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Zalando posts strong profit growth in H1, reiterates outlook

By Prachi Singh

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Business

Zalando’s first half was marked with strong growth and profitability, which has led to its full-year adjusted EBIT margin guidance to 4-5.5 percent. While the second quarter revenues increased 25 percent to 916 million euros (1,022 million dollars) against 733 million euros (818 million dollars) in the same quarter last year, in the first half, revenues were 1,713 million euros (1,912 million dollars) compared to 1,376.6 million euros (1,536.7 million dollars).

"We are very proud of our first half results: They reflect strong customer momentum with strong growth at scale. Despite ongoing investments into our long-term growth strategy, our business showed increased strength and profitability," said Rubin Ritter, member of the Management Board.

New brand partnerships boost sales

Zalando said second-quarter adjusted EBIT almost tripled to 80.9 million euros (90.3 million dollars) with EBIT margin of 8.8 percent and first half adjusted EBIT reached 101.2 million euros (113 million dollars) with EBIT margin of 5.9 percent.

The revenue growth was supported by strong performance in the DACH region, which comprises of Germany, Austria and Switzerland. The region posted a revenue growth of 14.7 percent with revenues amounting to 471.4 million euros (526.3 million dollars). Revenues in Rest of the Europe increased 34.3 percent to 383.2 million euros (427.8 million dollars). First of revenues increased to 877.2 million euros (979.3 million dollars) in the DACH region and 717.7 million euros (802 million dollars) in Rest of the Europe.

Zalando revently partnered with some popular brands, including Fenty by Rihanna, Club Monaco, Ivyrevel, and Kate Spade. The company also ran a joint campaign with Ivy Park in Q2 2016, and will continue its collaborations with high-profile brands. At the trend show Bread & Butter by Zalando in September, Italian luxury label Marni will give a preview of its footwear collaboration created exclusively for Zalando, and Tommy Hilfiger's 'Tommy X Gigi' collaborative collection with Gigi Hadid will also debut at the event.

Based on the strong first half performance, the company reiterates its full year guidance of strong revenue growth at the upper end of its 20-25 percent growth corridor.

Picture:Zalando

Zalando