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Zalando posts drop in Q1 revenue

By Prachi Singh

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Business

Image: Zalando SE

Revenue at Zalando fell by 1.5 percent year-over-year to 2.2 billion euros in the first quarter, which the company said was mainly due to its transition to a platform model.

The German retailer’s gross merchandise volume rose slightly by 1 percent to 3.2 billion euros compared to strong growth in Q1 2021.

Zalando reported an adjusted EBIT of negative 51.8 million euros, corresponding to a margin of negative 2.4 percent, mainly due to reduced gross margin as a result of more promotional activities to attract customers and increased fulfilment costs.

Commenting on the company’s performance, co-CEO Robert Gentz said in a release: “We are managing Zalando for the long term and have always used our business agility and adaptability to successfully respond to short-term challenges and consumer demand to emerge better and stronger.

“We remain confident that we will achieve our ambition to reach more than 30 billion euros GMV by 2025.”

Zalando's customer count increases 5.2 percent

The company’s active customers increased by 5.2 percent year-over-year in the quarter to nearly 49 million, while Zalando Plus memberships increased by 150 percent.

The partner business share saw strong growth in the first quarter, accounting for 32 percent of fashion store GMV. Zalando said the company is well on track to reach its 2025 goal of having 50 percent of fashion store GMV generated by its partner business.

In order to offer customers faster delivery times, Zalando said it is adding more fulfilment centres in Frankfurt, Germany, Bydgoszcz, Poland, and in the Paris region in France.

Also, following market launches in six countries in 2021, Zalando will be launching in two new markets, Hungary and Romania, in May.

Zalando confirmed its full year 2022 guidance at the lower end of GMV growth of 16-23 percent and lower end of revenue growth of 12-19 percent.

The company expects to achieve an adjusted EBIT at the lower end of 430-510 million euros and capital expenditure between 400-500 million euros.

Zalando