Zalando remains in the red. The German online fashion distribution company, one of the largest in its sector by turnover, ended the third quarter of the year with sales up but widening losses.
Specifically, the company’s turnover increased by 2.9% in the third quarter of the year, up to EUR 2,349.1 million. On its part, gross merchandise volume it grew by 7.1%, to 3,282.8 million euros.
For the first time in its history, the number of active customers of Zalando exceeded fifty million people, up to 50.2 million customers, thanks to the loyalty program, as the company explained in the presentation of the results. In addition, the company increased the average number of orders by 5.4%.
Zalando recorded a loss of EUR 35.4 million in the third quarter
The company’s EBIT also improved in the period, with an increase of 37.8%, to EUR 13.5 million. The company explained that the improvement was due to the introduction of a minimum order in new markets, which they extended last May with the aim of reimbursing costs.
“The introduction of a minimum order value encouraged customers to increase their cart size or pay a delivery fee,” the company specified.. “As a result, orders below the minimum value are now profitable,” Zalando added.
In addition, during this period the company improved the expenditure item, reducing costs by almost one hundred million euros and promoted measures to improve the efficiency of its logistics network in Europe, including inventory management.
With everything, the company’s net result in the period is still negative, with losses of 35.4 million euroscompared to the red figures of 8.4 million euros in the same period last year.
During that period, the German company exceeded fifty million active users
“We will continue to navigate carefully through these turbulent times, launching measures to improve profitability as well as strategic initiatives to interact with our customers,” said Robert Gentz, one of Zalando’s CEOs, in presenting the results.
“With consumer confidence at low levels and inflation continuing, it was a wise decision to start early with decisive measures and actions to support profitability,” added Sandra Dembeck, the company’s chief financial officer.
By region, Group sales in Germany fell by 0.4% in the third quarter year, while in the rest of the world the turnover in that period increased by 3.1%, to 1,176.6 million euros. Zalando explained that the progress in sales is due to the first cooperation with Highsnobiety, which it concluded last June, and the alliance with Nike for the distribution of its products, in addition to the connection with Sephora.
At the end of the year, the German company confirmed its growth forecasts it set last June, although he expects to remain in the lower ranks. Zaland’s estimates go through the fact that gross merchandise volume grow between 3% and 4%, sales remain stable or increase by 3%, and ebitd is between EUR 180 million and EUR 260 million.