March 12 (Reuters) - European online fashion retailer Zalando said on Thursday it expects its full-year adjusted operating profit to be above last year's level, driven by underlying improvements in
Zalando forecasts 2026 profit jump driven by AI boost; shares soar
Zalando’s AI-driven growth and financial outlook
(Corrects co-CEO's surname to Schroeder, not Schneider, in paragraph 5)
By Ozan Ergenay and Helen Reid
AI’s impact on productivity and profitability
March 12 (Reuters) - European online fashion retailer Zalando said on Thursday artificial intelligence was making its business more productive, forecasting a jump of 12-25% in full-year adjusted operating profit and launching a share buyback of up to 300 million euros ($346 million).
Zalando shares leapt 12%, on track for their best day since March 2024, but remain far below peaks in 2021 when the pandemic boosted online shopping.
AI innovations and operational efficiency
Zalando said AI-generated product images were saving money and time on ad creation while an AI virtual try-on was also helping shoppers choose the right size, reducing returns - a major headache for online shopping platforms.
Market concerns and analyst perspectives
Analysts said concerns had been growing over the risk to Zalando from AI. Some fear consumers could use large-language models to research products and shop online, bypassing the company's platform.
Co-CEO David Schroeder told journalists that AI is now a catalyst for efficiency and growth: "We have 70% more content now, basically at the same kind of cost."
Financial performance and future expectations
The Berlin-based company sells clothes, shoes and accessories from thousands of brands including Nike, Hugo Boss, and Coach. It expects adjusted earnings before interest and taxes (EBIT) of 660 million to 740 million euros in 2026, compared with 591 million euros in 2025.
Strategic partnerships and business expansion
Zalando, whose business-to-business arm sells services to other retailers and brands, also announced its software unit Scayle signed a deal with Levi's to run its worldwide e-commerce, which JPMorgan analysts said investors would welcome, given the brand's status and size.
Growth in key metrics
The company expects gross merchandise volume growth of 12% to 17% in 2026, after GMV - a key metric of the value of all goods sold - grew 14.7% to 17.56 billion euros in 2025.
Zalando's active customer numbers increased to 62 million in 2025 from 51.8 million, while the average order value was 62.8 euros, up from 61 euros.
External factors and risk management
Asked about the impact of surging oil prices due to conflict in the Middle East, CFO Anna Dimitrova said Zalando's energy costs were hedged for 2026.
"We don't manage the sea and flight freight on our own, so the impact is really immaterial - what is important is European demand," she said, adding that Zalando had weathered previous crises and "has the muscle to deal with this".
($1 = 0.8661 euros)
(Reporting by Ozan Ergenay and Helen Reid; Editing by Matt Scuffham and Kevin Liffey)
