Zalando enjoys better-than-expected Q1 as e-tail strength continues

By

Sandra Halliday

Published
Apr 21, 2021

Fashion e-tail giant Zalando is expecting its Q1 results to beat what the market has been predicting due to the SS21 season starting more strongly than it had expected and returns continuing to stay low.

Returns have been a bright spot for online retailers over the course of the pandemic as the categories that have sold well traditionally have lower return rates. But on top of this, consumers also seem to have been buying more confidently and not over-ordering. And online sales don't seem to have been suffering as stores in various countries have reopened either.

This has all helped Zalando. According to its preliminary figures, it saw gross merchandise volume (GMV) rising between 54.5% and 56.5% during the quarter. In monetary terms, that meant a range between €3.13 billion and €3.17 billion. That's a huge increase compared to Q1 2020 when the figure was just €2 billion. 

Meanwhile, its revenues should be up between 46% and 48% to a range of between €2.22 billion and €2.26 billion. Again, that's a big increase compared to the €1.5 billion of a year ago.

All of this means that the company expects adjusted EBIT in the period ranging between €80 million and €100 million. However, this is the one figure that may not outstrip Q1 of 2020 because the figure back then was €98.6 million. Yet considering analysts in late March had been expecting GMV growth of 50%, revenue growth of 45.5% and adjusted EBIT of €41 million, it's clearly impressive.

As well as the reasons cited above, CFO David Schröder attributed the better figures to “the successful execution of our platform strategy [that] allowed us to serve even more customers and to create opportunities for even more partners amidst a challenging overall European fashion market environment.”

Conformation of the quarter’s results is due on May 6.