In the third quarter, Zalando’s gross merchandise volume (GMV) grew by 29.9 percent to €2.5 billion while revenues advanced by 21.6 percent to €1.8 billion. The German e-tailer continued to benefit from accelerated consumer shift towards digital purchases and the “strong performance “of its Partner Program and Lounge services.
Adjusted Ebit totalled €118.2 million, up from €6.3 million a year earlier, with the margin widening to 6.4 percent from 0.4 percent, thanks to improved cost of sales and efficiency gains in fulfillment drove profitability in the third quarter. It said that “exceptionally strong” sell-through in the spring/summer season enabled inventory valuation allowances of €35 million, providing a positive one-time effect on profitability. The bottom line showed a €58.5 million profit compared with a €13.6 million loss.
In the quarter, the number of active customers rose by 20.7 percent year-over-year to 35.6 million customers and the number of orders by 26.7 percent to 44.0 million. The average basket size also increased by 2.4 percent to €57.2.
Zalando raised its outlook for the full year. It now expects GMV to grow by 25 to 27 percent, revenues to grow by 20 to 22 percent and to post adjusted EBIT of €375 to 425 million.
The company also announced a one-time bonus of €500 to all 14,000 employees for their “exceptional commitment and contribution.”
It noted that some 2,000 active stores in Europe have joined the Connected Retail program and it expects to triple the size of the network in 2021. As of Nov.1, the scheme was introduced in Denmark, Finland and Norway. It will be expanded to Austria, Switzerland, France, Italy and Belgium in 2021.
Zalando added that it is waiving until the end of the first quarter 2021 all commissions for partners using the Connected Retail program and that it will offer early pay-outs to support their liquidity position.