Outlook and Conclusion

Zalando confirms its combined guidance for the financial year 2025 and anticipates a strong finish to the year, with mid-single-digit pro forma GMV growth in Q4. The company's ecosystem strategy and integration of ABOUT YOU are progressing well, with a focus on driving long-term customer value and reducing returns. With a strong growth trajectory and improving profitability, Zalando is well-positioned to deliver on its midterm guidance.

3. NewsRoom

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Top European Growth Companies With Strong Insider Ownership November 2025

Nov -24

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Zalando appeals to EU’s top court over DSA platform status

Nov -14

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Bjorn Borg AB (FRA:6BB) Q3 2025 Earnings Call Highlights: Record Sales and Strategic Growth ...

Nov -14

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The Strong Earnings Posted By Zalando (ETR:ZAL) Are A Good Indication Of The Strength Of The Business

Nov -14

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Zalando (XTRA:ZAL): Assessing Valuation After Q3 Growth, Major Partnerships, and Buy-Back Announcement

Nov -09

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Can Zalando's (XTRA:ZAL) National Team Deal Redefine Its B2B Ambitions in European Fashion?

Nov -08

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Zalando’s Q3 earnings rise as it strikes DFB deal to grow in sportswear

Nov -07

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Zalando delivers strong Q3 growth as active customers surpass 61 million

Nov -06

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.71%)

6. Segments

Fashion Store

Expected Growth: 15.4%

Growing demand for online fashion, increasing mobile penetration, and expanding product offerings drive Zalando's growth. Strong brand partnerships and investments in logistics and technology further support the company's expansion.

Offprice

Expected Growth: 12.3%

The off-price segment is expected to grow driven by increasing demand for affordable fashion, rising popularity of sustainable consumption, and Zalando's strong online presence, allowing customers to purchase trendy products at discounted prices.

All Other

Expected Growth: 10.5%

The 'All Other' segment of Zalando SE is expected to grow driven by increasing demand for lifestyle and beauty products, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digitalization and investments in technology will further boost growth.

7. Detailed Products

Fashion

Zalando's core business, offering a wide range of clothing, shoes, and accessories for men, women, and kids from various brands and designers.

Zalando Plus

A subscription-based service offering unlimited free shipping, free returns, and early access to sales and promotions.

Zalando Lounge

A members-only outlet offering discounted prices on past-season fashion products from popular brands.

Zalando Fulfillment Solutions (ZFS)

A logistics and fulfillment service for partner brands, offering storage, packaging, and shipping solutions.

Zalando Platform

A platform-as-a-service offering, enabling partner brands to integrate their e-commerce operations with Zalando's technology and logistics infrastructure.

8. Zalando SE's Porter Forces

Forces Ranking

Threat Of Substitutes

Zalando SE operates in the e-commerce industry, where substitutes are readily available. However, the company's strong brand recognition and loyalty programs help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Zalando SE's customers have a high bargaining power due to the availability of alternative online retailers and the ease of switching costs. The company needs to focus on customer retention and loyalty programs to maintain its market share.

Bargaining Power Of Suppliers

Zalando SE has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company's strong relationships with suppliers and its ability to negotiate prices also mitigate the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants in the e-commerce industry is moderate, as it requires significant investment in technology, logistics, and marketing. However, new entrants can still disrupt the market with innovative business models and competitive pricing.

Intensity Of Rivalry

The e-commerce industry is highly competitive, with many established players and new entrants vying for market share. Zalando SE needs to focus on differentiating itself through its product offerings, customer service, and loyalty programs to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 31.11%
Debt Cost 8.25%
Equity Weight 68.89%
Equity Cost 11.97%
WACC 10.81%
Leverage 45.16%

11. Quality Control: Zalando SE passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 3.7/10

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Quality: 4.8

Yield: 0.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

23.73$

Current Price

23.73$

Potential

-0.00%

Expected Cash-Flows