BERLIN — Zalando lowered its sales and profit outlook for the full year after second-quarter sales came in below expectations, despite a record number of active customers and orders during the period.
Group sales rose 20.9 percent to 1.33 billion euros, while adjusted earnings before interest and taxes, or EBIT, gained 14.9 percent to reach 94 million euros. The Berlin-based e-tailer said second-quarter net income rose 4.2 percent to 51.8 million euros.
The second quarter’s performance came on the heels of losses in the first three months of the year, which, as previously reported, were largely driven by a late season start and ongoing investments in logistics, which will continue for the year.
While remaining within the bounds of its full-year guidance, Zalando is now expecting to hit the lower end of its target corridors. These call for revenue growth of 20 percent to 25 percent, and adjusted EBIT of 220 million euros to 270 million euros.
Zalando shares were down 7.3 percent in mid-morning trading on the MDAX index of German mid-cap stocks.
For the first six months of the year, group revenues totaled 2.53 billion euros, a gain of 21.4 percent, but net income fell 30.2 percent to 36.7 million euros and adjusted group EBIT was down 7.5 percent to 94.4 million euros. This corresponds to an adjusted EBIT margin of 3.7 percent, compared to 4.9 percent for the first six months of 2017.
Co-chief executive officer Rubin Ritter was enthusiastic about Zalando’s strong quarterly development in customer key performance indicators. Zalando booked 29 million orders in the second quarter, with active customers increasing by 15.9 percent to 24.6 million. These, in turn, ordered more frequently: more than four times a year, which is an all-time high.
He said the KPI development “shows that our engine is running extremely well. We’re excited to see that our customer-centric focus is paying off, despite a continued challenging fashion market.”
In a conference call on Tuesday morning, he said the Partner Program, which allows brands to sell directly on the Zalando platform “is one of the most important drivers of revenue growth, and we have given top partners even more leeway to trade on our platform.”
Other second-quarter milestones included the online fashion store’s launch in Ireland and the Czech Republic, bringing Zalando’s number of markets to 17 European countries. To further broaden access, the e-tailer also launched an English language version of Zalando in Germany and an Italian version in Switzerland.