The Online Fashion Retailer Reported a 3.4% Revenue Increase for the Second Quarter as It Pursues New Strategies
German online fashion retailer Zalando has reported significant improvements in key financial indicators during the second quarter of this year. During the period, Zalando’s revenues witnessed a 3.4 percent increase, reaching 2.64 billion euros.
This rise contributed to the retailer’s total revenues for the first half of the year, which grew by 1.5 percent, totaling 4.88 billion euros. The Gross Merchandise Value — a measure of how much inventory was moved on the platform and typically a higher figure than the company’s revenues — similarly saw an increase.
In the second quarter, Zalando’s GMV was recorded at 3.84 billion euros, a 2.8 percent increase, resulting in total sales of 7.13 billion euros worth of product for the first half of the year, which translates to 2.4 percent more than the same period last year.
In Q2 2023, both revenues and GMV had been either stagnant or negative, the growth this year marking a notable improvement. Besides, the company’s adjusted group EBIT (Earnings Before Interest and Taxes) saw an 18 percent ascend, from 144.8 million euros the previous year to 171.6 million euros, while operating costs fell.
Robert Gentz, co-chief executive officer of Zalando, shared in a statement that after more than a year of subdued growth, the company’s turnaround strategy is showing promising signs. “Our ecosystem strategy empowers us to cover a larger share of the fashion and lifestyle e-commerce market, and the positive response from customers and partners in the second quarter validates our vision,” he said.
The new strategy is centered around transforming Zalando into a lifestyle destination for customers and promoting products from categories such as beauty, sportswear, premium and luxury. Furthermore, the strategy entails streamlining logistics, providing online sales and fulfillment services to brands, and heightening the creation of inspirational magazine-style content to attract more shoppers.
However, some of Zalando’s other key indicators remained steady. The per-customer number of active customers and average orders fell 1.3 percent to 49.8 million, and 3.2 percent to an average of 4.9 orders per customer, respectively. The total number of orders during Q2 witnessed a slight rise of 0.3 percent to reach 63.4 million, while the average spending rose 4.6 percent to reach 60.8 euros.
Keeping the year’s projections in mind, Zalando commented, “The market continues to show gradual signs of recovery and we expect further acceleration over the course of the year.” The retailer’s annual forecast expects revenue and GMV to rise in the lower single digits, with the highest anticipated growth at 5 percent, and EBIT between 380 million and 450 million euros.