BERLIN — Profitability is in sight for Zalando, Europe’s largest specialty fashion and footwear e-tailer.
The Berlin-based group significantly narrowed net losses in the third quarter to 518,000 euros, or $687,329, compared to 52.4 million euros, or $69.3 million, in the year-ago period.
Dollar figures are converted from euros at an average exchange rate for the periods in question.
Zalando booked an operating loss of 2.6 million euros, or $3.4 million, compared to 50.9 million euros, or $67.5 million, a year ago. Adjusted to exclude equity-settled stock based compensation costs, third-quarter group earnings before interest and taxes reached 4 million euros, or $5.3 million.
Zalando said the results were driven by improved operating efficiency across sales, fulfillment, marketing and administration functions.
Related Articles
You May Also Like
Sales for the quarter grew 24.2 percent to 501 million euros, or $671.8 million, despite a difficult start to the season due to unseasonably warm weather and what is typically a period impacted by markdowns.
Sales in Zalando’s core DACH market (Germany, Austria and Switzerland) increased 13.6 percent to 276 million euros, or $366.2 million, with its remaining 12 markets in Europe generating sales of 198 million euros, or $262.7 million, a gain of 40.4 percent.
RELATED CONTENT: WWD Earnings Tracker >>
Rubin Ritter, member of the management board, said that in view of “our successful development in the third quarter, we expect to reach slight group EBIT profitability for the full year.”
He forecast “a strong fourth quarter” and added the strong improvement of the bottom line was not just a temporary swing, but will continue through the year “putting the company in the context of profitable growth.”
Ritter further noted the quarter had been an eventful one, with the launch of a cooperative shop with Topshop and the rollout of express delivery in all its 15 European markets. The company also saw growth in mobile traffic, up 43 percent in the period, with 5.1 million app downloads by the end of the quarter. Zalando’s Web sites drew 322 million visits in the quarter, with the number of active customers increasing 15 percent to 14.1 million.
The six-year-old start-up made its stock market debut in Frankfurt on Oct. 1 with an initial issue price of 21.50 euros. At the close of the Xetra electronic trading platform based in Frankfurt Wednesday, shares gained 16.34 percent over Tuesday’s close, to hit 23.35 euros.