Zalando Price Target Trimmed at mwb Research But Analyst Stays Bullish After Mixed Q2

mwb Research lowered its price target on Zalando (ETR: ZAL) but kept a Buy rating after the German online retailer reported a mixed second quarter and revised its outlook to a more cautious, back-end loaded stance.

Analyst Alexander Zienkowicz told investors in a note that strong reported growth “largely reflecting the consolidation of ABOUT YOU” masked softer underlying momentum.

Gross merchandise value rose 20.7% to 4.9 billion euros and revenue climbed 20.8% to 3.4 billion euros, but on a pro-forma basis GMV growth slowed to 4.4% and revenue growth to just 1.1%. The firm pointed to weaker sneaker demand and a continued shift from own retail to partner business as the main drags.

Earnings proved more resilient. Adjusted EBIT rose 10.4% to 205 million euros, though the margin declined to 6.0% from 6.5%. mwb Research said partner business, retail media and B2B remained strong, with B2B “the clear highlight,” as revenue jumped 27.6%.

Management now expects GMV and revenue growth in the lower half of its prior 12% to 17% range, and narrowed adjusted EBIT guidance to 680 million to 720 million euros.

mwb Research said the revised outlook “still requires a meaningful acceleration in the second half,” which “looks demanding” given cautious consumers, shifting the burden of delivery toward the fourth quarter.

The firm called Zalando’s investment case “intact,” supported by the platform shift, ABOUT YOU synergies and growing B2B earnings, while trimming estimates and cutting its target to 38 euros from 39 euros.