By Mauro Orru
Zalando lowered its forecasts for the year as it expects pressure on demand to continue.
The German online fashion retailer now expects a revenue fall between 3% and 0.5% this year, while its gross merchandise volume–a key indicator of sales performance–could shrink 2% or grow up to 1%.
The group had previously expected revenue to fall by up to 1% or grow by up to 4%, while gross merchandise volume was expected to rise by 1% to 7%, though both metrics were more likely to come in the lower half of the ranges.
Zalando enjoyed turbo-charged growth during the pandemic as coronavirus restrictions forced consumers to shop online. However, the easing of the pandemic and the lifting of those restrictions last year meant shoppers are now back in stores.
The company late Wednesday posted revenue of 2.27 billion euros ($2.40 billion) for the three months to the end of September, down 3.2% on year. Gross merchandise volume slipped 2.4% to EUR3.20 billion.
Zalando said it was grappling with a challenging macroeconomic environment, low consumer sentiment and declining online sales. Warm September weather in Europe also weighed on sales, as shoppers didn’t buy heavier clothes as they usually do in the season.
The group’s net loss narrowed to EUR8.2 million from EUR35.4 million last year. Adjusted earnings before interest and taxes–Zalando’s preferred measure of profitability–rose to EUR23.2 million from EUR13.5 million, generating a 1% adjusted margin.
For 2023, Zalando continues to expect adjusted earnings between EUR300 million and EUR350 million.
Write to Mauro Orru at [email protected]
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