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Zalando posts strong Q3, reiterates upgraded outlook

By Prachi Singh

3 Nov 2021

Business

Image: Zalando, Facebook

Zalando grew its third quarter GMV by 25.3 percent to 3.1 billion euros, slightly above the company’s mid-term target growth corridor of 20-25 percent. Revenues grew in the same period by 23.4 percent to 2.3 billion euros. The company said in a release that strong customer acquisition and the continued positive development of existing customers have been key growth drivers.

Zalando grew its active customer base by 30.1 percent to 46.3 million by the end of the third quarter 2021. The company’s adjusted EBIT reached 9.8 million euros in the third quarter, corresponding to a margin of 0.4 percent, and thus a more normalized level of profitability compared to the exceptional result recorded in the third quarter of 2020.

Commenting on the company’s performance, Robert Gentz, Zalando’s co-CEO, said: “Throughout the year we progressed strongly across all areas of our strategy, always keeping our focus on our long-term vision to be the Starting Point for Fashion and build a truly sustainable platform business with more than 30 billion euros in GMV by 2025.”

Highlights of Zalando initiatives

On its path to be the Starting Point for Fashion, the company launched six markets in the second and third quarter of 2021 with locally tailored assortment, digital experience and convenience - including local payment, delivery and return options. Zalando continues the international roll-out of its subscription-based loyalty program Zalando Plus, enhancing the program for French customers and expanding to the Netherlands and Italy.

The company also launched brand collaborations with brands such as Adidas, Levi’s, Dr. Martens or The North Face. The company added that Zalando will focus on engaging customers across multiple propositions. Significantly accelerating the partner business beyond Germany will be a key driver of the company’s further platform transition.

Zalando reiterates upgraded outlook

The company has reiterated its upgraded outlook for the financial year 2021. GMV is expected to grow by 31-36 percent to 14 to 14.6 billion euros, and revenues are expected to grow by 26 to 31 percent to 10.1 to 10.5 billion euros.

Based on an outstanding topline performance and continued return rate benefits in the first half of this year, the company expects adjusted EBIT in the upper half of the guided range of 400-475 million euros.