Zalando upgrades guidance after strong second quarter
Online fashion retailer Zalando has upgraded its full year guidance after achieving strong sales in its second quarter.
The company now expects to grow its GMV by 20% to 25% and revenue by 15% to 20%. It is also forecasting an adjusted EBIT of €250 million to €300 million.
According to preliminary figures, Zalando’s second quarter GMV increased by 32% to 34% to between €2.67 billion and €2.71 billion while group revenue rose by 26% to 28% to €2.01 billion to €2.05 billion. Zalando is expecting its adjusted EBIT to be in the range of €200 million to €220 million compared to €101.7 million at the same time last year.
Zalando attributed the performance to its “decisive” response to the coronavirus crisis and a well-handled strategy implementation. The company also benefited from more people choosing to shop online during the pandemic and attracted more than three million new customers. Zalando said its flash sales business, Zalando Lounge, saw record levels of traffic and revenue growth in the quarter.
Zalando chief financial officer David Schröder said:“The high number of new customers shows that we offer a compelling customer experience in these challenging times. Due to prevailing health and safety concerns, customers generally like to shop online, and they particularly like to shop with us. As a result, we were able to successfully scale our platform business in the second quarter and to make significant progress in building the starting point for fashion in Europe.”
Zalando also achieved strong growth in its partner programme as brands and retailers increased their online activities and connected more stock to the Zalando platform. The programme attracted around 180 new partners which meant its GMV grew more than 100% year-on-year. The company has now signed up H&M Group owned ARKET to the programme.
In addition, the company is expanding its successful Connected Retail initiative to Spain, Sweden and Poland this month. The programme enables customers to shop from local bricks-and-mortar retailers who make their stock available through the Zalando platform. Currently, more than 1,800 stores in five markets sell directly to Zalando customers.
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