Zalando stock gains on the back of strong Q3 results

After buoyant third quarter results, which saw a number of fashion retailers attributing a dip in sales and revenues to unseasonably warm weather, Zalando has signaled a profitable full year ahead which led to company's shares trading above their initial public offering price for the first time since its debut on the stock market last month.

The Berlin-based online fashion retailer witnessed its shares rise as much as 11 percent to 22.36 euros (27.87 dollars). After their intraday gain of 14 percent on the debut day, the company was constantly trading below the 21.50 euros (26.81 dollars), with the IPO price on the back of low investor response to e-commerce stocks.

After David Schneider and Robert Gentz founded the company six years ago, today saw Zalando valued at close to 5.4 billion euros (6.7 billion dollars). Now the company expects the revenues to grow by 25 percent in 2014, with strong expansion strategy planned for its newer markets. However, analysts caution that the company will have to keep a very tight control on costs to sustain growth in profit margins.

Zalando’s third quarter marked continued above-market growth and strong gains in profitability and capital efficiency. Group revenues grew by 24.2 per cent to 501 million euros (624.9 million dollars) in the third quarter compared to 404 million euros (503.9 million dollars) in the same quarter, last year.

The shares gained as much as 2.29 euros to 22.36 euros (2.86 dollars to 27.88 dollars) in Frankfurt and were up 9.6 percent at 22 euros (27.4 dollars) as of 10:46 a.m.