Zalando boosted by consumer shopping shifts in Q3, swings to profit
The company reported gross merchandise value (GMV) rising 29.9% to €2.455 billion, and group revenue rose 21.6% to €1.849 billion. Adjusted group EBIT was up from €6.3 million to €118.2 million and net income was €58.5 million after a net loss of €13.6 million in Q3 last year.
Those figures came as site visits rose 26.8% and mobile visits also increased as a percentage of the total, reaching 87.2% from 84.8%. It now has 35.6 million active customers, up from 29.5 million a year ago and other metrics also outperformed with order numbers rising nearly 27% and the average orders per active customer up 3.3%. The average basket size has also risen by 2.4%, although this is understandable in a quarter when many consumers were unwilling to shop in physical stores.
The German company said the strong GMV growth was “driven by the accelerated consumer demand shift towards digital offerings in the course of the ongoing coronavirus pandemic, as well as the strong performance of Zalando’s Partner Program and Zalando Lounge”.
It added that as a result of the exceptionally strong sell-through in the spring/summer season, it released inventory valuation allowances of €35 million, creating a positive one-time effect on profitability.
The company had raised its outlook for the 2020 financial year last month and now expects gross merchandise volume (GMV) to grow 25-27%, revenues to grow 20-22% and an adjusted EBIT of €375-€425 million.
CFO David Schröder added: “As the second coronavirus wave is starting more forcefully than anticipated, we are much better prepared than earlier in the year. Our Starting Point for Fashion strategy continues to enable us to turn the accelerated consumer demand shift towards digital offerings into business opportunities for Zalando and its partners. We will continue to invest to drive strong growth beyond 2020 following our key strategic priorities: growing our active customer base, deepening customer relationships and driving our platform transition.”
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