European online fashion retailer Zalando said on Thursday its use of artificial intelligence was making its business more efficient and productive, as it forecast full-year adjusted operating profit to grow in 2026 and launched an up to 300-million-euro ($346 million) share buyback.
Zalando shares jumped 7% in early trading as investors welcomed the positive outlook, providing some succour to the stock that had tumbled sharply from peaks in 2021 when the pandemic boosted online shopping.
Zalando said AI-generated product images were saving money and time on ad creation and enabling it to publish 70% more content, while an AI virtual try-on was also helping shoppers pick their correct size, reducing size-related returns - a major headache for online shopping platforms.
Analysts said concerns had been growing over the risk to Zalando from AI, with some worried consumers could use large-language models like ChatGPT to research products and shop online, bypassing the company's platform.
The Berlin-based company, which sells clothes, shoes and accessories from thousands of brands including Nike, Hugo Boss, and Coach, expects adjusted earnings before interest and taxes (EBIT) of 660 million to 740 million euros in 2026, compared with 591 million euros in 2025.
"We are providing our customers and partners with experiences and services that seemed impossible just a few years ago while making our own operations more efficient," Robert Gentz, co-CEO of Zalando, said in a statement.
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 ecommerce, which JP Morgan analysts said investors would welcome given the brand's status and size.
The company expects gross merchandise volume growth of 12% to 17% in 2026, after GMV - a key revenue metric measuring 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 in 2024, while the average order value was 62.8 euros, up from 61 euros a year earlier.
The company said it would repurchase up to 20 million shares with a total price of up to 300 million euros.
