📈 Strong Quarterly Performance
Zalando reported an 18.5% increase in quarterly adjusted EBIT, reaching €171.6M ($187.5M), exceeding analysts' expectations by 3%. Gross merchandise volume, a key metric for the value of all goods sold, rose 2.8% year-on-year to €3.8B ($4.15B). Revenue also saw a 3.4% increase, driven by double-digit growth in the sports category, CFO Sandra Dembeck highlighted.
🎯 Strategic Focus on Sports and Beauty
Zalando has strategically focused on expanding its sports and beauty categories, which significantly boosted its profits this quarter. The company launched new sports brands, including Lululemon, Hoka, and On Running, and even introduced its own sportswear collection. The company capitalized on major events like the UEFA Euro 2024 and the Olympic Games, with campaigns featuring sports stars such as Robert Lewandowski and David Alaba.
💼 Market Reaction and Future Outlook
Zalando's strong performance led to a significant rise in its stock, with shares initially jumping 7% and later stabilizing at a 2% increase, priced at €22.43. This positive market reaction reflects investor confidence in Zalando's strategic shift towards higher-priced brands and its effective inventory management, which has positioned the company to compete with low-cost rivals like Shein.
🚀 Growth Expectations for 2024
Looking ahead, Zalando expects its gross merchandise volume and revenue to grow between 0% and 5% for the year, with adjusted earnings projected between €380M and €450M. Active customers increased for the first time since 2022, reaching 49.8M. The company anticipates continued acceleration in the second half of 2024. However, CFO Sandra Dembeck will not renew her contract beyond February 2025, signaling upcoming leadership changes.
How will Zalando's focus on sports impact its market position?
