Zalando hails progress in Q1

Zalando was back in growth mode in Q1, at least as far as gross merchandise volume (GMV) was concerned with a rise of 1.3%, the German e-tail giant said on Tuesday.

It added that adjusted earnings before interest and tax (adjusted EBIT) increased to €28.3 million in the quarter, representing a margin of 1.3%.

Business-to-Consumer (B2C) saw the strongest growth, boosted by Beauty, Sports, Kids & Family as well as ‘Lounge by Zalando’. Business-to-Business (B2B) added more multi-channel fulfilment partners and grew revenue by 13%.

Looking in further detail, the company said it “delivered growth and improved profitability in the first quarter as it boosted the quality of its assortment, saw strong growth in its lifestyle offerings, made the customer experience more inspirational and added more logistics partners. The results are a validation of Zalando’s updated strategy, announced in March, to build the leading pan-European fashion and lifestyle e-commerce ecosystem around its two main growth vectors: Business-to-Consumer (B2C) and Business-to-Business (B2B)”.

GMV reached €3.3 billion in the first quarter compared with a year ago. But revenue was €2.2 billion, down from €2.3 billion in the prior-year period. 

Adjusted EBIT rose to €28.3 million in line with market expectations and representing a margin of 1.3%, compared to and loss of €0.7 million in the prior-year period. It remained loss-making on a net basis at €8.9 million, but this was much better than the prior year’s €39.5 million net loss.

“As we are executing our ecosystem strategy, we are excited by the positive response from customers and partners in the first quarter. We are returning to growth,” said CFO Sandra Dembeck. “B2C customers are showing increased interest in our quality assortment, digital tools, propositions and inspiring content. B2B customers are signing up for our unique offering. Both of our growth vectors are strong and contributing to results, demonstrating the strength of our plans.”

Zalando’s B2C strategy sees it expanding further as a lifestyle destination by “elevating existing categories into distinct propositions”. This  showed strong results in the quarter. 

As part of the new, elevated Designer experience on the website and app, the company partnered with British-Japanese musician and actor Rina Sawayama as a new ambassador for its Designer offering. Zalando also launched an exclusive co-designed capsule collection called “Cinema Club” in collaboration with the Italian designer brand Aspesi.