Zalando kicks off fall and winter season strongly

Zalando posted solid growth in the third quarter. The online fashion platform benefited from increasing consumer demand, but also invested heavily in its logistics operations.

AI in all countries

Zalando saw both its business-to-consumer (B2C) and business-to-business (B2B) operations grow last quarter. The German platform recorded a gross merchandise value (GMV) of 3.5 billion euros, up 7.8%, while sales rose 5% to 2.4 billion euros. Adjusted operating profit (EBIT) climbed from 23 million euros to 93 million euros, resulting in a margin of 3.9%.

The number of active customers grew by half a million to 50.3 million. Zalando’s chief financial officer, Sandra Dembeck, highlighted investments in several growth opportunities, including the expansion of its loyalty programme, more content and the strengthening of its European logistics network. The company also plans to expand its tech hub in China. Zalando’s AI assistant was recently rolled out to all 25 markets.

Logistics fastest growing

In the actual web shop, the B2C branch and core of Zalando’s business, sales rose 4.3% to 2.2 billion euros. Adjusted EBIT margin in this segment improved significantly from 0.5% to 4.0%, mainly due to improved gross profit margins and lower fulfilment costs

The new B2B segment, in which Zalando offers its logistics infrastructure and services to partners, saw sales rise 11.1% to 239.7 million euros. However, profitability fell, with adjusted EBIT margin falling from 5.8% to 2.8%, according to Zalando due to forward-looking investments. For instance, the marketplace recently inaugurated a new distribution centre in France. For the full year, Zalando confirms its previously raised expectations.