The online retailer Zalando presented figures for the past year on Tuesday. The online retailer has recently suffered significantly from a sluggish consumer mood. The high inflation caused consumers to be very reluctant to buy, especially in the medium-priced segments. The company, which used to be so spoiled for growth and once a winner in the Corona crisis, was faced with declining sales and falling profitability. High inventories in the industry and the resulting further increase in competition mean that Zalando is also subject to high discount pressure.
Zalando assumes low consumer demand
The company launched a savings program to ensure profitability. This also includes the elimination of hundreds of jobs, as the two co-chairs Robert Gentz and David Schneider announced in a letter to employees at the end of February. The two admitted that they had grown too quickly in some areas in the past few years and had inflated structures too much.
The gross goods volume is expected to increase in 2022 at the lower end of the range of three and seven percent to 14.8 to 15.3 billion euros. The company sees sales stagnating or, in the best case, increasing by three percent to 10.7 billion euros. With regard to the adjusted operating result (EBIT), management also assumes that it will only reach the lower end of the range of EUR 180 to 260 million that has been announced. Zalando had already significantly reduced its original goals last June.
Zalando expects consumer demand to remain low in 2023, but profitability is expected to make progress. This is to be achieved, for example, through gains in efficiency, cost savings and cutting back on marketing.
Analysts only expect a slight increase in sales
Analysts expect a comparatively flat fourth quarter. The last three months of the year are the most important and most profitable for retailers with their Christmas business and the associated large campaign days. Zalando is working against a high comparison basis from the previous year.
In a consensus compiled by the Bloomberg news agency, analysts only assume a slight increase in sales from 3.1 billion to almost 3.2 billion euros on average. Adjusted EBIT is likely to fall from a good 181 million to 151 million euros. For the year as a whole, the experts expect sales of 10.36 billion euros, almost at the same level as the previous year. They see the adjusted EBIT falling from around 468 million to 157.4 million euros. The bottom line is that Zalando should also earn a lot less than the 234.5 million euros achieved in the previous year at almost 40 million euros.
Medium-term prospects promising
Anne Critchlow from Societe Generale was quite optimistic about future developments. After the slump that followed the corona pandemic, the online fashion retailer is now in better shape again. In the medium term, the prospects are promising. For 2023, she still expects a cautious sales forecast. Credit Suisse analyst Simon Irwin expects Zalando to scale back its discounts in 2023, manage operational expenses better and further adjust its purchasing model to become more flexible.
The analyst estimate compiled by Bloomberg expects sales to increase to almost 10.9 billion euros in 2023. Adjusted EBIT should improve again to 279 million euros.
Oddo BHF analyst Andreas Riemann is convinced that in view of the slowdown in inflation, it is time for a fresh look at German fashion and sports brands and their retailers. He expects earnings to recover in the second half of 2023 and in 2024. (dpa)