The German online retailer Zalando shows accelerating growth and improved profitability in the second quarter. The company says that its success is due in part to an expansion of its lifestyle offerings, with strong growth in Sports, Designer and Beauty, and in part to a boost in its assortment’s relevance, with new brands, investments in new AI-powered experiences to entertain customers, and an expanded B2B business. The number of active customers grew by 300,000 to 49.8 million from the end of the first quarter of 2024.
As SGI Europe reported earlier this year, Zalando was able to turn things around from a declining 2023 as early as the second quarter of 2024. The results demonstrate the progress in executing Zalando’s updated strategy, announced in March, to build the leading pan-European fashion and lifestyle e-commerce ecosystem around its two main growth vectors: business-to-consumer (B2C) and business-to-business (B2B).
Gross merchandise volume (GMV) rose 2.8 percent to €3.8 billion in the second quarter compared with a year ago. Revenue grew 3.4 percent to €2.6 billion compared with the prior-year period. Adjusted earnings before interest and taxes (adjusted Ebit) rose to €171.6 million in the second quarter, in line with market expectations, compared with €144.8 million a year earlier. The improvement in profitability was driven by successful inventory management and lower fulfillment costs, with the Ebit margin increasing 0.8 percentage points to 6.5 percent of revenue.
Zalando confirms its full-year guidance for 2024 and expects both GMV and revenue to grow 0 to 5 percent this year from 2023. The company will continue to focus on profitable growth, with continued margin progression. Adjusted Ebit is expected to be between €380 and €450 million.
“Our B2C customers are excited by the quality brands we are adding, spending time with our new digital tools and content, and embracing our expanding lifestyle offerings in areas such as Sports, Designer and Beauty,” said Robert Gentz, Zalando’s co-CEO. ”We also recorded double-digit growth in B2B, demonstrating that both our growth vectors are delivering.”
Zalando Q2 2024 report summarized
- Second-quarter gross merchandise volume (GMV) rises 2.8 percent to 3.8 billion euros, revenue increases 3.4 percent to €2.6 billion.
- Adjusted earnings before interest and taxes (adjusted Ebit) climbed to 171.6 million euros in the quarter, representing a margin of 6.5 percent.
- Business-to-consumer (B2C) sees strong growth in Sports, Designer and Beauty, while business-to-business (B2B) sales grows by 10.3 percent.
- Full-year guidance for 2024 confirmed.
- Plans to strengthen existing tech sites while adding a new complementary site in China’s tech-hub Shenzhen; agreement with OpenAI to continue deep collaboration and build more generative-AI for the fashion industry.
- Chief People Officer Dr. Astrid Arndt reappointed; Chief Financial Officer Dr. Sandra Dembeck not to renew her contract.
