Zalando's Platform Pivot Amid Sneaker Softness: AI and B2B Drive Quality Earnings

The apparel retailer narrows its profit outlook despite lower top-line guidance, as the partner business accelerates and AI-generated content scales.

ZAL.DE · Earnings Call · 2026-08-04

Guidance Refined but Profitability Focused

Zalando's Q2 2026 report shows a company executing a delicate balancing act. While the top line fell short of initial ambition due to softer demand, the company narrowed its adjusted EBIT guidance to a range of EUR 680-720 million, demonstrating the strength of its underlying earnings. Robert Gentz, co-CEO, highlighted “This progress is reflected across 3 core areas of our business... through scaling our AI capabilities” — Robert Gentz, Co-CEO · 2026-08-04. The acceleration of the Partner Business is a central theme, with GMV up 13.4% in H1, and it's driving the platform shift that tempers revenue but strengthens margins.

AI and B2B: The Engines of Growth

The company is making concrete strides in AI monetization. SCAYLE Studios, launched just 2.5 months ago, has already secured over 100 brands and is generating an annual revenue run rate exceeding EUR 1 million. This is a direct result of leveraging the data and technology expertise built over 15 years. Simultaneously, the SCAYLE platform continues to win enterprise clients, including the Wortmann Group and HMV. Anna Dimitrova, CFO, emphasized the B2B momentum: “B2B revenue reached EUR 335 million, up 27.6% on a reported basis and 21.1% pro forma” — Anna Dimitrova, CFO · 2026-08-04. The sharp improvement in B2B profitability was a highlight.

B2B adjusted EBIT more than tripled and reached EUR 41 million, up from EUR 11 million a year ago with adjusted EBIT margin rising to 12.2% from 4.3%.
Anna Dimitrova, CFO · 2026-08-04

The Zalando Assistant is also showing traction, with high-value interactions up 63% between January and June, and 15% of simple customer queries now resolved directly in chat. While still early, these numbers signal a step-change in how customers engage with the platform.

Sneaker Softness as a Watch Item

A notable new theme is the broad-based softness in the sneaker market. Anna Dimitrova described it as “our sneaker business is low double digit of the total business” — Anna Dimitrova, CFO · 2026-08-04. This is a fresh headwind that the company is proactively managing by adapting in-season budgets. The sneaker category is a classic example of a category-specific risk that the platform model helps absorb. While the company doesn't expect a short-term turnaround, it remains confident in its H2 growth. The company is also expanding its lifestyle offerings, with the Home & Living category launching across all markets and a new partnership with Vestiaire Collective for pre-owned luxury.

Financial Discipline and Outlook

The balance sheet remains strong with negative working capital of EUR 494 million, and the company generated EUR 418 million in free cash flow in Q2. Inventory excluding ABOUT YOU rose only 3.9%, reflecting disciplined buying. The company returned EUR 235 million to shareholders under its buyback program, bringing free cash flow to EUR 418 million for the quarter. The guidance refinement reflects a lower top-line expectation but a narrowed profit range, with the company aiming for the midpoint. Anna Dimitrova reiterated confidence in reaching the midterm margin targets. The ongoing integration of ABOUT YOU is delivering over EUR 20 million in synergies, ahead of plan. This continues the trajectory highlighted in previous quarters, where David Schröder noted that “even without including SCAYLE, our B2B business looks very strong” — David Schröder, Co-CEO and Interim CFO · 2025-11-06 and reaffirmed that “with regards to the U.S. opportunity, indeed, this is potentially one of the biggest opportunities” — David Schröder, Co-CEO and Interim CFO · 2025-11-06. The report underscores Zalando's strategic pivot towards a platform that monetizes through partner services, retail media, and B2B logistics/software, all while investing in AI capabilities.