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Zalando lifts profit forecast as site visits soar

Zalando lifts profit forecast as site visits soar
FILE PHOTO: The logo of fashion retailer Zalando is pictured at the new headquarters in Berlin, Germany, April 10, 2019. REUTERS/Hannibal Hanschke -
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Hannibal Hanschke(Reuters)
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BERLIN (Reuters) – Zalando, Europe’s biggest online-only fashion retailer, raised its full-year profit outlook on Thursday after it reported a big jump in the number of visits to its site and orders in the second quarter.

Zalando has seen its profitability squeezed of late as it has invested heavily in logistics and technology to speed delivery, and as average order size has fallen, a trend it has sought to counter through a range of measures.

The number of active customers rose 15% to 28.3 million in the second quarter in Zalando’s 17 European markets, while site visits jumped by more than a third, 84% of which came through mobile devices.

Adjusted earnings before interest and taxation (EBIT) came in at 102 million euros (£92.9 million) on sales up 20.1% to 1.567 billion euros, versus average analyst forecasts for 95 million and 1.6 billion euros respectively.

It raised its outlook for adjusted EBIT to the “upper half” of the previously targeted range of between 175 million and 225 million euros. It said it expects revenue growth “around” the low end of a 20-25 percent range, instead of “at” the low end.

Last month, British rival ASOS warned on profits for the third time since December, saying problems ramping up warehouses in the United States and Germany had restricted product availability, hitting sales and raising costs.

(Reporting by Emma Thomasson; Editing by Thomas Seythal and Michelle Martin)

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