Zalando Lifts Fiscal Year Guidance On Q1 Results

Zalando SE expects revenue growth for fiscal 2015 to come in on the higher end of its 20-25 per cent target corridor, or slightly above, after a stronger than expected first quarter The company, which has emerged as Europe's leading online fashion retailers, also raised its adjusted EBIT margin guidance to around 4.5 per cent for the fiscal year.

“We have started full speed into the financial year 2015 and the results in the first quarter mark a new record. We are optimistic about the remainder of the year,” said Rubin Ritter, Member of the Management Board. “In the coming months, we will continue to invest into optimizing our customer experience and into strengthening our international growth. The opening of our tech hub in Dublin in April was only a first step.”

Because of the strong start to the spring/summer season revenues in the first quarter rose by 28.5 per cent to EUR 644 million (Q1 2014: EUR 501 million) and thereby exceeded the expected target corridor of 20-25 per cent. Growth was particularly strong in Zalando’s international markets. Revenue in the segment Rest of Europe grew by 37.1 per cent to EUR 265 million (Q1 2014: EUR 193 million).

In the DACH segment, Zalando’s revenues exceeded expectations, rising by 22.3 per cent. The DACH segment continues to lead in terms of profitability, with an adjusted EBIT margin of 9.3 per cent (Q1 2014: -0.1 per cent). In total, the adjusted Group EBIT margin increased by 9.1 percentage points to 4.5 per cent or an adjusted EBIT of EUR 29 million (Q1 2014: EUR -23 million or -4.5 per cent). The positive EBIT development was primarily due to the improved gross margin.

The number of active customers continued to re-accelerate quarter-on-quarter with 0.7 million additional active customers in the first quarter of 2015 to a total of 15.4 million (Q4 2014: 14.7 million, or a 14 per cent increase over Q1 2014 with 13.5 million). The gross merchandise volume per active customer increased by 11 per cent from EUR 175 in the first quarter of 2014 to EUR 193 in the first quarter of 2015. Zalando’s websites registered 393 million visitors in the first quarter of 2015 with more visits from mobile devices (53 per cent in Q1 2015) than from desktop devices. The Zalando app, which was awarded the International World Business Shop Award, was downloaded 8.5 million times by the end of Q1 2015.

Table 1: Zalando Group – Revenues and adjusted EBIT (EUR million)

¹ DACH segment is comprised of Germany, Austria, and Switzerland.
² Rest of Europe segment includes all other countries in which Zalando presently operates.
³
All other sales channels are grouped into the segment Other, which
mainly includes Zalando Lounge and the Zalando outlet stores in Berlin
and Frankfurt.
⁴ Adjusted to exclude equity-settled stock based compensation costs.

Zalando sell more than 1,500  international brands ranging from popular
global athletic and outdoor brands, to fast fashion and local brands, in addition to its own
private label products. It localizes its offering to address the distinct
preferences of customers in each of the 15 European markets it
serves: Austria, Belgium, Denmark, Finland, France, Germany, Italy,
Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Poland
and the United Kingdom. It fulfills orders from three centrally
located fulfillment centers in Germany.

Zalando’s websites attract well over 100 million
visits per month. In the fourth quarter 2014, 48 per cent of traffic
came from mobile devices, resulting in close to 15 million active
customers by the end of the quarter.