Zalando posts strong improvement in Q3 sales and profit

Zalando’s third-quarter gross merchandise volume (GMV) rose 7.8 percent to 3.5 billion euros, revenue increased 5 percent to 2.4 billion euros and adjusted EBIT climbed from 23 million euros to 93 million euros.

The company said in a statement that adjusted EBIT margin for the quarter increased by 2.9 percentage points to 3.9 percent. The number of active customers increased by about half a million quarter on quarter, bringing the total number of active customers to 50.3 million in the third quarter.

“Consumers love the quality brands we are adding, spend time with our exciting digital experiences, and embrace our expanding lifestyle offerings in areas such as sports, beauty and kids & family,” said Dr. Sandra Dembeck, the company’s chief financial officer.

The company’s revenue in the B2C vector rose 4.3 percent to 2.2 billion euros in the third quarter, adjusted EBIT rose to 86.7 million euros, representing an adjusted EBIT margin of 4 percent, driven by improved gross margins and lower fulfilment costs.

Zalando added that revenue in the B2B growth vector increased by 11.1 percent to 239.7 million euros compared with a year ago. Adjusted EBIT fell from 12.6 million euros to 6.7 million euros, representing an adjusted EBIT margin of 2.8 percent, compared to 5.8 percent mainly caused by frontloaded investments to support future growth.

Confirming the guidance, Zalando said, the company expects GMV to grow between 3 percent and 5 percent, revenue to increase between 2 percent and 5 percent and adjusted EBIT to grow to between 440 million euros and 480 million euros.

“To capture further growth opportunities, we are investing into initiatives such as evolving our Plus loyalty program, offering more inspiring content, ramping up our tech hub in China and driving localised convenience for customers via our European logistics network,” added Dembeck.