Zalando, the fashion e-commerce giant, has managed to achieve positive results in the first quarter of this year despite facing challenging market conditions. The company reported a 2.8% growth in gross merchandise volume (GMV) amounting to €3.242 billion, while revenue increased by 2.3% to €2.255 billion. Although Zalando is still experiencing losses, it has managed to significantly reduce its adjusted EBIT loss to just €0.7 million, compared to €52 million during the same period in the previous year.
One area that has experienced substantial growth for Zalando is its off-price segment, which witnessed a sales increase of 33% and reached €415.5 million. This achievement is attributed to the company’s platform strategy, with partner sales accounting for 39% of the Fashion Store GMV. Zalando also saw a growth of 4.8% in active customers, bringing the total number to 51.2 million.
Despite the challenging economic environment and high inflation, Zalando has concentrated on improving profitability, leading to better order economics, reduced fulfillment costs, and a significant improvement in adjusted EBIT. Co-CEO Robert Gentz commended the company’s flexible business model, which has enabled it to thrive in a tough market. Collaborations with renowned brands such as Adidas and Salomon, as well as the introduction of limited-edition capsule collections with designer brands, have contributed to increased customer engagement.
Zalando’s online shopping club, Lounge by Zalando, has also played a significant role in the growth of its off-price segment. The club, which offers time-limited offers and discounts on premium brands, experienced strong growth in the first quarter. Furthermore, Zalando has made progress in its platform strategy, with the proportion of partners contributing to Fashion Store GMV increasing by 8 percentage points compared to the previous year.
CFO Dr Sandra Dembeck emphasized the company’s focus on driving sustainable efficiencies in fulfillment and marketing, while also selectively investing in new growth opportunities. Zalando has been transforming its e-commerce infrastructure into productized logistics solutions for other businesses across Europe.
Looking forward, Zalando anticipates GMV to grow between 1% and 7% for the remaining part of the year, with revenue estimated to be in the range of -1% to 4% compared to the previous year. The company projects an adjusted EBIT of €280 million to €350 million for the year. Zalando remains cautiously optimistic, acknowledging the uncertainty present in the market.
Useful links:
1. Zalando Official Website
2. Zalando Press Releases
