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Zalando Lifts Profit Forecast as Site Visits Soar

The e-commerce giant has seen its profitability squeezed of late amid heavy investment in logistics and falling average order size.
Zalando logistics centre | Source: Courtesy
By
  • Reuters

BERLIN, Germany — Zalando, Europe's biggest online-only fashion retailer, raised its full-year profit outlook on Thursday after it reported a big jump in the number of visits to its site and orders in the second quarter.

Zalando has seen its profitability squeezed of late as it has invested heavily in logistics and technology to speed delivery, and as average order size has fallen, a trend it has sought to counter through a range of measures.

The number of active customers rose 15 percent to 28.3 million in the second quarter in Zalando's 17 European markets, while site visits jumped by more than a third, 84 percent of which came through mobile devices.

Adjusted earnings before interest and taxation (EBIT) came in at €102 million ($112.71 million) on sales up 20.1 percent to €1.567 billion, versus average analyst forecasts for 95 million and €1.6 billion respectively.

It raised its outlook for adjusted EBIT to the "upper half" of the previously targeted range of between €175 million and €225 million. It said it expects revenue growth "around" the low end of a 20-25 percent range, instead of "at" the low end.

Last month, British rival ASOS warned on profits for the third time since December, saying problems ramping up warehouses in the United States and Germany had restricted product availability, hitting sales and raising costs.

By Emma Thomasson; editors: Thomas Seythal and Michelle Martin.

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