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Zalando posts first quarter revenue decline

Zalando increased its gross merchandise volume by 1% to €3.2 billion in its first quarter as its number of active customers rose by 5.2% to nearly… View Article

FASHION

Zalando posts first quarter revenue decline

Zalando increased its gross merchandise volume by 1% to €3.2 billion in its first quarter as its number of active customers rose by 5.2% to nearly 49 million.

However, revenue declined by 1.5% to €2.2 billion following the retailer’s transition to a platform model. In addition, Zalando reported that adjusted EBIT fell by €51.8 million, mainly due to reduced gross margin as a result of more promotional activities and increased fulfilment costs.

The retailer said rising inflation and increased costs for households has led customers to be more cautious. It also revealed that they are shopping for more seasonal and trend-based items and are choosing either high-end products or shifting from mid-market towards entry prices.

As a result, Zalando said its full year guidance for 2022 will be at the lower end of GMV growth of 16-23% and lower end of revenue growth of 12-19%. The retailer also expects to achieve an adjusted EBIT at the lower end of €430 to €510 million.

Robert Gentz, Zalando co-chief executive, said: “Our business fundamentals are strong, and we are taking steps to improve our results. We are managing Zalando for the long term and have always used our business agility and adaptability to successfully respond to short-term challenges and consumer demand to emerge better and stronger. We remain confident that we will achieve our ambition to reach more than €30 billion GMV by 2025.”

Zalando is working to add more fulfilment centres as it looks to strengthen its logistics networks. It is also planning to launch in the two new markets of Hungary and Romania in May.

Sandra Dembeck, Zalando chief financial officer, said: “We are continuing to invest through the cycle to drive long term value. We are expanding our logistics network and advancing our platform to better serve our customers and partners, enable sustainable future growth and set us up for long-term success.”

 

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