European online fashion retailer Zalando on Wednesday reported stronger quarterly growth, citing investments in artificial intelligence that were improving its efficiency.
Gross merchandise volume (GMV), a key revenue metric measuring the value of all goods sold, rose 21.7% to 4.3 billion euros ($5.03 billion) in the first quarter, compared to 3.5 billion euros a year earlier, Reuters quoted the company as saying.
Zalando highlighted the impact of its "Zalando Assistant", a chat-based AI tool that acts like a fashion stylist, providing beauty advice and allowing customers to receive personalized product suggestions through conversations.
The company added that AI-generated images were also helping it bring new partner items online faster and improve quality, allowing it to publish about 85% more content.
"Our strong first quarter demonstrates the strength of our strategy. We are very satisfied with the progress we’re making in strategically scaling AI innovations and integrating ABOUT YOU,” Co-CEO Robert Gentz said in a statement.
Zalando is investing heavily in refining its offer to customers and strengthening its European logistics network, which it has also opened up to partners, as it seeks to drive growth amid faltering consumer spend and competition from fast-fashion retailers with cheaper offerings such as Shein.
It concluded its acquisition of About You last year, in a deal valuing its smaller rival at 1.13 billion euros.
Shares in Zalando were flat by mid-morning, after initially rising as much as 4.6% in early trading.
The company confirmed its full-year guidance for 2026.
"Given the relatively high short interest, we would expect the stock to move higher, although the lack of implied upgrades and ongoing concerns on the mid-term outlook from the development of agentic commerce, mean that any material move up is unlikely to be sustained in our view," analysts at J.P. Morgan said.
