Zalando Achieves Q1 Profit Growth and Expands Premium Brand Offerings
In the first quarter of 2024, German online fashion retailer Zalando saw a swing to operating profit, with adjusted earnings before interest and taxes (EBIT) reaching 28.3 million euros, compared to a near break-even result in the same period last year. Despite this increase in profitability, the company reported a slight decrease in revenue to 2.24 billion euros, down 0.6% from the previous year, and a net loss of 8.9 million euros, which is an improvement from the 39 million euro loss reported in the same quarter the previous year.
The retailer's gross merchandise volume (GMV) rose by 1.3% to 3.3 billion euros, marking a return to growth after three quarters of decline. This growth was attributed to an improved assortment of goods, growth in lifestyle offerings, and an increase in logistics partners, along with more efficient inventory management and lower fulfillment costs. The firm also expanded its Business-to-Consumer (B2C) offerings, particularly in the Beauty, Sports, Kids & Family, and ‘Lounge by Zalando’ categories, and launched new functionalities like voice-enabled customer assistance.
Despite the fall in revenue and a decline in active customers to 49.5 million from 51.2 million a year earlier, Zalando has confirmed its full-year guidance for 2024, expecting both GMV and revenue to grow by 0% to 5% compared to 2023. The company's strategy focuses on building a leading pan-European fashion and lifestyle e-commerce ecosystem, with an emphasis on quality and customer experience, rather than competing on price. This approach includes leveraging its platform and logistics network as a service to other retailers and brands.
