Zalando has reported growth and increased profitability in the second quarter (Q2) of 2024, driven by a diverse expansion of its offerings and strategic investments in technology.
Key highlights include a 2.8% rise in gross merchandise volume (GMV) to €3.8bn ($4.14bn) and a 3.4% increase in revenue to €2.6bn.
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Adjusted earnings before interest and taxes (EBIT) climbed to €171.6m, reflecting a 6.5% margin, compared to €144.8m in the same period last year.
The company attributes its improved profitability to effective inventory management and reduced fulfilment costs, with the EBIT margin rising by 0.8 percentage points.
Zalando’s active customer base increased by 300,000, reaching 49.8 million from the end of the first quarter of the year.
Business-to-consumer performance
In the business-to-consumer (B2C) segment, Zalando saw growth in its Sports, Designer, and Beauty categories.
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By GlobalDataRevenue from B2C rose 2.8% to €2.4bn, with an adjusted EBIT of €165.2m, achieving a 6.8% margin.
Key initiatives included localised and personalised convenience offerings, such as reducing delivery times in Sweden to one to two days and launching an adaptive sports collection under private labels Pier One Sports and Even&Odd active.
Zalando also enhanced its lifestyle proposition by leveraging the ‘Summer of Sports’ momentum, featuring sports icons in campaigns across major European cities, leading to record sports sales in June.
Business-to-business growth
Zalando’s business-to-business (B2B) segment experienced a 10.3% increase in revenue, reaching €233.8m, though adjusted EBIT fell to €7.1m from €15.5m due to upfront investments.
The company expanded its ZEOS platform to Switzerland, increasing the number of markets served to 12, and introduced a new shopping club sales channel.
Technological investments and strategic collaborations
Zalando continues to invest in its technological capabilities, planning to strengthen its existing tech sites and establish a new site in Shenzhen, China.
The new site aims to combine local expertise in social commerce with Zalando’s European market knowledge.
Additionally, Zalando has extended its collaboration with OpenAI to develop generative AI solutions for the fashion industry.
Leadership
The company announced the reappointment of Astrid Arndt as chief people officer for another four-year term starting 1 September 2024.
However, CFO Sandra Dembeck will not renew her contract beyond 28 February 2025 as she pursues new career opportunities.
The continuity of the leadership team, with commitments from co-CEOs Robert Gentz and David Schröder and co-founder David Schneider until 2027, ensures stability for Zalando’s strategic direction.
Outlook
Zalando confirms its full-year guidance for 2024, expecting GMV and revenue growth between 0% and 5%.
The company aims to focus on profitable growth, with an anticipated adjusted EBIT range of €380m to €450m, underscoring its commitment to enhancing its market position and delivering value to customers and partners.
