The Berlin online fashion retailer Zalando SE was able to increase its sales slightly in the third quarter of the 2022 financial year, but also had to accept a significantly higher loss. In view of the difficult framework conditions, the e-commerce specialist is now more cautious in its forecasts for the year as a whole. This emerges from an interim report that the company published on Thursday.
According to this, Zalando generated sales of 2.35 billion euros in the months of July to September, which corresponds to an increase of 2.9 percent compared to the same quarter of the previous year. The total gross merchandise volume (GMV) grew by 7.1 percent to 3.28 billion euros. The company also highlighted that it had more than fifty million active customers for the first time in the past quarter. “This is a great milestone in Zalando’s history,” said co-CEO Robert Gentz in a statement.
The net loss increases to around 35 million euros
Despite austerity measures and other initiatives to increase profitability, such as the introduction of a minimum order value, the company had to post a larger loss. The deficit before interest and taxes (EBIT) was 7.4 million euros and thus 62.6 percent above the corresponding level of the previous year, the net loss jumped from 8.4 to 35.4 million euros.
However, adjusted for special effects, EBIT improved from 9.8 to 13.5 million euros, explained Zalando. Co-CEO Gentz confirmed the company’s course: “In this challenging market environment, we will continue to act prudently and drive forward measures to improve profitability. We are focusing on strategic initiatives to offer our customers even more inspiration,” he explained.
In the first nine months of the current year, sales reached a level of EUR 7.18 billion and were thus slightly below the corresponding level of the previous year (-1.1 percent). The EBIT adjusted for special effects fell from 287.2 to 39.1 million euros, the bottom line was a reported net loss of 82.7 million euros, after a surplus of 146.5 million euros had been achieved in the same period of the previous year.
Management expects full-year results “at the lower end” of the forecast ranges
Despite the currently adverse market situation, the management basically stuck to the forecasts it had already lowered in June. However, the results would probably be “at the lower end” of the respective forecast ranges, the company explained.
CFO Sandra Dembeck explained the current situation: “The consumer climate has reached a new low and inflation is still high. Therefore, we took early and consistent measures to strengthen our profitability,” she said in a statement. “It is unclear how consumer spending will develop in the fourth quarter. We continue to work hard to achieve our strategic and financial goals.”