Zalando recorded a net loss of €11.1 million for the third quarter, compared with net income of €5 million for the year-ago quarter. The adjusted operating profit (Ebit) before non-operating one-time effects fell to €400,000 from €19.5 million.
The company had warned last month that it might post a loss in the third quarter as it continues to invest in technology and infrastructure to ensure future capacity for its growing customer base and to enable new partnership services.
During the quarter, key investments included the ramp-up of new fulfillment centers in southern Germany, in France and Italy. In particular, its fulfillment hub in Lahr, Germany, is now live with initial automated processes and is further ramping up capacity. First parcels left the new logistic sites in Gryfino, Poland, as well as in Brunna near Stockholm, which started test operations. Both sites will start operating over the next few months.
Zalando also recently announced a second fulfillment hub in Poland, which will be located in Gluchow, where construction will start next month. In addition, it will open a new tech hub in Lisbon, Portugal, similar to those it has in Dublin and Helsinki, which will open at the beginning of 2018.
Thanks in part to previous investments, Zalando's revenues jumped by 28.7 percent to €1,070 million for the quarter. In addition, the company increased its active customer base in the period by one million sequentially to 22.2 million, the highest absolute growth since the second quarter of 2015.
In particular, sales in Germany, Austria and Switzerland, jumped by 22.3 percent to €497.7 million, although the Ebit margin of the segment decreased by 6.8 percentage points to 2.6 percent, primarily due to higher fulfillment costs and a lower gross margin.
Zalando reached a turnover of €489.7 million in the rest of Europe, rising by 30.9 percent, with an improvement in the negative Ebit margin of 1.7 percentage points to a still negative level of 3.9 percent, thanks mainly to an improved ratio for marketing costs, which outweighed higher fulfillment costs.
In the few other parts of the world where Zalando operates, sales rocketed by 62.5 percent to €87.2 million, resulting in a positive Ebit margin of 0.5 percent in the quarter, thanks to more profitable sourcing deals.
Moving forward, the Berlin-based e-tailer expects its growth to continue in the range of 20 to 25 percent, but the adjusted Ebit margin is likely to be slightly below last year's level in the fourth quarter. Zalando wants to continue to focus on growth, with a goal to double its business by 2020, continuing to invest in order to pursue this ambition.