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Profits down for Zalando

Eurobuild CEE 06 November 2018
Profits down for Zalando
EUROPE Online fashion retailer Zalando has released its results for Q3 2018 with a reported revenue rise of 11.7 pct revenue to EUR 1.2 bln and an adjusted EBIT of EUR -38.9 mln, corresponding to a margin of -3.2 pct.

Zalando reached a new record 25.1 mln active customers, representing about 6 pct of the European population. An all-time high order frequency resulted in orders growing by 22.8 pct to 27.7 mln. Gross merchandise volume (GMV) grew by 16.6 pct.

Zalando Co-CEO Rubin Ritter said: “We are clearly not happy with our financial results in the third quarter. Our eyes are set on building the ecosystem for European fashion at full speed and our 2020 target of doubling the business to EUR 10 bln in gross merchandise volume. For the fourth quarter, the team’s full focus is now on pulling off a strong finish to the year.”

The lower than expected growth is mainly due to the extended and unusually hot summer period with reduced consumer demand and a delayed switch to the fall/winter season.

Fulfillment costs increased as a result of high investments in logistic infrastructure, further decreasing basket economics and increased transport costs.

For the full year, Zalando continues to expect revenue growth around the low end of its 20-25 pct target and an adjusted EBIT of EUR 150-190 mln. Zalando expects to spend around EUR 300 mln over 2018, which is slightly less than initially budgeted (around EUR 350 mlnn) as projects will be spread over a longer period of time.

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