- Second quarter Gross Merchandise Volume (GMV) flat compared to Q2 2021 at 3.8 billion euros, revenue of 2.6 billion euros (-4% YoY) and adjusted EBIT of 77.4 million euros
- Zalando Plus grew 164% year-over-year, exceeding 1.5 million members
- Successfully executing action plan to adapt to current volatile environment, with improved profitability expected for the second half of the year
- Continuing to invest through cycle to drive deeper engagement with customers and growth in the partner business, notably with investment in Highsnobiety
Zalando, a leading online platform for fashion and lifestyle in Europe, expects improved profitability and a return to growth in the second half of the year, confirming its outlook for the full year. In the second quarter the number of active customers grew steadily to over 49 million (11% YoY). In its progress to deepen customer relationships, the company’s loyalty program, Zalando Plus, grew 164% year-over-year, with now over 1.5 million members.
Robert Gentz, Co-CEO at Zalando, says: “We have demonstrated our agility as a team, showing that we can react quickly to adapt to the current environment while also making the experience of our customers even more inspiring and engaging. We continue to grow our customer base and are fully focused on our strategy and making selective investments across our business to ensure our long-term growth.”
Zalando is progressing with its strategy to be the Starting Point for Fashion by deepening customer relationships and strengthening its relationships with partners to drive the growth of its platform business model. In the second quarter, Zalando invested in elevating the customer experience, notably in Beauty which grew over 30% year over year. Zalando launched its Plus membership program in Switzerland, and expanded to Romania and Hungary, increasing its footprint to 25 markets. Additionally, Zalando Lounge launched in Romania, Slovakia and Lithuania. In June, Zalando acquired a majority stake in Highsnobiety, one of the most influential fashion and lifestyle media companies in the world. Highsnobiety’s fashion authority, curation and storytelling expertise, combined with Zalando’s innovative platform and reach will create an inspirational and engaging experience for both consumers and brands.
As part of its action plan to adapt to the current volatile market environment, Zalando is adjusting its offering to meet changing customer demands for the upcoming seasons. To improve order economics, a minimum order value was introduced in 15 additional markets at the beginning of June and is now live in all 25 markets. In its aim to adjust its cost base, Zalando reduced its marketing spend and drove efficiency improvements across its European logistics network.
“We are focused on efficiency and margin improvement measures that will help us strengthen our profitability in the second half of the year. Our healthy balance sheet allows us to continue to invest into our technology platform and logistics infrastructure to enable our long term growth trajectory.” says Dr. Sandra Dembeck, Chief Financial Officer at Zalando.
The company’s gross merchandise volume in the second quarter of 2022 came in at 3.8 billion euros, showing a flat development, compared to an extraordinarily strong second quarter 2021, amid a challenging macroeconomic environment due to headwinds from external factors, notably lower consumer confidence, inflationary pressures and selected supply shortages impacting availability. Revenue fell by 4% to 2.6 billion euros mainly due to the transition of the business to a platform model. Zalando reported an adjusted EBIT of 77.4 million euros, resulting in a margin of 3%.
Zalando confirms its guidance provided on 23 June 2022 for the financial year 2022 with Gross Merchandise Volume (GMV) expected to grow 3-7% to 14.8-15.3 billion euros. Revenue is expected to grow 0-3% to 10.4-10.7 billion euros with an adjusted EBIT of 180-260 million euros in the same period. Capital expenditure is expected to be in the range of 350-400 million euros.
The Q2 2022 financial report, as well as the earnings presentation for analysts and investors, is available on the Zalando Investor Relations website. Zalando will report the results for the third quarter 2022 on November 3, 2022.
