Thursday , August 11 2022

Economy, Trade and Finance: ROUND: Zalando hopes for a strong final move


In the third quarter, Zalando had to properly allow. In terms of sales, Zalando reached 1.2 billion euros with only 11.7 percent, reducing demand for autumn and winter fashion. In the first two quarters, the Group increased by more than one in five. The stock market reacted disappointed. The MDax listed stock lost about 6 percent in the morning. In the first comment, Commerzbank analyst Andreas Riemann described the sales target for the fourth quarter as "quite ambitious". Since the beginning of the year, Zalando shares lost a quarter of its value.

To clear the camps, Zalando finally had to give discounts to be weighed. There were also higher costs for shipping, service and logistics. The result was a loss of about 42 million euros. Thus, the minus was about four times higher than a year ago. Operatively, it was worse. Zalando, which was set up for special effects and interest and taxes (EBIT), reported a loss of around € 39 million after a small profit of € 0.4 million compared to the previous year.

The trend towards less stocked shopping carts continued. Although Zalando also continues to earn customers who are diligently placing orders, but who spend less money on average per order. To reduce the number of returns, the group now wants to improve size recommendations. In Italy, the Group also intends to provide the minimum order amount for which the transport is free. Ritter said the rivals would do the same. This is not planned for other countries.

In the third quarter, internal disturbances also had a negative impact. According to the company, higher costs were due to inefficient processing of returned products, for example, when it was necessary to clean or iron. According to Ritter, problems have been fixed since then.

"We are not clearly pleased with our financial performance in the third quarter," Ritter said. ”This doesn't change our target of 10 euros gross by doubling our business by 2020.“

The group had already twice this year with the forecast of doubling this year – the last in September. For the 2018 fiscal year, Zalando expects revenue growth at the lower end of 20 to 25 percent of the target range. The operating results are expected to drop from 215m euros in the previous year to 150 to 190m euros. In 2019, Zalando wants to continue to focus on sales growth, even at the expense of profitability.

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