Zalando SE forecast Thursday revenue growth would grow 28-31 percent this year, or significantly above its initial 20-25 percent guidance.

The German-based online retailer reported revenues reached €733.0 million in the second quarter ended
June 30, up 34.1 percent (Q2 2014: €546.4 million). Adjusted EBIT was €30.2 million at group level, corresponding to an EBIT margin of 4.1
percent (Q2 2014: €35.1 million, 6.4 percent). Group EBIT was
adversely affected by a temporary increase in payment costs.

Though it describes itself as a fashion retailer, the Berlin-based
company offers apparel and footwear from most global athletic and
outdoor brands on its 15, country-specific sites across Europe.

“Zalando is powering ahead to take full advantage of the great opportunities in European fashion e-commerce,” said Rubin Ritter, member of the Zalando management board. “Thanks to our clear focus on customer satisfaction, we have delivered exceptional revenue growth at scale and improving profitability in the first half of 2015.”


Customer growth
The number of active customers grew strongly to a total of 16.4 million (Q2 2014: 13.7 million) in the second quarter, or by one million additional active customers compared to the first quarter 2015. Zalando registered 412 million visits in the second quarter of 2015 (Q2 2014: 323 million visits). Visits from mobile devices were up further to 57 percent during the second quarter. The Zalando app was downloaded about 11 million times by the end of the second quarter of 2015. Compared to 7,588 employees as of Dec. 31, 2014, the headcount rose by 1,491 to 9,079 employees as of June 30, 2015. The significant growth was primarily driven by hiring in the fulfillment centers and the tech departments.

First half results
Zalando’s revenues rose by 31.5 percent to €1.38 billion in the first half of 2015 (HY 2014: €1.05 billion), mainly driven by a considerably larger active customer base. In the German-speaking DACH segment, revenue grew by 27.6 percent to €758.1 in the first half of 2015 (HY 2014: €594.2 million). In the Rest of Europe segment, revenue grew by 37.8 percent from €399.3 million to €550.3 million. Revenues in the Other segment grew by 27.2 percent to €68.1 million (HY 2014: €53.6 million).

Zalando achieved clear profitability with an adjusted EBIT of €59.2 million in the first half of 2015, corresponding to an adjusted EBIT margin of 4.3 percent (HY 2014: €12.4 million, 1.2 percent). Adjusted EBIT in the DACH region was at €46.8 million or a margin of 6.2 percent (HY 2014: € 27.3 million, 4.6 percent). The Rest of Europe segment achieved break even with a margin of 1.2 percent or adjusted EBIT of €6.6 million (HY 2014: €-18.4 million, -4.6 percent). The segment Other recorded an adjusted EBIT of €5.8 million or a margin of 8.5 percent (HY 2014: €3.5 million, 6.5 percent).

Zalando raises revenue guidance for 2015

Following a strong spring/summer season, during the second quarter of 2015 revenues have continued to exceed expectations. Given its first half-year performance,  Zalando is now expecting to exceed its annual revenue growth corridor of 20-25 percent for 2015 and is increasing guidance to 28-31 percent. Guidance for 2015 adjusted EBIT margin remains unchanged at around 4.5 percent.

To enable continued growth and customer satisfaction, Zalando is building a third logistics hub in its native Germany, expanding capacity at the existing warehouse in Monchengladbach, Germany, as well as piloting its first satellite warehouse in Italy. Construction of the new hub in Germany, which will have similar capacity to Erfurt and Monchengladbach, is set to start in fall 2015, with completion of the first stage and manual operation planned for late 2016. Full capacity in Monchengladbach will be reached in the first half of 2017.

Together with a service provider, piloting Zalando’s first satellite warehouse in Italy is set to start in early 2016.