BERLIN — Beat by the heat, Zalando has downwardly revised its full-year sales and earnings guidance for 2018.
This is the second time this quarter that Europe’s leading online platform for fashion and lifestyle has cut its guidance. Zalando said the unusually hot and long summer weather throughout Europe and the subsequently delayed onset of the fall-winter season, with typically full-price and higher-margin merchandise, were adversely effecting revenues and adjusted earnings before interest and taxes (EBIT).
Zalando now expects full-year sales to grow around the low end of its 20 percent to 25 percent target growth corridor – whereas previous guidance had pointed to the lower half of such a range – and an adjusted EBIT of 150 million euros to 190 million euros compared to its previous forecast at the lower end of a 220 million euro to 270 million euro target range. Capital expenditure and net working capital guidance remain unchanged.
All figures are preliminary and unaudited.
For the third quarter, Zalando management expects revenue growth and adjusted EBIT to be significantly below analyst estimates. Based on company-compiled median analyst estimates, these called for 19.8 percent revenue growth and an adjusted operative loss (adjusted EBIT) of 2 million euros.
Zalando noted that the company continues to outperform the overall fashion market. Rubin Ritter, co-chief executive officer, said: “Despite the challenging market environment, we continue to invest in growth and remain committed to our target of doubling the business by 2020.”
Zalando will report its financial figures for the third quarter on Nov. 6.