Zalando Q1 Revenues Slip Slightly, Disappointing Market Expectations

Revenues at Zalando slipped 0.6 percent over the first quarter of the year to 2.24 billion euros.

However the e-commerce giant’s Gross Merchandise Value, or GMV, which shows how much product it shifted and is seen as a key indicator, rose 1.3 percent. Zalando moved 3.27 billion euros worth of product over the first three months of this year.

The company announced a change of strategy in March, with plans to move to more of an “ecosystem” spanning consumer and business-to-business activities. Chief financial officer Sandra Dembeck said the Q1 results were the first signs that this plan was paying off.

“As we are executing our ecosystem strategy, we are excited by the positive response from customers and partners in the first quarter,” she said in a statement. “We are returning to growth.”

Last year, Zalando saw revenues and GMV slip in the low single digits, underscoring anemic demand in online channels after the end of the COVID-19 pandemic.

Although the news was generally positive, especially compared to 2023, Zalando’s Q1 revenue results were slightly below market expectations.

Active customer numbers fell 3.3 percent, going from 51.2 million in the same period in 2023 to 49.5 million. “This development is attributable to a decline in new customer acquisition,” the company said.

The number of orders also dropped 2.6 percent, going from 56.7 million to 55.2 milliion. Average orders per customer and the value of the average purchase, or basket, also decreased slightly.

However, Zalando pointed out that with current customers, its share of GMV was rising — it stood at 296.70 euros in the first quarter — which indicated that established customers were spending more. Over the same period last year it had been 290.50 euros per customer.

Zalando’s EBIT — earnings before interest and taxes — was healthier in Q1 due to the company’s austerity measures, as it cut back on budget lines like logistics costs. It stood at 0.7 million euros in the first quarter. In Q1 the previous year, the company had been 26.2 million euros in the red.

On the back of the Q1 results, Zalando confirmed its full-year guidance of revenue growth and GMV to be anywhere from flat to 5 percent over the course of 2024. EBIT is expected to come in somewhere between 380 million and 450 million euros.

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