Zalando EBIT up 72% despite falling Q3 revenues
The group attributed the fall in sales to the impact of the warmest September on record in Europe, which had put customers off buying autumn clothing
Zalando has reported that its EBIT increased 72% to €23.2m (£20.2m) during Q3, despite revenues and gross merchandise volumes falling by 3.2% and 2.4% respectively.
The online fashion retailer managed to improve its EBIT during the quarter through reduced logistics costs, but revenues did not materialise amid low consumer sentiment and declining online sales.
The group also attributed the fall in sales to the impact of the warmest September on record in Europe, which had put customers off buying autumn clothing.
However, Zalando is currently working on new content and storytelling formats, as well as a new luxury boutique-style space in its online fashion store, to “improve the experience” for designer brands and customers.
The retailer’s efforts to diversify its operations follows the recent launch of the B2B brand ZEOS (Zalando Ecommerce Operating System) to enable brands and retailers to manage their multichannel business across Europe within one platform.
Sandra Dembeck, CFO of Zalando, said: “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.”
The retailer still expects its adjusted EBIT to land between €300m (£261m) and €350m (£305m) in the 2023 financial year, while revenues are expected to fall by between 0.5% and 3% compared with the lower half of the previous guidance ranges of -1% to 4%.
