Zalando lowers outlook as consumer confidence dips

Zalando SE has issued an update for the second quarter 2022 and revised its guidance for the financial year 2022 as the company said, macroeconomic conditions have further deteriorated during the second quarter of 2022 with the EU consumer confidence index decreasing further in June.

For the second quarter 2022, management expects gross merchandise volume (GMV) growth, revenue growth and adjusted EBIT to be significantly below analyst estimates as of May 31, 2022 of 5 percent GMV growth, 1.5 percent revenue growth, and a 104 million euros adjusted EBIT. The company added that the second quarter is profitable but weaker than expected.

Commenting on the revised outlook, Robert Gentz, Zalando’s co-CEO, said: “While this new environment is creating a negative impact on our financial performance, our strategy and long term goals are unchanged."

Zalando lowers full year guidance The company’s previous outlook, from early May, pointed to the lower end of full year guidance based on anticipated challenges but also early signs of a potential recovery. Management now expects macroeconomic challenges to be longer lasting and more intense than previously anticipated.

As the company no longer assumes a rebound of consumer confidence in the short-term, it is updating its guidance for the full year 2022. The company now expects GMV to grow 3 percent to 7 percent to 14.8 to 15.3 billion euros for the financial year 2022. Revenue is expected to grow between 0 percent to 3 percent to 10.4 to 10.7 billion euros with an adjusted EBIT of 180 to 260 million euros in the same period. Capital expenditure is expected to be in the range of 350-400 million euros.

The revised full year outlook implies an acceleration of growth and a significant improvement in profitability in the second half of 2022 based on an ongoing company wide effort to adjust the offer to changing customer demand and to drive efficiencies across all cost lines.

The company will publish its financial figures for the second quarter on August 4, 2022.