Companies

Growth in both B2C and B2B vectors confirms strong third quarter for Zalando

Nov 13, 2024 Germany

The German multi-brand online retailer has reported growth in both the B2C and B2B vectors, confirming the strong performance previously reported for the third quarter of the year

“Consumers love the quality brands we are adding, spend time with our exciting digital experiences, and embrace our expanding lifestyle offerings in areas such as Sports, Beauty and Kids & Family. To capture further growth opportunities, we are investing in initiatives such as evolving our Plus loyalty program, offering more inspiring content, ramping up our tech hub in China and driving localised convenience for customers via our European logistics network”, commented Sandra Dembeck, Chief Financial Officer of Zalando.

B2C Growth Vector

In the third quarter of the current year, revenue in the B2C growth vector amounted to 2.2 billion euros, an increase of 4.3% on a comparable basis to the same period last year. Its quarterly adjusted EBIT rose to 86.7 million euros, representing an adjusted EBIT margin improvement to 4.0% from 0.5% in the same prior year period, driven by improved gross margins and lower fulfilment costs.

Zalando recalled that, during this period, it added new brands such as Remain, A-COLD-WALL and Marine Serre to its curated range and evolved the Plus programme from a paid membership to a free, points-based system designed to reward customer loyalty. It is also working to transform its sports, beauty and kids & family categories “into powerful lifestyle propositions with comprehensive assortments, personalised inspiration and seamless convenience”.

B2B Growth Vector

In the third quarter of 2024, this vector’s revenue increased by 11.1% to 239.7 million euros, as compared to the same period a year ago. Its adjusted EBIT fell from 12.6 million euros to 6.7 million euros, representing an adjusted EBIT margin of 2.8%, as compared to 5.8% a year prior. The decrease was mainly caused by frontloaded investments to support future growth.

In the B2B growth vector, the German online retailer aims to expand the value proposition for its partners by opening its logistics infrastructure, software, and service capabilities to be a key enabler for brands and retailers’ e-commerce transactions, regardless of whether they take place on or off its platform.

Third Quarter Results

As previously reported, in the third quarter of 2024, the company’s gross merchandise volume (GMV) increased by 7.8% to 3.5 billion euros and total revenue increased by 5.0% to 2.4 billion euros, on a comparable basis to the same period last year. Zalando also confirmed that its number of active customers rose by half a million to 50.3 million in this period.

In addition, its adjusted earnings before interest and taxes (adjusted EBIT) grew significantly from 23 million euros to 93 million euros, with the adjusted EBIT increasing from 3.9% to 2.9 percentage points, reflecting the company’s improved operational efficiency.

Zalando confirmed its previous guidance for the full year. It expects GMV to grow between 3% and 5%, compared to a previous guidance of 0% to 5%, and revenue to grow between 2% and 5%. At the same time, adjusted EBIT is expected to reach between 440 and 480 million euros, reflecting the company’s continued momentum.

Image Credits: corporate.zalando.com

Germany ecommerce Online Quarter Results Results Zalando