Zalando has issued a profit warning and lowers its forecast for this year. The second quarter was much weaker than expected, due to the crisis in consumer confidence.
Consumer confidence continues to fall
Economic conditions are deteriorating and consumer confidence is low, as the war in Ukraine continues to rage. In June, consumer confidence decreased even further, the Germans noted. The e-commerce platform therefore had to admit that its earlier predictions will not come true.
At the beginning of May, the fashion platform still thought it was seeing the first signs of a potential recovery, but this proved to be premature. Management now expects the macroeconomic challenges to last longer and be more intense than expected. In the short term, consumer confidence will not improve, the German company now fears.
Barely any profits
The second quarter of this year was already weaker than analysts expected. Zalando now assumes that sales volume (GMV), revenue growth and profit will all be significantly below expectations. Analysts were broadly expecting a 5 % increase in volume, 1.5 % sales growth and a gross profit of 104 million euros, but that will have been too optimistic. Zalando simply pointed out that the quarter was still profitable.
For the full year 2022, Zalando now expects volumes to grow by 3 – 7 % to 14.8 – 15.3 billion euros, while sales are unlikely to grow much (0 – 3 %). Gross profit would eventually be between 180 and 260 million euros. The latter, however, means that profitability should improve significantly in the second half of 2022, the company admits.