Group-wide, the online fashion retailer should break even in the 2023/24 financial year.
(Photo: Johannes Arlt for Handelsblatt)
Dusseldorf The Ukraine war, inflation and consumer restraint are slowing down About You’s growth. The online fashion retailer expects sales to increase by 25 to 35 percent to more than 2.1 billion euros in the financial year that has been running since the beginning of March, as the company announced on Tuesday when the annual report was presented. In the same period last year, About You grew by more than 48 percent to 1.7 billion euros.
Investors were disappointed with the outlook. Shares in the online fashion retailer fell almost 14 percent on Tuesday morning, the sharpest since the company went public about a year ago. Around noon, the minus was eight percent to 8.24 euros and thus around a third of the issue price of 23 euros. The targeted sales growth will fall short of market expectations, said analyst Volker Bosse from Baader Bank.
Tarek Müller, co-head of About You, said the company had seen war-related effects especially in EU countries bordering Ukraine. “We are also the market leader there. After sales there went down, we saw a recovery again, also in Germany,” said Müller to the Handelsblatt.
The good news is: “We have customer behavior like before the pandemic again, the typical customer between 25 and 35 buys for an occasion, and the occasions are there again.”
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The new year got off to a solid start and About You is confident of improving its results, the company said. Black figures are not yet in sight. About You is aiming for adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) to be at the same level as the previous year. At that time, the adjusted operating loss was almost 67 million euros. Co-boss Müller confirmed the goal of breaking even across the group in the 2023/24 financial year.
Zalando is also under pressure
Two aspects make him optimistic. First, the so-called Global Shipping platform from About You is growing. 100 countries can be reached in English via this platform, even if About You does not yet operate any national platforms there. The global shipping platform is currently growing very strongly, said Müller: “Above all, it fulfills the idea of collecting data in order to decide whether we should enter the markets with our own platform.”
In addition, About You generated 67 million euros in sales and 25 million euros in profit with the Scayle software for other online shops – for example those from Liebeskind, Quelle or Bayern Munich. This business is completely detached from your own end customer business.
Analyst Bosse explained that About You gave the impression that the Ukraine war was already over. The effects of supply chain distortions and overall higher costs were classified as “manageable”.
The clear price reaction suggests, adds Bosse, that the market sees the current overall market situation for the textile retail trade rather critically. The larger competitor Zalando has also been under pressure for months and had to accept the first drop in sales in the company’s history in the first quarter. For 2022, the company is aiming for a maximum increase in revenue of 19 percent. Zalando shares fell more than four percent on Tuesday.
With agency material
More: Zalando has gone from the hunter to the hunted