Otto Group posts €1.1bn EBITDA as new female leadership signals strategic shift
Otto Group posts stronger profits under new female leadership: EBITDA €1.1bn, net income €312m, revenue €13.8bn; restructuring and Temu competition intensify.
The Otto Group reported a sharp rise in profitability for the 2025/26 fiscal year under its newly appointed leadership, with EBITDA increasing by about 24% to €1.1 billion and net income jumping nearly 90% to €312 million. The results came at a Hamburg press conference where Petra Scharner‑Wolff, who took the helm in March, presented the figures alongside newly installed executives in finance and communications. Despite the profit growth, total revenue fell roughly 8% to €13.8 billion as the group continued prioritizing margin improvement over top‑line expansion.
Female leadership takes centre stage
Petra Scharner‑Wolff led the presentation, flanked by new finance chief Katy Roewer and communications head Annette Siragusano, signaling a notable shift in the Otto Group’s executive team composition. Company spokespeople framed the lineup as intentional messaging about governance and direction, emphasizing operational discipline and profitability as priorities. Scharner‑Wolff described the year as a milestone, saying the company had “achieved our goals and posted the best result since the pandemic.”
The visible leadership change is more than symbolic for the Hamburg‑based retailer: it accompanies a sharpened strategic focus that places earnings and efficiency ahead of aggressive revenue growth. Management signalled that the current mix of talent is intended to execute that plan and drive further margin improvements across the group’s businesses.
Earnings up while sales decline
The group’s EBITDA rose to €1.1 billion, a near‑quarterly increase compared with the prior year, and net profit climbed to €312 million. Those gains reflect a longer‑term shift in strategy away from scale‑driven expansion toward tighter cost control and higher returns on capital.
At the same time, reported sales fell to €13.8 billion, an 8% decline versus the previous year, a figure partly affected by the prior consolidation of the About You online fashion unit, which the group sold to a competitor. Management argued the revenue drop was acceptable given the improved profitability and the aim of restoring sustainable margins after pandemic volatility.
Restructuring and workforce impact
The drive for efficiency has had concrete consequences across the organisation, with the company announcing measures that include the planned elimination of roughly 1,000 positions. Otto has also pared vendor relationships where merchant performance did not meet its new benchmarks, a move that has drawn criticism from some partners and industry observers.
Management defended the measures as necessary adjustments in a more competitive market, but acknowledged the social and reputational implications of cutting jobs and suppliers. The company reiterated its commitment to sustainability and fair partnerships even as it pursues tighter operational discipline.
Intensifying competition from low‑cost platforms
Executives cited mounting pressure from low‑cost platforms such as Temu, Shein and AliExpress as a key external factor shaping strategy, particularly for price‑sensitive fashion brands within the group like Bonprix. Scharner‑Wolff acknowledged that these entrants have materially increased price competition and that some Otto Group customers continue to shop on those sites despite concerns about sustainability.
The presence of ultra‑low‑price competitors has forced the group to balance its sustainability commitments with short‑term customer behavior and margin realities. Management said the company will continue to promote its sustainability credentials but must also find ways to remain competitive on price and value.
Regulatory developments and Temu fine
The European Commission announced a €200 million fine against Temu, citing failures to properly assess systemic risks posed by illegal or unsafe products sold on its platform. The ruling adds regulatory pressure to the marketplace model and could influence consumer trust and cross‑border trade patterns in the EU.
Industry officials noted the fine could change the competitive landscape if enforcement tightens, but they also warned that enforcement alone may not immediately shift consumer purchasing behavior. For retailers like Otto Group, stronger regulation of ultra‑low‑cost platforms may offer some relief while broader strategic changes take effect.
Logistics boost for Hermes amid mixed effects
The Otto Group’s logistics arm, Hermes, confirmed that parcel volumes from international, low‑cost platforms have grown, but declined to quantify the financial impact. Hermes emphasised its role as a neutral logistics provider tasked with reliable delivery for lawful merchants, including international sellers entering the German market.
Observers said the trend creates a complex dynamic: while Otto faces retail‑side competition from platforms like Temu and Shein, its logistics subsidiary can see revenue gains from handling that same cross‑border traffic. That dual exposure complicates the group’s calculus on how to respond commercially and politically to the influx of low‑cost imports.
Investors reacted to the set of results as evidence that Otto Group’s reorientation toward profitability is beginning to yield measurable returns, even as the company navigates regulatory shifts, public scrutiny over supplier and workforce decisions, and intensified competition from global low‑cost marketplaces. The company has signalled it will continue to press efficiency measures while maintaining sustainability as a core principle.
