Zalando: Q3 profitability improves but revenue and GMV drop

Zalando reported adjusted third-quarter EBIT of 23.2 million euros, an increase of 72 percent compared with last year.

Zalando’s GMV declined 2.4 percent to 3.2 billion euros and revenue fell 3.2 percent to 2.3 billion euros in the quarter amid a challenging macroeconomic environment of low consumer sentiment and declining online sales.

The company is confirming the full-year guidance for adjusted EBIT but revising it for gross merchandise volume (GMV) and revenue on expectation of continued pressure on demand for the rest of the year.

“Storytelling, logistics and technology are key to boost our future growth. Our healthy balance sheet gives us the financial flexibility to make these strategic investments. On top of that, our financial discipline meant that we were able to deliver on another quarter of improved profitability,” said Sandra Dembeck, Zalando CFO in a statement.

Zalando posts drop in Q3 GMV and sales

The company said that the quarter was also adversely impacted by the warmest September on record in Europe, as shoppers did not buy autumn and winter apparel as they usually do in this season.

The company added that the proportion of partners contributing to Fashion Store GMV was 39 percent, up 4 percentage points compared with a year ago.

Zalando cuts revenue and GMV outlook

Zalando continues to expect adjusted EBIT to be 300 million euros to 350 million euros in 2023.

The company further said that GMV is now expected to develop between negative 2 percent and 1 percent and revenue between negative 3 percent and negative 0.5 percent in 2023.

Previously, the company expected GMV and revenue to come in at the lower half of the guidance ranges of 1 percent to 7 percent for GMV and negative 1 percent to 4 percent for revenue.

In comparison, in 2022 GMV was 14.8 billion euros, revenue was 10.3 billion euros and adjusted EBIT was 184.6 million euros.