Zalando raises profit forecast after ‘exceptional’ sales boost

The German fashion platform recorded an adjusted EBIT of €118.2m (£106.4m) in the three months to September 30 with a margin of 6.4%.

It also saw a 29.9% increase in gross merchandise volume (GMV) to €2.5bn (£2.25bn) and a revenue increase of 21.6% to €1.8bn (£1.62bn), largely driven by the consumer shift to online amid the coronavirus pandemic.

Zalando hailed the strong performance of its Zalando Partner Programme and Zalando Lounge as contributing factors.

As a result of its third-quarter growth, the business has raised its outlook for the full year.

The retailer now expects a 25-27% growth in GMV, 20-22% growth in revenues and an adjusted EBIT of €375m-€425m (£338m-£382m).

As a thank you for their “performance during unprecedented times”, Zalando has given all 14,000 of its colleagues a €500 (£450) bonus.

Zalando said it plans to grow its network of connected bricks-and-mortar stores on the platform. It currently has 2,000 active stores and aims to triple this in 2021.

Chief financial officer David Schröder said: “As the second coronavirus wave is starting more forcefully than anticipated, we are much better prepared than earlier in the year. Our ‘starting point for fashion’ strategy continues to enable us to turn the accelerated consumer demand shift towards digital offerings into business opportunities for Zalando and its partners.

“We will continue to invest to drive strong growth beyond 2020 following our key strategic priorities: growing our active customer base, deepening customer relationships and driving our platform transition.”

Co-chief executive David Schneider added: “Across Europe, a new round of lockdown restrictions has been put in place to curb the spread of coronavirus during the commercially most relevant time of the year for many brands and retailers. More than ever, it is important for us to tackle this as a team, work even closer together and come out of the pandemic stronger together.”