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Zalando Group has felt customers’ reluctance to buy given rising costs.
The Berlin-based online marketplace for fashion confirmed its full-year forecast at the lower end for sales, gross merchandise volume (GMV) and adjusted EBIT. The planned investments are to be fully realized during the current year.
The quarter saw an adjusted EBIT loss of €51.8 million after a profit the previous year. After taxes, the loss was 61.3 million euros – after a profit of around 35 million euros. Sales fell 1.5% to around 2.2 billion euros. The gross volume of goods increased slightly by 1% to around 3.18 billion euros.
Over the full year, adjusted operating profit before interest and tax (EBIT) should be at the lower end of the range of 430 to 510 million euros. GMV is also expected to increase at the low end of 16-23%, with sales at the low end of 12-19%. The group intends to continue to invest 400 to 500 million euros in the current year.
Zalando investors shocked – “The time for high growth is over”
Investors are overwhelmingly turning their backs on Zalando shares on Thursday. After the quarterly report, they adjusted even more strongly than before to periods of more moderate growth, and so the price really started to fall sometime in the afternoon after the morning swings. Zalando shares fell via XETRA at the end of the session by 10.61% to 33.21 euros. The price is gradually heading towards the March 2020 corona crash low.
According to JPMorgan expert Georgina Johanan, Zalando is the first major company in the online fashion industry to cut its targets due to a drop in consumer spending.
The first voices in the market were not really surprised, after all, the development was also due to the high comparison base compared to the previous year, which was shaped by the pandemic. Zalando had already indicated in the 2021 annual report that the start of the new year would be mixed. Overall, the result and a more pessimistic outlook for the current year were already expected. “But will it help? The days of high growth are over,” said a Brsian.
Benjamin Kohnke of Stifel Research now sees the e-merchant, accustomed to other eras, in an extremely critical situation in view of “unremarkable figures”. Given that the price has almost halved since the start of the year, much of the concrete outlook has already been priced into the stock price. However, the valuation of the title is still quite demanding compared to the competition. But it’s not unjustified because of better positioning in many ways.
From the pandemic rally over 100 euros, there is almost nothing left with the last 33.60 euros paid. If the corona crash caused stocks to fall to 27.33 euros after the virus outbreak in March 2020, investors paid almost three times as much in the summer of 2021, down to 105.90 euros. Before the pandemic, the price was still fluctuating in the range between 40 and 50 euros at the beginning of 2020, i.e. above the current level.
FRANKFURT (Dow Jones) / FRANKFURT (dpa-AFX)
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