Zalando’s profit boosted by sports offering, improved inventory

Online fashion marketplace Zalando reported an 18.5% rise in its operating profit for the second quarter on Tuesday (6 August), helped by improved inventory and lower order fulfilment costs, as its sports, designer and beauty segments drove growth.

Zalando has focused on higher-priced brands and the growing sportswear category, along with scaling up its partner business, as it faces competition from fast-fashion retailers with cheaper offerings such as Shein.

Shares in Zalando were indicated up 7.3% in Lang & Schwarz pre-market trade.

Quarterly adjusted earnings before interest and tax (EBIT) rose to 171.6 million euros ($187.9 million) from 144.8 million in the same period last year, Zalando said.

Its qross merchandise volume (GMV) — a key revenue metric measuring the total value of all goods sold — rose 2.8% on the year to 3.8 billion euros in the second quarter, while revenue was up 3.4% at 2.6 billion euros.

Zalando said it had launched sports campaigns in major European cities in the quarter, featuring athletes including soccer players Robert Lewandowski and David Alaba, as it sought to capitalize on events such as the UEFA Euro 2024 soccer tournament and Olympic Games this summer.

It also introduced its first own sports collection, consisting of 14 pieces.

Zalando’s number of active customers grew by 300,000 to 49.8 million compared to the first quarter, it said. The number, however, remained below the 50.5 million it recorded in the second quarter last year.

Zalando also said Chief Financial Officer Sandra Dembeck had decided not to renew her contract beyond the current term ending on February 28 2025.

The group reiterated that it expects its GMV and revenue to be in line with last year’s figures or to grow by up to 5% in 2024, while its adjusted EBIT should come between 380 million and 450 million euros.