At Zalando, Growth Slows as Lockdown Shopping Boom Ebbs

Cathrin Schaer
·3 min read

Zalando, one of Europe’s largest online fashion retailers, reported revenues in the third quarter of 2.28 billion euros, a 23 percent gain compared to the same period in 2020 and a slowdown from earlier in the year.

For the first half of this year Zalando had averaged revenue growth of 40.5 percent. The slowdown this quarter brings the company back to more normal levels. For all of last year, revenue grew 23.1 percent. The slowdown comes mostly as a result of the fact that brick-and-mortar stores are open again in Europe.

More from WWD

The company’s results were slightly better then expected by market analysts.

“We are pleased to see our strong performance continue in the third quarter, the first quarter with economies fully reopened,” the company’s chief financial officer, David Schröder, said in a statement.

Zalando primarily measures its success via gross merchandise value, or GMV. This accounts for how much stock the platform has moved, as opposed to income from services like logistics and marketing. GMV is always higher than revenues.

For Q3, Zalando saw growth of 25.3 percent in GMV to 3.08 billion euros, also reflecting more usual levels of growth. While in 2020, the platform’s GMV grew 30.4 percent over the whole year, in 2019, GMV only increased by 24.3 percent.

At the same time, the company acknowledged that its costs were also rising. Zalando’s adjusted group EBIT – earnings before interest and taxes – were 9.8 million euros. This represents a margin of 0.4 percent of revenues.

That’s a huge difference compared to the same quarter last year when EBIT was 118.2 million euros and represented 6.4 percent of revenue. But, as the company’s statement conceded, the number is also “very much in line with the third quarter of 2019 … the last third quarter recorded before the pandemic.”

In Q3 2019, EBIT was 6.3 million euros and also represented 0.4 percent of Zalando’s revenues.

Other key indicators for Zalando are the numbers of site visits, active customers and orders, all of which continued to rise over Q3.

The number of active customers – that is, shoppers who use the platform at least once a year – rose 30.1 percent to 46.3 million. Before the pandemic, at the same time in 2019, Zalando only had 29.5 million active customers.

Site visits, the overwhelming majority of which come via mobile phone, continued to rocket up, increasing 91 percent to 1.7 billion in the third quarter compared to the previous year. This is almost double the number of visits the company was getting pre-pandemic, in 2019, when it recorded 1 billion site visits in Q3.

Zalando also recorded an all-time high in how much customers were spending per purchase and how many times they were buying via the site. The average basket size rose to 57.5 euros, from 57.2 euros per purchase at the same time last year. Average orders also peaked at 5.1 orders per active customer.

Despite the slowdown, Zalando did not change its forecast for the full year. It had raised expectations in the first quarter and is holding firm to predictions of revenue growth between 26 and 31 percent for the year, with a target of 10.1 billion to 10.5 billion euros and an EBIT close to 475 million euros. It also forecast GMV would grow 31 to 36 percent to hit between 14 billion and 14.6 billion euros.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting

Recommended Stories

  • Zillow to stop flipping homes for good as it stands to lose more than $550 million, will lay off a quarter of staff

    Zillow Group Inc. is calling it quits on the home-flipping business, while disclosing losses of more than $550 million on sales this year for which the company paid too much.

  • Warren Buffett says this is the best type of business to own when inflation spikes — in other words, what you should buy right now

    Inflation is high. You might as well profit from it.

  • Seeking at Least 7% Dividend Yield? This Analyst Suggests 3 Dividend Stocks to Buy

    We’re about halfway through earnings, and of the S&P-listed companies that have reported, more than 80% are beating the forecasts for earnings, revenues, or both. Wall Street is predicting that Q3 profits will grow more than 35% year-over-year. On another positive note, US consumer confidence rose last month, with an October print of 113.8, better than the expectation of 108, and beating the September reading of 109.8. The October gain marks a reversal of a three-month fall. Watching the situati

  • Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought

    Cathie Wood likes to hit the new trading week running. The ARK Invest CEO added to some of her positions on Monday. Zoom Video Communications (NASDAQ: ZM), Toast (NYSE: TOST), and Genius Sports (NYSE: GENI) are three stocks (down 45%, 25%, and 13% from their highs, respectively) that found their way into Wood's buy orders.

  • NBA Player Asks Investors for $1 Million. They’re Offering $9,700

    More than a year ago Charlotte Hornets forward PJ Washington Jr. and investment firm SportBLX started offering investors a unique way to, as their tagline says, “Go beyond being a sports fan.” How? Give the now-23-year-old money that he will invest how he sees fit and share in any eventual profits. The goal: Raise $1.07 […]

  • Plug Power (PLUG) Expected to Beat Earnings Estimates: What to Know Ahead of Q3 Release

    Plug Power (PLUG) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

  • Zillow stock dives after analyst highlights two-thirds of homes bought are underwater

    Shares of Zillow Group Inc. took a dive Monday, after KeyBanc analyst Edward Yruma highlighted how most of the homes the real estate services company purchased, with an aim to flip them, were now worth less than what they paid for them.

  • Why Dell Stock Got Cut in Half Today

    If you haven't been paying close attention to Dell Technologies (NYSE: DELL) stock lately, you may have woken up to a shock today. At a share price of $55.12 as of 10:45 a.m. EDT, Dell shares seem to have been cut in half overnight, after closing at $111.51 per share Monday evening. Instead, what happened is that yesterday after close of trading, Dell completed the spinoff of its 81% stake in VMware (NYSE: VMW), effectively dividing the company into two stand-alone companies and distributing a total of 310.9 million shares of VMware (and a boatload of cash) among Dell shareholders.

  • A former Goldman Sachs boss says millennials were right to splurge their stimulus checks on crypto and meme stocks, and to stick it to Wall Street

    Raoul Pal noted that the Occupy Wall Street movement fell on deaf ears, and young investors don't care what the establishment says.

  • 2 EV Stocks That Are Set to Keep Growing; Analyst Says ‘Buy’

    Let’s talk about electric cars. It’s an opportune time, as the auto industry is shifting to electrification. While the base technology is hardly new, a combination of factors has recently pushed it back into the limelight. Improvements in battery technology, along with advances in plastics, carbon fiber, and metallurgy, now make possible the production of lighter weight, longer ranged, electric vehicles (EVs), while the political climate has shifted in favor of them and against the gasoline powe

  • Richest Man in Philippines Sees Supermarket Stock Jump 50% on Debut

    (Bloomberg) -- Eager retail investors helped make the richest man in the Philippines a little richer on Wednesday.Most Read from BloombergSupply Chain Crisis Risks Taking the Global Economy Down With ItChina’s Climate Goals Hinge on a $440 Billion Nuclear BuildoutInto the Metaverse: Where Crypto, Gaming and Capitalism CollideAtlanta’s Crowded Election Pits Former Mayor Versus ‘Anyone But’Ballot Initiatives to Watch, From Policing to the EnvironmentThe AllDay Marts Inc. supermarket venture of bil

  • Goldman Sachs sees ethereum rallying 80% to $8,000 within two months if it keeps tracking inflation

    Goldman Sachs said ethereum has tracked inflation expectations closely, meaning it could be set to surge.

  • 3 Growth Stocks That'll Make You Richer in November (and Beyond)

    Since the end of the Great Recession in 2009, growth stocks have been an unstoppable force on Wall Street. Historically low lending rates and the Federal Reserve's ongoing quantitative easing measures have created a pool of abundant cheap capital that fast-paced businesses have used to hire, innovate, and acquire. If there's a high-growth industry just begging for bargain hunters to strike, it's advertising technology.

  • Oil Driller Diamondback Braces for 10% Price Shock in Shale Sector

    (Bloomberg) -- Shale driller Diamondback Energy Inc. is bracing for a 10% jump in costs next year amid supply-chain snarls rippling through the oil industry.Most Read from BloombergSupply Chain Crisis Risks Taking the Global Economy Down With ItInto the Metaverse: Where Crypto, Gaming and Capitalism CollideAtlanta’s Crowded Election Pits Former Mayor Versus ‘Anyone But’Ballot Initiatives to Watch, From Policing to the EnvironmentThe Best New Restaurants in Washington, Chosen by Top ChefsAlthough

  • Could Shiba Inu Fall 90% (or More)? Here's What History Suggests

    While the Big Two, Bitcoin (CRYPTO: BTC) and Ethereum, often get all the glory, the buzz right now belongs to meme coin Shiba Inu (CRYPTO: SHIB). The Shiba Inu dog breed was the inspiration behind the ultra-popular Shiba Inu coin.

  • Why Canopy Growth, Aurora Cannabis, Tilray, and Sundial Stocks Are on Fire

    Marijuana stocks are on fire Monday, as multiple Wall Street analysts update their valuations in the sector and news emerges from Italy concerning prospects for legalization in that country. Sundial Growers (NASDAQ: SNDL) -- meme stock traders' favorite flavor of cannabis -- is gaining 2.2%. Tilray (NASDAQ: TLRY) is topping a 4.5% gain.

  • 3 Unstoppable Stocks to Buy in a Bear Market

    With the market continuing to make new highs, and the only bear market in a decade coming briefly due to the pandemic, now is a good time to get a plan ready for the next one. Consider having a shopping list that has different types of stocks to take advantage of the diversity offered by both growth and income investments. The three stocks below make a good mix for the next bear market shopping list.

  • Goldman Sachs Bets on These 3 Stocks; Sees at Least 30% Upside Potential

    We blame weather forecasters when they can’t predict a sunny day or a storm, but think of the data set they have to parse, and the conflicting winds and calms that come ahead of late-summer storm. Today’s market environment would baffle the best meteorologist. Stocks are at all-time record levels, while Congress is locked in battle with itself, unable to pass a coherent spending package. The President’s preferred spending bill would run up Federal outlays into the trillions of dollars, boosting

  • Rivian Is Going Public. Opportunity Is Knocking.

    Rivian looks to be starting its IPO roadshow—and none too soon. If the all-electric truck maker followed its original IPO timeline—selling stock around Thanksgiving—it risked missing an incredible opportunity to raise capital. The truck maker had been targeting an $80 billion valuation when it filed confidentially to go public in late August.

  • Put these 10 stocks on your radar because they may rebound from recent tax-loss selling

    Professional investors tend to dump some of their losers by the end of October, creating greater value in some stocks.