Zalando: we are much better prepared than earlier in the year
Zalando SE, the European online platform for fashion and lifestyle, achieved exceptional profitable growth in the third quarter of 2020.
Gross Merchandise Volume (GMV) and revenue grew by 29.9 % and 21.6 % to 2.5 billion and 1.8 billion euros, respectively. The strong growth was, in particular, driven by the accelerated consumer demand shift towards digital offerings in the course of the ongoing coronavirus pandemic, as well as the strong performance of Zalando’s Partner Program and Zalando Lounge.
In the same period Zalando achieved an adjusted EBIT of 118.2 million euros or a margin of 6.4 percent. Significantly improved cost of sales and efficiency gains in fulfillment drove profitability in the third quarter. As a result of the exceptionally strong sell-through in the spring/summer season, Zalando released inventory valuation allowances in the amount of 35 million euros, creating a positive one-time effect on profitability.
David Schröder, Chief Financial Officer, says: “As the second coronavirus wave is starting more forcefully than anticipated, we are much better prepared than earlier in the year. Our Starting Point for Fashion strategy continues to enable us to turn the accelerated consumer demand shift towards digital offerings into business opportunities for Zalando and its partners. We will continue to invest to drive strong growth beyond 2020 following our key strategic priorities: growing our active customer base, deepening customer relationships and driving our platform transition.”
As a result of its strong financial performance, Zalando raised its outlook for the 2020 financial year on October 8, 2020. The company now expects gross merchandise volume (GMV) to grow 25-27%, revenues to grow 20-22% and an adjusted EBIT of 375-425 million euros. In its outlook published on July 15, 2020, Zalando previously assumed GMV growth of 20-25 percent, revenue growth of 15-20 percent and adjusted EBIT of 250-300 million euros for the full year.