BERLIN — Ongoing investments in infrastructure and the customer experience continued to put a strain on Zalando’s earnings performance in the third quarter, but that isn’t stopping the online giant from expanding into a new category: beauty.
In preliminary figures released Wednesday, the Berlin-based online platform said it expects to report adjusted earnings before interest and taxes for the quarter ending Sept. 30 ranging between a loss of five million euros and a gain of five million euros. It is aiming for an EBIT margin of minus 0.5 percent and plus 0.5 percent during the period.
For the same period a year ago, adjusted EBIT totaled 20 million euros, corresponding to an EBIT margin of 2.3 percent.
Zalando said sales continued to grow, with third-quarter revenues expected to reach 1.06 billion euros to 1.08 billion euros, a gain of between 27.5 percent and 29.5 percent.
Final figures for the quarter will be released on Nov. 7.
Europe’s leading online fashion platform for women, men and children said it will enter the beauty market in spring 2018. While details were not yet divulged, Zalando said it will start selling a range of beauty products that could include cosmetics, skin care or fragrances, and spanning various price points. The new category will first be launched in Germany, with other markets in Zalando’s 15-country playing field to follow if the introductory phase is successful.
“The expansion into the beauty market is a natural next step and reflects the demands of our customers,” said Rubin Ritter, co-chief executive officer of Zalando.
He also noted that the company continues “to push forward with our growth strategy at full speed, winning market share. Our results for the third quarter underline once again that our strong business expansion is driven by ongoing investments into our technology and logistics infrastructure, brand partner proposition and consumer experience.”