Zalando revenue and profits rise as it continues to execute growth strategy

Zalando has delivered continued growth and improved profitability in the second quarter, with revenues up 3.4% to £2.2 billion (€2.6 billion) compared to the prior-year period.

The performance demonstrates the company’s progress in executing its updated strategy to build a pan-European fashion and lifestyle e-commerce ecosystem around its two main growth vectors: Business-to-Consumer (B2C) and Business-to-Business (B2B).

It comes as Zalando expands its lifestyle offerings with growth in sports, designer and beauty, boosted the relevance of its assortment with new brands, invested in new AI-powered experiences to entertain customers and expanded its B2B business.

During the second quarter, the retailer reported a 2.8% rise in gross merchandise volume (GMV) to £3.2 billion (€3.8 billion).

It also saw adjusted EBIT increase to £147 million (€171.6 million), compared to £124 million (€144.8 million) a year earlier.

The improvement in profitability was driven by successful inventory management and lower fulfilment costs, with the EBIT margin increasing 0.8 percentage points to 6.5% of revenue.

Looking ahead, Zalando expects both GMV and revenue to grow 0-5% this year compared to 2023. The company said it will continue to focus on profitable growth, with continued margin progression. Adjusted EBIT is expected to be between £325-385 million (€380-450 million).

Robert Gentz, Co-CEO of Zalando, said: “Our ecosystem strategy empowers us to cover a larger share of the fashion and lifestyle e-commerce market, and the positive response from customers and partners in the second quarter validates our vision.

“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. We also recorded double-digit growth in B2B, demonstrating that both our growth vectors are delivering.”

The trading update comes as Zalando confirms the reappointment of Dr. Astrid Arndt as its Chief People Officer for another four-year term.

Arndt will now have a broader remit, with the additional mandate of strengthening the company’s corporate functions to enable the “effective execution of Zalando’s ecosystem strategy”.

The reappointment of Arndt secures “strong continuity” in Zalando’s Management Board. With Co-CEOs Robert Gentz and David Schröder, as well as Co-founder David Schneider, having all recently committed to continue in their roles until 2027.

However, Chief Financial Officer Dr. Sandra Dembeck has decided not to renew her contract beyond her current term which ends on 28 February 2025, as she is “embracing a new career opportunity”.