Zalando bounces back with stronger growth at end of 2018
Online fashion retailer had been hit by unseasonally warm weather
Zalando returned to its customary high growth rates at the end of last year, as the Berlin-based online fashion retailer lifted revenues 25 per cent to €1.7bn and posted a slight increase in adjusted core earnings to €117.8m.
The results signalled a bounce-back from the group’s disappointing third quarter, which saw Zalando fall into a loss and sales growth decline sharply to just 12 per cent. Zalando blamed the poor performance on the unseasonally warm weather, which had encouraged customers to delay purchases of high-value goods such as jackets and coats. The news sparked a sharp fall in the group’s share price from which it has yet to recover.
Ruben Ritter, Zalando’s co-chief executive, said in a statement: “2018 had its challenges, but we focused our efforts in the fourth quarter to pull off a strong finish to the year. Our performance in the fourth quarter gives us confidence that our long-term growth plans are well on track.”
For the full zear, Zalando reported a 20 per cent rise in sales to €5.4bn, and adjusted earnings before interest and tax (ebit) of €173.4m.
Zalando - which is widely seen as the most successful group to have emerged from Berlin’s start-up scene - said it had 26.4m active customers at the end of last year, up from 23.1m at the end of 2017. Traffic to the Zalando site increased to 3.1bn visits, up from 2.6bn in 2017.
Looking ahead to 2019, Zalando said it expected to achieve adjusted ebit of €175m-€225m, and an increase in sales at the lower end of the 20-25 per cent range.