Zalando's stock took a beating in midday trading, plunging more than 16 percent after the German e-commerce giant released its second-quarter results. On the surface, the headline figures looked impressive—gross merchandise volume and revenue both grew by over 20 percent. But a closer look reveals that these numbers were inflated by the company's acquisition of former rival About You, masking much slower underlying growth. As a result, Europe's largest online fashion retailer has narrowed its guidance for the second half of the year, signaling that the road ahead may be bumpier than the initial numbers suggest. Main Developments Reported group GMV rose 20.7 percent to 4.9 billion euros, while revenue climbed 20.8 percent to 3.4 billion euros. However, on a pro forma basis—which adjusts for the inclusion of About You in both periods—GMV grew just 4.4 percent and revenue only 1.1 percent. This stark contrast highlights how much of the reported growth is attributable to the acquisition, which was completed at the end of 2025. About You, a youth-focused shopping platform built around content creators, has become a major contributor to Zalando's reported growth. The company stated that integration is progressing well, with 6 million customers now across both platforms, and About You customers representing about 10 percent of the group's user base. Yet the underlying organic growth tells a different story, one of a core business that is decelerating. Read also: Napapijri Enters Mexico and Unveils Fall 2026 Campaign with Jamie Campbell Bower In light of these mixed signals, Zalando narrowed its full-year adjusted EBIT guidance. The company now expects GMV and revenue growth to land at the lower end of its previously announced target range of 12 to 17 percent. This revision came as a surprise to investors, who had hoped for a more robust outlook given the headline numbers. Chief financial officer Anna Dimitrova addressed the revision during a conference call with journalists, emphasizing that the change reflects strong first-half performance rather than a dimmer view of the second half. “This refinement is not driven by a changed outlook regarding the environment or about our view on H2,” she said. Dimitrova added that they remain confident of hitting the midpoint within the guidance range, citing the quality of earnings and the continued mix shift towards the partner business. Analysts offered divergent takes on the results. Bloomberg Intelligence retail analyst Tatiana Lisitsina struck a cautious note, pointing to consumer demand as a key concern. “B2B remains the main growth engine, with topline [second-quarter] gains of 27.6 percent, but B2C momentum appears to be slowing as fashion e-commerce remains exposed to soft consumer demand,” she said. In contrast, RBC analyst Richard Chamberlain was more positive, noting that despite the lower pro forma numbers, Zalando has long-term opportunities with its expanding logistics and marketplace capabilities. “We see potential for [growth] driven by its range and logistics advantage, and as its market leading platform is attractive to other brands,” he said. Background Zalando's acquisition of About You, completed at the end of 2025, was a strategic move to capture a younger demographic and expand its footprint in Eastern Europe. About You's content-driven approach and strong presence in that region were seen as complementary to Zalando's existing operations. The deal was expected to create synergies, and the company has already delivered more than 20 million euros in synergies in the first half of the year, ahead of its internal plan. Dimitrova expressed confidence in reaching the 40-million-euro full-year target. The company's business-to-business division has been a standout performer, with revenue rising 27.6 percent on a reported basis to 300 million euros. This growth was driven by its Zeos logistics business and the inclusion of e-commerce software platform Scayle. The division generated adjusted EBIT of 40.7 million euros during the quarter. Co-chief executive officer Robert Gentz described the company's ambition to become a leading B2B operating system for fashion and lifestyle across Europe, leveraging its scale, logistics infrastructure, and software services. In the second quarter, Zeos launched a fulfillment partnership with British retailer Marks & Spencer, which will roll out across 26 markets, and sealed a logistics deal with Hugo Boss that is set to debut soon. Scayle also gained new clients, including German shoe retailer Wortmann Group, bike components company Rose Bikes, and British entertainment retailer HMV. Why It Matters The slowdown in Zalando's core B2C business is a bellwether for the broader European fashion e-commerce market, which continues to face soft consumer demand. As inflation and economic uncertainty weigh on discretionary spending, even the largest players are feeling the pinch. Zalando's reliance on its B2B segment to drive growth un