Zalando grows

The adjusted EBIT of EUR 20.3 mln remained at a similar level to previous years (Q1 2016: EUR 20.2 mln) with a margin of 2.1 pct (Q1 2016: 2.5 pct).

Zalando recorded 617.6 mln hits on its site in Q1 2017 compared to 479.5 mln a year before. Around 68.8 pct were from mobile devices (Q1 2017).

“Our key priority is profitable growth, and that is what we delivered on in the first quarter,” said co-CEO Rubin Ritter. “We are determined to win further market share and reach more customers across Europe. That is why we will continue investing in the consumer experience, our technology and logistics infrastructure, as well as our brand partner proposition,” he added.

Zalando had more than 20 mln active customers at the end of the first quarter 2017. The high customer baseresulted in more frequent orders, reflecting a more loyal shopping behavior. The increase was also, strengthened by the increasing use of mobile devices. This translated into growth of revenues up by 28 pct. to EUR 428.3 mln across Europe (excluding German-speaking countries) compared to EUR 334.5 mln in Q1 2016. Outside German-speaking countries margins were negative (-4.5 pct) but down from the previous year’s -5.1 pct. However the company recorded a margin of -0.2 pct for the full year.

The strong growth rate was also supported by prominent marketing campaigns such as the “Man Box" campaign with US actor James Franco and the addition of further highly fashionable brands such as Oysho.

Zalando continued to push forward strategic investments into its infrastructure as well as customer and brand proposition. Examples include the ramp-up of new fulfilment centres and investments such as same day delivery and instant returns to enhance Zalando’s customer experience. The resulting increase in fulfilment costs and a small decrease in gross margin were mostly offset by more efficient marketing activities, benefitting from a strong brand awareness and loyal customer base.

Capital expenditure in the first quarter of 2017 was at EUR 78 mln, excluding M&A, reflecting investments primarily in infrastructure and in-house developed software. Zalando is looking to increase capital expenditure to around EUR 200 mln in 2017, excluding M&A.

Zalando will report results for the second quarter 2017 on August 10, 2017.