Zalando SE

ZAL.WA

Specialty Retail · Consumer Cyclical

Exchange

Warsaw Stock Exchange

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Mixed

Growth

Mixed

Cash Flow

Strong

Stability

Strong

Valuation

Good

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Winston Score History

The full picture

Zalando is a large online fashion and lifestyle retailer based in Germany. It sells clothing, shoes, and accessories to consumers across Europe, offering both its own private-label products and items from thousands of third-party brands like Adidas, Nike, and Zara. It is one of the largest online-only fashion platforms in Europe.

Zalando makes money in two main ways: selling products directly to shoppers, and charging brands and retailers fees to sell on its platform through a marketplace model. It operates in roughly 25 European countries and generates around €10 billion in annual revenue. Its competitive edge comes from its large customer base, strong logistics network, and the difficulty of building a pan-European fashion platform from scratch. The key growth driver is expanding its platform business, where brands pay to reach Zalando's customers directly, which carries higher margins than direct retail — but weak consumer spending across Europe remains a real risk to near-term growth.

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+20.8% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-18.9% YoY

YoY Growth Rate

Earnings declining

Insider Activity

9.3%ownership

↓ Declining

Insider ownership declining — could be dilution or selling

Cash Position

Cash flow positive

1.5B PLN cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Zalando SE is a rare growth stock that's already generating positive cash flow while growing at 21%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

40.8%

Healthy — 40.8% gross margin

Profit after running costs

Operating Margin

3.2%

Thin — 3.2% operating margin

Return on the money invested

ROCE

14.8%

Good — 14.8% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth

Sales YoY

+23.6%

Fast-growing sales (+23.6% YoY)

Profit growth

EPS YoY

-63.5%

Earnings shrinking (-63.5% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is

EPS Consistency

3/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Profit that turns into cash

Cash Conversion

1079%

Turns 1079% of profit into real cash

Spare cash per sale

FCF Margin

6.2%

Modest free cash flow (6.2%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

What it owes vs what it owns

Debt / Equity

0.26

Conservative — low debt load (0.26)

Covers its interest

Interest Cover

6.68x

Adequate interest coverage (6.7x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

59.2x

no trend

Expensive — P/E 59.2

P/E over 35. The market is pricing in heavy, sustained growth.

Cheaper or dearer next year

P/E vs Forward

+49.2

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (59.2 → 10.0)

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Dividends

Not applicable for this business.

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