Zalando beat sales expectations in the third quarter and introduced its first AI-powered shopping tool, but investors focused on weaker margins. Shares in Europe’s largest online fashion retailer fell around 5% on Tuesday despite the stronger-than-expected revenue.
Revenue rose 5.1% year on year to €3.18bn, slightly ahead of the €3.15bn analysts had forecast. Gross merchandise volume, which measures the total value of goods sold through the platform, increased 7.5% to €4.54bn.
The bigger announcement was Zalando Extended, a new feature that brings products from other online retailers into Zalando’s app, even when the company does not sell them directly.
From 2027, Zalando’s AI agent will be able to complete purchases on customers’ behalf without sending them to another website. Home retailer Westwing is the first pilot partner, starting with larger home goods.
“One year in, the ABOUT YOU integration is progressing well and we kept our momentum in delivering synergies,” said Anna Dimitrova, CFO of Zalando.
The results show where that shift is already taking hold. Revenue from business services, which include logistics and software for other brands, grew 27.9% to €354m.
Profit in the division more than doubled, while consumer revenue increased by just 2.8%. Group adjusted operating profit rose 10.6% to €106.5m, and the number of active customers reached a record 63.2 million.
“At the same time, our shift to a platform business model is accelerating, with our partner business and retail media growing at a double-digit rate and B2B revenue up almost 28%. This puts us in a strong position to create long-term value for customers, partners and shareholders,” said Anna Dimitrova, CFO of Zalando.
The weaker point was gross margin, which fell 0.9 percentage points to 38.7%, below analysts’ expectations of 39.9%. Zalando attributed the decline to targeted price investments, effective discounts, and the growing contribution of its lower-margin business-to-business division.
The group also reported a net loss of €18m, compared with a €12.5m profit a year earlier.
Analysts offered a mixed assessment. Jefferies pointed to the retailer’s sneaker clearance programme, which helped reduce inventory to 18.4% of sales, down from 21.8% a year earlier.
JPMorgan, meanwhile, warned that the shares could come under further pressure, citing “ongoing structural risk from agentic commerce development”.
That concern reflects a broader question facing online retailers: if AI agents increasingly search for and buy products on behalf of consumers, what happens to the shopping platforms they use today?
Zalando Extended is an attempt to position the company within that shift, allowing it to remain part of the transaction even when the product comes from another retailer.
Zalando maintained its full-year guidance, including adjusted operating profit of €680m to €720m. The group completed its acquisition of German rival About You in July 2025 and said the integration generated synergies worth tens of millions of euros in the mid-teens during the third quarter.