Zalando Stock: Mixed Market Reaction After Acquisition Announcement

Zalando SE has secured a significant milestone in its expansion strategy by successfully acquiring over 90% of ABOUT YOU Holding SE's capital stock through a public takeover offer. The €1.2 billion strategic acquisition, announced on March 7, 2025, is expected to contribute to the company's medium-term growth, with the transaction completion anticipated for summer 2025. Following this announcement, Zalando released its 2025 forecast projecting revenue growth between 4% and 9%, alongside an adjusted earnings target of €530-590 million. While the revenue projection slightly exceeded analyst expectations, the earnings target fell somewhat below consensus estimates. Notably, these forecasts do not yet incorporate the impact of the ABOUT YOU acquisition, for which Zalando intends to implement a squeeze-out of remaining minority shareholders.

Volatile Trading Reflects Investor Uncertainty

The Zalando share price demonstrated significant volatility following the announcement, initially jumping 3.5% before reversing course to close down over 5% at €32.72. This decline reduced the stock's year-to-date gains to approximately 1%, substantially underperforming the DAX index's 16.5% increase during the same period. Analysts attributed the negative market reaction primarily to concerns about the company's free cash flow performance, which fell short of expectations, as well as the midpoint of the adjusted operating profit guidance landing below consensus estimates. Despite the recent pullback, Zalando's market capitalization of nearly €9 billion remains about 80% higher than last year's valuation but still far below its summer 2021 peak when shares traded above €100.