Stock prices continue to plummet as of August 6, 2025, 4:30 PM.
Zalando, the popular European online fashion retailer, has seen a dip in investor confidence as the pro-forma growth rate for 2025, including the acquisition of About You, has been revised downward to 4-7%, a decrease from the previous range of 4-9%. This news, coupled with a year-to-date loss of around 25% for Zalando's stock, has left many investors feeling uncertain about the retailer's future.
The acquisition of About You, which closed in July 2025 for a valuation of 1.13 billion euros, has raised questions about the complexity and cost of integrating two large businesses, as well as the realization of promised synergies. Analysts, such as Frederick Wild of Jefferies and Georgina Johanan of JPMorgan, have expressed concern about the long payoff horizon for synergies and margin pressure.
Investors are also focused on whether revenue growth will convert sustainably into higher margins and free cash flow once acquisition-related costs and integration spend are included. Historical caution around fashion and marketplace margins makes them conservative, and they prefer clarity on near-term EPS accretion and cash-flow benefits, not just top-line or long-range targets.
Macro and sector headwinds, such as cyclical consumer spending, tariff and supply-chain pressure, and promotional intensity, are also weighing on investor sentiment. Despite Zalando's strong numbers, such as a gross merchandise volume (GMV) of 4.06 billion euros in Q2 2025, representing a 5% increase from the previous year, markets price these risks into growth expectations.
Some outlets have emphasised the headline revenue beat but note small or mixed EPS beats and that guidance can be ambitious. Investors often reward consistent, conservative guidance rather than one-off beats. Balance-sheet and capital allocation scrutiny is also a concern, with investors closely watching how much cash is used for About You, integration, and working capital versus dividends and buybacks.
To lift confidence, investors want to see clear, measurable synergy milestones and a realistic timeline for cost savings and margin improvement. They also want evidence of sustained EPS and free-cash-flow improvement excluding one-off effects, stable or improving gross/adjusted margin trends as the businesses are integrated, operational proof points that About You’s growth is accretive, and resilience versus macro shocks across multiple quarters.
Despite Zalando's strong numbers and strengthened EBIT forecast, the stock's decline shows that even strong numbers do not guarantee rising prices. The acquisition of About You aims to leverage synergies and realize efficiency potential, but the market remains cautious towards Zalando as it navigates these complexities. Analysts' questions about the future growth dynamics of Zalando are contributing to its stock's performance, and it remains to be seen how Zalando will address these concerns to regain investor confidence.
[1] Source: Analyst notes and Q2 release [2] Source: About You acquisition terms [3] Source: Market sentiment and investor expectations [4] Source: Macro and sector headwinds [5] Source: Balance-sheet and capital allocation scrutiny
Investors are seeking clear, measurable synergy milestones and a realistic timeline for cost savings and margin improvement from Zalando, as they aim to convert revenue growth into higher margins and free cash flow after the acquisition of About You. Analysts' questions about the future growth dynamics of Zalando are contributing to its stock's performance, and the market remains cautious towards Zalando as it navigates the complexity and cost of integrating two large businesses, with concerns about the long payoff horizon for synergies and margin pressure.
