Zalando increases its sales, but remains in the red

zalando continues in red numbers. The marketplace German has closed the third quarter of this year with its sales on the rise, but fattening its losses. Specific, the company’s turnover has increased by 2.9% in the third quarter of this year, reaching 2,349.1 million euros. For his part, the gross merchandise volume has increased by 7.1%, to 3,282.8 million euros.

For the first time in its history, as the company explained in the presentation of results, the number of active clients of Zalando has broken the barrier of 50 million peoples, up to 50.2 million customers, thanks to its loyalty program. In addition, the company has increased the average number of orders by 5.4%. Each user made 5.2 orders on average, 2% more. Nevertheless, the shopping basket fell by 2%, to 57.4 euros.

The Zalando EBIT It has also improved during this third quarter with an increase of 37.8% to 13.5 million euros. In this sense, the marketplace has indicated that the improvement is due to the introduction of the minimum order in new markets: “The introduction of a minimum order value has encouraged customers to increase the size of the shopping basket or pay the shipping fee. As a result, orders below the minimum value are now profitable.

During these three months, the company has also improved its expense item reducing costs by almost 100 million euros and has promoted measures to improve the efficiency of its logistics network in Europe, including inventory management.

The company, which has 700,000 products from more than 3,500 brands, has also increased its inventory by 39.8%, to 2,163 million euros. The movement is due to the preparation for the strong season in November and December.

Zalando continues to lose

However, despite these improvements, andZalando’s net income in the third quarter has continued to be negativenails on losses reaching 35.4 million euroscompared to the red numbers of 8.4 million euros for the same period last year 2021.

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“We will continue to navigate carefully through these turbulent times, driving measures to improve profitability, as well as strategic initiatives for the interaction with our clients”has declared Robert Gentz, CEO of Zalando.

“With consumer confidence at a new low and inflation continuing, it was a prudent decision to start early with decisive measures and actions to support profitability”he added, for his part, Sandra Dembeck, Zalando CFO.

By regions, Group sales in Germany fell by 0.4% in the third quarter, while in the rest of the world the turnover rose by 3.1%, to 1,176.6 million euros. At this point, Zalando explained that the improvement in sales is due to the first collaboration with Highsnobiety, which it acquired last June, as well as the alliance with Nike for the distribution of its products, in addition to the association with Sephora. .

Zalando maintains forecasts for the end of the year

Despite this new fall, in terms of profitability, with a view to the next end of the year, the German company has confirmed its growth forecasts that it established last Junealthough he expects them to remain in the lower range.

Estimates of zalando They go through closing this 2022 with a GMV that grows in the range of 3 to 7%, up to between 14,800 and 15,300 million euros. A growth that they estimate will end up translating into revenues that remain between 0 and 3% growth, between 10,400 and 10,700 million euros; and in an adjusted EBIT of between 180 to 260 million euros. An amount much lower than the forecasts of between 430 and 510 million estimated at the end of the 2021 financial year, which since zalando They completed with an EBIT worth 468.4 million euros.

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