Zalando trims outlook after disappointing quarter

Europe's biggest pure online fashion retailer Zalando trimmed its sales and profit outlook for the full year after quarterly results fell short of analyst expectations even though it reported a record number of active customers.

Photo: Reuters

Second-quarter sales rose 21 percent to 1.33 billion euros (£1.19 billion), while adjusted earnings before interest and taxation (EBIT) rose 15 percent to 94 million euros, both slightly short of average analyst forecasts.

Co-Chief Executive Rubin Ritter said the fashion market remained challenging in the quarter, but noted that key performance indicators were strong, including a rise in active customers to 24.6 million.

Shares in Zalando dropped 6 percent in early Frankfurt trade , making them the biggest decliners on Germany's MDAX index.

Data from the TextilWirtschaft trade magazine suggests the apparel market in Zalando's home base of Germany was broadly flat in the second quarter.

Zalando said it now expects full year revenue growth in the lower half of its 20 to 25 percent target range, while adjusted EBIT should come in at the low end of the 220 to 270 million euro range it had previously guided for.

British rival Asos also missed analysts' forecasts for sales growth in its latest trading period, saying it had reined in marketing efforts as it focused on ramping up warehousing space in Germany and the United States.

Zalando is also spending heavily on logistics as it expands, with capital expenditure at 109 million euros in the first half and expected to reach around 350 million for the full year.

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