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May 12, 2015
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Zalando more optimistic for 2015 after strong quarter

May 12, 2015

Europe's largest dedicated online fashion retailer Zalando lifted its forecast for sales and profit growth for 2015 on Tuesday after an early start to the spring and less discounting drove a strong first quarter.

The company, which had already rushed out better-than-expected preliminary results last month, said it now expects full-year sales to rise at the top end or slightly above the 20-25 percent corridor it had previously predicted.

It lifted its target for an adjusted operating margin to 4.5 percent from a previous expectation to stay around the level of 3.7 percent it recorded in 2014.

Zalando shares, which listed in Frankfurt last October at 21.50 euros and have already risen 10 percent this year, traded up 0.4 percent to 28.11 euros by 0758 GMT.

The company founded in 2008, which only moved into the black at the end of last year, reported first-quarter earnings before interest and tax (EBIT), excluding stock-based compensation costs, of 29 million euros ($32.57 million), compared with a year-earlier loss of 23 million.

The Berlin-based firm also said sales accelerated from the previous quarter to rise 28.5 percent to 644 million euros, with growth stronger than it expected in its core markets of Germany, Austria and Switzerland.

Management board member Ruben Ritter said the rise was driven by an early start to spring as well as less discounting than a year ago due to Zalando becoming more nimble in responding to trends like booming demand for sneakers.

"In the second quarter, the positive momentum continues," he told a conference call for journalists, adding he expected that the period would also be helped by the imminent launch of sales on its site of garments from U.S. chain Gap.

The firm, which now ships 1,500 brands to customers in 15 countries, has said it expects to increase its staff to about 10,000 by the end of 2015 from around 8,000 now, hiring particularly in the tech and logistics field.

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