Zalando on track for full-year profit after strong third quarter
Online fashion retailer Zalando has said it is on track to make a full-year profit after it achieved above market growth and strong gains in profitability in its third quarter.
Group revenue rose by 24.2% to €501 million in the retailer’s third quarter with growth in international markets being particularly strong.
Revenues in the Rest of Europe segment increased by 39.9% to €198 million. The DACH segment continued to lead the group’s profitability with an adjusted EBIT margin of 3.9%, excluding stock based compensation, compared to -4.3% in the same period last year.
Overall, Zalando achieved an adjusted EBIT margin of 0.8% in the period to mark the retailer’s the first ever group EBIT breakeven in a third quarter. This was driven by improvements in all cost lines, including cost of sales, fulfilment, marketing and administration.
Never Miss a Retail Update!Rubin Ritter, member of the Zalando management board, said: “Zalando’s revenue growth continued to outpace the overall online fashion industry, which faced a difficult start to the fall/winter season due to unseasonably mild weather. Reviewing our successful development in the third quarter we expect to reach slight group EBIT profitability for the full year.”
During the quarter, Zalando launched a collaboration with Topshop and rolled out express delivery across all of its markets. In addition, its share of mobile traffic reached 43%, with 5.1 million app downloads by the end of the period. The number of active customers grew by 15% to 14.1 million, and gross merchandise volume per active customer increased by 12%. In total, Zalando websites registered 322 million visits in the period.
Earlier this week, Zalando announced that it had teamed up with Gap in a partnership that will see the US fashion retailer open its own dedicated online shop within Zalando.
