Zalando hasn't always had an easy time of it. However, according to their new press report, they are going gangbusters. The German fashion retailer is proving that, although things aren't always easy in the big online player world of Amazon et al, they have staying power and know how to keep their catwalks dressed in the black.
Zalando has grown their profitability, with a Gross Merchandise Volume (GMV) increase of 23.7% (€2.0 billion) and an adjusted EBIT of €102 million. Their earnings forecast has been raised for a full year as well, with an expected adjusted EBIT in the upper half of €175-€225 million range.
The full year GMV growth is holding steady between 20-25%, with sales growth around the lower end of the range.
Active Customer Increase
With an increase in active customers of 3.7 million (year-on-year) to 28.3 million customers in 17 European markets, their number of page views rose by 34.3% to 986.4 million, 84% coming from mobile devices. Even better is that Zalando's number of orders in the quarter rose to a new record high of 36.1 million.
Chief Financial Officer David Schröder says: "More customers than ever have chosen Zalando as their starting point for fashion. This shows that our focus on providing customers with the best shopping experience is paying off".
The Zalando Experience
Zalando is working on several initiatives to provide customers with even easier access to Europe's largest wardrobe: this summer the construction of a new logistics centre in the Netherlands will begin in order to supply customers in Western Europe more quickly in the future and to create the logistics capacities for further growth. In Germany, Zalando has doubled the number of parcels delivered the same or next day compared to the first quarter. In Switzerland, a first test has also started to deliver orders in the Zurich region on the same evening.
Expand That Range
In addition, Zalando is further expanding its product range. The focus is on expanding the premium segment, the range of sustainable fashion, the partner programme and cooperation with offline retailers. More than 1,300 stationary stores are already connected to the Zalando platform. The Zalando Outlets are showing to be successful (thanks for the great deal on a great backpack).
All of this is helping Zalando to gain further market share in the second quarter of 2019. To reiterate: the company increased its GMV by 23.7% to €2.0 billion. Sales rose by 20.1% to €1.6 billion. In the same period, Zalando achieved an adjusted EBIT of €102 million, corresponding to a margin of 6.4%.
"Our transformation into a platform continues to gain momentum. The growth of our partner program makes our product range even more attractive and diverse for customers. At the same time, this means that our GMV is growing significantly faster than sales - in line with our long-term strategy," says David Schröder.