Zalando Profits from Pandemic Lockdown, Raises Guidance

Zalando saw its third-quarter revenues jump 21.6 percent to hit 1.84 billion euros, compared to 1.52 billion euros over the same period last year. For the first nine months of this year, Zalando’s revenues totaled 5.41 billion euros.

Zalando’s position “continues to enable us to turn the accelerated consumer demand shift towards digital offerings into business opportunities,” the company’s chief financial officer, David Schröder, said in a statement.

The e-commerce platform, which looks on track to become the Amazon of fashion in Europe, now expects revenue to grow by between 20 and 22 percent and EBIT to end up between 325 to 375 million euros for the year. That is around 5 to 7 percent higher for expected revenue and 125 million euros more for EBIT than the company’s earlier forecasts.

Zalando’s EBIT came to 105.1 million euros in the third quarter versus minus 6.9 million euros in the year-ago quarter. For the first nine months of 2020, Zalando’s adjusted EBIT has more than doubled, rising to 231.5 million euros, compared to 114.5 million euros in 2019.

Over the third quarter, Zalando had 35.6 million active users, saw 1.26 billion site visits and made 44 million sales, reflecting increases of 20.7, 26.8 and 26.7 percent respectively, compared to the same period in 2019. Almost all – 87.2 percent – of these came via mobile phones.

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The average basket rose 2.4 percent after several comparatively static quarters, to 57.20 euros per basket.

Zalando has argued that a better measure of its success as a platform is Gross Merchandise Volume, or GMV, which indicates how much stock it has shifted. GMV has seen steady growth and the pandemic has accelerated that. Over Q3, GMV grew 29.9 percent to 2.45 billion euros. During the third quarter of last year, GMV only 24.3 percent and totaled 1.89 billion.

The company says that the good results in GMV were fueled by strong growth in the company’s partner program, where brands use Zalando’s platform, logistics and marketing services to sell, and its shopping club, Zalando Lounge. Volumes at the partner program almost doubled during the third quarter and Zalando Lounge grew by 50 percent, the company reported.

Thanks to the pandemic, Zalando had also seen growth in its Connected Retail scheme, which allows brick-and-mortar stores to sell via the platform. Around 2,000 stores are already attached to the scheme and Zalando wants to triple this by 2021.

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