Zalando, the German online fashion retailer, has adjusted its guidance for the year following lower revenue in the second quarter. Despite facing a challenging environment with a shift towards in-store shopping, Zalando remains optimistic about its future prospects.

Second Quarter Performance

In the second quarter, Zalando reported a revenue of 2.56 billion euros ($2.80 billion), representing a 2.5% decrease compared to the previous year. Furthermore, the gross merchandise volume, a crucial indicator of sales performance, slipped by 1.8% to EUR3.72 billion.

Improvements in Profitability

Despite the decline in revenue, Zalando managed to achieve a net profit of EUR56.6 million, surpassing last year's figure of EUR14 million. Adjusted earnings before interest and taxes (EBIT), which Zalando considers its preferred measure of profitability, increased significantly from EUR77.4 million to EUR144.8 million, resulting in a 5.7% margin.

Focus on Efficiency

Chief Financial Officer Sandra Dembeck highlighted Zalando's ongoing efforts to drive sustainable efficiencies in fulfillment and marketing. These initiatives have proven to be successful, with adjusted EBIT almost doubling in the second quarter.

Revised Outlook for 2023

Zalando has revised its outlook for the year 2023. While revenue could potentially experience a decline of up to 1% or grow by up to 4%, gross merchandise volume is expected to rise by 1% to 7%. However, Zalando predicts that both metrics are more likely to fall within the lower range of these projections. Adjusted earnings are now expected to range between EUR300 million and EUR350 million, rather than the previously guided range of EUR280 million to EUR350 million.

Write Your Comment