Zalando's AI push helps Q1 growth

(Sharecast News) - Zalando reported stronger first-quarter growth on Wednesday, as the integration of About You and wider use of artificial intelligence helped lift sales, customer numbers and profitability.

The Berlin-based European online fashion retailer said gross merchandise volume rose 21.7% on a reported basis to €4.3bn, while revenue increased 23.8% to €3.0bn.

On a pro-forma basis, stripping out the impact of the About You acquisition, GMV rose 6.0% and revenue grew 3.4%.

Adjusted EBIT increased 38.7% year on year to €65m, with the adjusted EBIT margin improving to 2.2% from 1.9%.

Zalando said the result was supported by €10m of synergies from the About You acquisition before integration costs, and said it remained on track to deliver €40m of synergies from the deal in 2026.

The company confirmed its full-year guidance despite a volatile geopolitical backdrop and subdued macroeconomic environment.

It continued to expect reported GMV and revenue growth of 12% to 17% in 2026, and adjusted EBIT of €660m to €740m.

"Our strong first quarter demonstrates the strength of our strategy," said co-chief executive Robert Gentz.

"We are very satisfied with the progress we're making in strategically scaling AI innovations and integrating About You.

"Our unique data and infrastructure that we built over 17 years - including the richest fashion-specific data in Europe and the continent's leading logistics network for fashion and lifestyle - are a massive advantage when supercharged with AI."

Zalando said its AI tools were improving both customer engagement and operational efficiency.

Its Zalando Assistant, a chat-based tool offering personalised fashion and beauty recommendations, had been used by nearly 10 million customers so far this year, compared with six million across the whole of 2025.

The company said the expansion marked a step towards turning the assistant from a shopping tool into a broader lifestyle companion.

Generative AI was also being used to speed up product onboarding, including by detecting and correcting image errors and enriching around 6,000 articles a day with missing material composition data.

Zalando said up to 85% of articles were now ready to go online in under three days, a 10 percentage-point improvement over the past two years.

In logistics, AI-driven robots were now automating about two million picks a month across its European fulfilment network.

Customer metrics also improved.

Active customers reached a record 62.3 million, up nearly 10 million year on year, helped by the inclusion of About You and organic growth across Zalando's platforms.

Average spend per customer rose 2.9% to €305, supported by larger basket sizes, while order frequency was stable.

Zalando's Plus loyalty programme grew to 18.5 million members.

The company said its "team of apps" strategy was gaining traction across the core Zalando app, the trend-focused About You app and the deal-led Lounge by Zalando app.

About You and Lounge both delivered double-digit growth, while sports, kids and family, and beauty performed strongly at the start of the spring-summer season.

Zalando's partner business continued to grow faster than its retail business, supporting its shift toward a higher-margin, capital-light platform model.

In business-to-business operations, sales rose 23.6% to €297m and adjusted EBIT increased to €26m, with the margin rising to 8.6%.

Its ZEOS platform, which supports brands and retailers with cross-border ecommerce, launched pilot partners in Norway and now operates across 26 markets and 20 sales channels.

"Our first quarter results reflect the same unwavering financial and operational discipline we already showed last year," commented chief financial officer Anna Dimitrova.

"We promised profitable growth and delivered it - again.

"Synergies are ahead of plan, our underlying business is strengthening every day, and our full-year guidance stands."

At 1132 CEST (1032 BST), shares in Zalando were down 1.01% in Frankfurt at €20.59.

Reporting by Josh White for Sharecast.com.