Last Update11 Sep 25Fair value Increased 6.49%
- The acquisition of ABOUT YOU expands Zalando’s reach and scale while bringing additional experienced leadership to the company.
- Over the medium term, Zalando is expected to improve both top-line growth and margins across its B2C and B2B businesses, supported by continued investment and synergies with ABOUT YOU.
- Although consumer demand remains subdued and fast-fashion competitors like Shein are pressuring Zalando’s business, the company is positioned better than ever to benefit from an eventual e-commerce recovery.
- The rapid adoption of AI in marketing and content operations could significantly reduce costs and lead times. However, this advantage is partly offset by the loss of an EU court case concerning online content rules, which will increase compliance costs.
- Management’s lowered guidance for 2H25 (excluding ABOUT YOU) reflects caution, but also sets the stage for an earnings beat if the acquisition delivers as planned
- Investors have never been more pessimistic about Zalando's prospects, indicated by a near all-time low P/S ratio.
- The company is a market leader with approximately 12% of the European market share, benefiting from economies of scale.
- Zalando's dominant position in the market enables it to function as a comprehensive one-stop shop, offering a unified inventory pool for international companies seeking to enter the European market.
- The current sharp decline in Zalando and similar online fashion retailers is seen as temporary, with the potential to strengthen Zalando's future profit generation.
- Zalando's healthy financial position and continuous investment increase the potential to gain market share from struggling competitors in Europe.
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