Zalando H1 2017 results: revenues grew strongly by 21.5% to EUR 2,080.7 million

  • Half-year revenue up 21.5% to EUR 2,080.7 million, adjusted EBIT at prior year level of EUR 102.1 million, 4.9% margin
  • Second quarter revenue up 20.1% to EUR 1,100.5 million, adjusted EBIT at prior year level of EUR 81.8 million, 7.4% margin
  • Full-year revenue growth expected in upper half of 20-25% growth range, adjusted EBIT margin in lower half of 5-6% range
  • Expansion of European fulfillment footprint with further sites in Poland and Italy

BERLIN, 2017-Aug-11 — /EPR Retail News/ — Zalando grew revenues in the first half of 2017 strongly by 21.5% to EUR 2,080.7 million (HY 2016: EUR 1,712.6 million). Adjusted EBIT remained on prior year levels at EUR 102.1 million with a margin of 4.9% (HY 2016: 101.2 million, 5.9% margin). For the full year, Zalando expects revenue growth in the upper half of its guided range of 20-25% and an adjusted EBIT margin in the lower half of the 5-6% range.

As part of its continued growth initiatives, Zalando plans to expand its European fulfillment network with two large fulfillment centers in Poland and Italy. Zalando already operates sites of a similar size in Erfurt, Mönchengladbach and Lahr (Germany), and prepares to launch initial operations in Gryfino near Szczecin (Poland) in the third quarter of 2017. These are complemented by smaller fulfillment centers in Brieselang near Berlin, as well as localized warehouses in Stradella near Milan, Moissy-Cramayel near Paris, and by the end of the year in Brunna near Stockholm.

Co-CEO Rubin Ritter said: “We firmly believe that growth is the right strategy to increase the value of our business. Our updated guidance reflects our focus on growth at solid profitability levels. It is in our DNA to continuously evaluate additional investment opportunities, test ideas, and then start scaling them. This can range from assortment additions to our recently launched customer loyalty program Zalando Zet.”

Zalando strongly executed on its platform strategy during the past quarter: The company launched Zalando Fulfillment Solutions with Bestseller as first flagship partner, allowing fashion brands access to its logistics infrastructure and know-how. The transactions of Anatwine and KICKZ were closed in the second quarter. Anatwine is a software solution developer that enables fashion brands to sell merchandise on marketplaces.

With the addition of KICKZ, a multi-channel basketball retailer, Zalando strengthened its sports and lifestyle segment, especially in the area of basketball. The assortment was further expanded with Nike, Lacoste, Pepe Jeans and Esprit joining the Zalando Partner Program.

In the second quarter of 2017, revenues grew by 20.1% to EUR 1,100.5 million. Main drivers were a growing active customer base as well as an increase in average orders to 3.7 times per year, marking another all-time high and indicating strengthened customer loyalty. Active customers increased by approximately 800,000 to 21.2 million compared to the previous quarter, the strongest increase since the fourth quarter 2015.

Adjusted EBIT came in at prior year level of EUR 81.8 million or a margin of 7.4% (Q2 2016: EUR 80.9 million, 8.8% margin). A slightly lower gross margin and increased fulfillment cost could not be fully offset by improved marketing cost. The increase in fulfillment cost is primarily attributable to higher logistic costs, as Zalando continued with its convenience investments around fast delivery and returns, plus further ramp-up of capacity and automation at its various fulfillment sites.

Capital expenditure in the first half of 2017 was EUR 130 million, excluding M&A, reflecting investments primarily into infrastructure and in-house developed software. Zalando aims for about EUR 250 million in capital expenditure in 2017, excluding M&A.

Zalando’s half-year report and the earnings presentation for analysts and investors is available on the Zalando Investor Relations website. Zalando will report results for the third quarter 2017 on November 7, 2017, and publish a trading update prior to that. The publication date of the trading update will be announced in due time.

ABOUT ZALANDO
Zalando (https://corporate.zalando.com) is Europe’s leading online fashion platform for women, men and children. We offer our customers a one-stop, convenient shopping experience with an extensive selection of fashion articles including shoes, apparel and accessories, with free delivery and returns. Our assortment of almost 2,000 international brands ranges from popular global brands, fast fashion and local brands, and is complemented by our private label products. Our localized offering addresses the distinct preferences of our customers in each of the 15 European markets we serve: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Poland and the United Kingdom. Our logistics network with four centrally located fulfillment centers in Germany allows us to efficiently serve our customers throughout Europe, supported by warehouses in Northern Italy and France with a focus on local customer needs. We believe that our integration of fashion, operations and online technology give us the capability to deliver a compelling value proposition to both our customers and fashion brand partners. Zalando’s shops attract about 200 million visits per month. In the second quarter of 2017, 70 percent of traffic came from mobile devices, resulting in 21.2 million active customers by the end of the quarter.

CONTACT ZALANDO:
René Gribnitz
Vice President Communications
rene.gribnitz@zalando.de

Alexander Styles
Financial Communications
alexander.styles@zalando.de
+49 30 20968 2022

Source: Zalando

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