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Zalando delivers growth in third quarter with active customers surpassing 50 million



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Image: Zalando

Zalando, one of Europe's leading online platforms for fashion and lifestyle, delivered growth in the third quarter. The number of active customers increased by eight percent compared with a year ago, exceeding 50 million for the first time.

Zalando's loyalty program, Plus, almost tripled its membership. The company took successful steps to drive profitability, contributing to an improvement in earnings and softening the impact of declining consumer sentiment.

"I am proud that we are reaching 50 million active customers and of our progress in deepening our relationships with them," said Robert Gentz, co-CEO at Zalando. "We will continue to carefully navigate through these turbulent times, pushing forward with measures to improve profitability as well as strategic initiatives that inspire and engage with our customers."

GMV grew 7.1 percent to 3.28 billion euros in the third quarter and sales rose 2.9 percent to 2.35 billion euros. Adjusted earnings before interest and taxes (adjusted EBIT) increased to 13.5 million euros from 9.8 million euros in the same quarter a year ago.

Zalando continues to be laser-focused on protecting profitability. The introduction of a minimum order value has encouraged customers to increase the size of their basket or pay the delivery fee. As a result, orders below the minimum order value are now profitable.

Zalando captured further marketing efficiencies in the third quarter, reducing costs by almost 100 million euros so far this year. The company also drove efficiency improvements across its European logistics network including managing excess inventory.

Zalando is advancing on its mission to drive customer excitement around top brands and assortment. The first collaboration with Highsnobiety, just three months after the acquisition, improves storytelling, helping Zalando engage more with relevant audiences and creating deeper emotional bonds with customers. Zalando and Nike deepened their partnership, enabling customers to shop for Nike member-exclusive products on Zalando. The company's partnership with Sephora grew, adding more beauty brands on the platform and expanding into Italy.

Brand partners and stores continue to successfully grow their business on Zalando. The proportion of partner businesses contributing to Fashion Store GMV grew by seven percentage points compared with the same quarter last year, underlining the attractiveness of Zalando's platform for partners and the company's progress against its strategic objective to grow its partner business share to 50 percent of Fashion Store GMV by 2025.

"With consumer confidence at new lows and ongoing inflation, it was a prudent decision to start early with decisive action and measures to support profitability," said CFO Sandra Dembeck. "Although it's not crystal clear how consumer spending will play out in the final quarter, we are working hard to execute and deliver on our strategic priorities and financial outlook."

Zalando confirms outlook

Zalando confirms its guidance provided on 23 June 2022 for the financial year 2022 with gross merchandise volume expected to grow three percent to seven percent to 14.8 billion to 15.3 billion euros. Revenue is expected to grow zero to three percent to 10.4 billion to 10.7 billion euros with an adjusted EBIT of 180 million to 260 million euros. The company now expects to reach the lower end of these ranges.

The third-quarter 2022 financial report, as well as the earnings presentation for analysts and investors, is available on the Zalando Investor Relations website. Zalando will report the results for the full year 2022 on March 7, 2023.(AFP)