Zalando-Zentrale in Berlin.
Monika Skolimowska/picture alliance via Getty Images
The fashion retailer Zalando has been pursuing consistent austerity measures for months in order to make the company profitable. The founders Robert Gentz and David Schneider succeeded in doing this. Zalando still did not meet investors’ expectations.
Zalando’s austerity measures continued to have an impact at the beginning of the year. The online fashion retailer was back in the black in day-to-day business due, among other things, to lower logistics costs and significantly limited the bottom line loss. Adjusted for special effects, Zalando earned 28.3 million euros before interest and taxes (EBIT) in the first quarter, after there was a small deficit in the same period of the previous year. But analysts had hoped for a little more. The net loss fell from 38.5 million euros to 8.9 million euros, as the DAX group announced on Tuesday in Berlin.
Zalando benefited from the better weather, which enabled an early start to the spring/summer season. The gross merchandise value (GMV) climbed by 1.3 percent to around 3.3 billion euros. However, the effect was not evident in sales, which fell by 0.6 percent to 2.03 billion euros. Analysts on average had also hoped for more in terms of sales.
Management confirmed the annual forecast. Due to the ongoing slump in consumption, sales and gross merchandise value (GMV) are likely to remain at the previous year’s level in the worst case scenario. In 2023, Zalando recorded 14.6 billion euros as gross merchandise value and generated 10.1 billion euros. Co-CEO Robert Gentz and CFO Sandra Dembeck also predict an increase of up to five percent. The adjusted operating profit (EBIT), on the other hand, is expected to rise to 380 to 450 million euros – after almost 350 million in the previous year.