The adjusted loss before interest and taxes (EBIT) fell within one year from 51.8 million euros to 0.7 million euros.
(Photo: Reuters)
Berlin Despite high inflation and a difficult economic environment, the fashion retailer Zalando was able to significantly reduce its losses in the first quarter. Customer demand was robust, and the costs per order fell thanks to larger shopping baskets, as the group announced on Thursday in Berlin.
For comparison: In Germany, sales in the online fashion market fell by 20 percent according to the BEVH industry association. However, Zalando’s customer order rate also fell slightly from 5.2 to 5.1 orders per year.
On the other hand, the marketplace business with partners grew by eight percentage points to 39 percent, mainly due to the increased use of the fulfillment offer by the partners. Zalando plans to increase this share to 50 percent by 2025.
The adjusted loss before interest and taxes (EBIT) fell within one year from 51.8 million euros to 0.7 million euros. The market had expected an even bigger loss of 13 million. The bottom line was a loss of 38.5 million euros after 61.3 million euros in the same period last year. Investors reacted clearly: the share price fell by more than 6.5 percent to 32.67 euros in the morning.
Gross merchandise volume (GMV) rose by 2.8 percent to a good 3.2 billion euros in the first quarter. Sales increased by 2.3 percent to almost 2.3 billion euros. The sales growth was fueled primarily by an increase of around a third in the off-price segment. Premium brands are sold at lower prices.
Plus in the off-price segment
The group confirmed its forecast. Adjusted operating earnings (EBIT) are expected to rise to between EUR 280 million and EUR 350 million. In terms of sales, management is forecasting a development of between minus one and plus four percent. The gross goods volume is expected to increase by between one and seven percent.
At the press conference, CFO Sandra Dembeck spoke of a solid first quarter. The year 2023 is a year of transformation towards profitable growth. That is the most important goal of the company. The second goal is to make targeted investments in the future. In addition, Zalando wants to further reduce costs, for example in fulfillment and marketing.
Compared to its competitors Asos from Great Britain and Aboutyou from Germany, Zalando’s performance is in the middle. While the Asos share price has developed significantly better since the beginning of the year, that of the much smaller German competitor Aboutyou was even further in the red.
With agency material.
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