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Zalando lowers expectations

Zalando lowers expectations
Shutterstock.com

Even Zalando is suffering from the corona crisis: although the fashion webshop still expects a double-digit growth, its expectations are now much lower than at the beginning of the year.

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Slower growth

For 2020, Zalando expects an increase in gross merchandise volume of 10?to 20?% and an increase in turnover that is a fraction lower. At the beginning of this year, the retailer was still expecting an increase in volume of 20?to 25?% and an increase in turnover of 15?to 20?%. Profits are also likely to be lower than anticipated: whereas the fashion company initially anticipated an operating profit (ebit) of between 225?and 275?million euros, the fashion company now expects it to be between 100?and 200?million euros.

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In the first quarter, Zalando saw its gross merchandise volume rise by 13.9?% to just under two billion euros. Turnover increased by 10.6?% to 1.52?billion euros, while the number of active customers grew by 17?% compared to the same period last year.

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Optimistic

The measures taken by many countries against the coronavirus in March caused a dip in consumer demand, Zalando says. The company recorded a write-down of 40?million euros on its inventories, resulting in an operating loss of 98.6?million euros. In the first quarter of last year there was still an operating profit of 6.4?million euros.

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In April, however, Zalando saw demand pick up again, making the fashion web store quite optimistic for the rest of the year. Last month, the number of new customers increased by 39?% on an annual basis.

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