German online fashion retailer Zalando SE has announced that it is raising its full-year earnings guidance, attributing this increase to the surge in demand for online shopping as a result of the coronavirus pandemic. As Europe’s largest online-only fashion retailer, Zalando now expects adjusted earnings before interest and tax (EBIT) of 250-300 million euros for the full year, up from its previous guidance in May which projected GMV and revenue growth of 10-20%.

In addition to revising its earnings guidance, Zalando also predicts that its gross merchandise volume (GMV) will grow by 20-25% and revenue will increase by 15-20% in 2020. These figures surpass the company’s earlier estimates and reflect the significant rise in online shopping during the pandemic.

Based on preliminary figures for the second quarter, Zalando reported that its GMV has grown by 32-34% to 2.67-2.71 billion euros, while group revenues have increased by 26-28% to 2.01-2.05 billion euros. The company’s adjusted EBIT for the second quarter is expected to fall within the range of 200-220 million euros. The financial results for the second quarter will be released by Zalando on August 11.

Since the outbreak of the coronavirus, Zalando has noticed a significant shift in consumer preferences towards digital shopping. Initially, the company had forecasted a sales growth of 15-20% for 2020, which was lower than the 20.3% growth seen in 2019, as well as GMV growth of 20-25%. However, the rapid acceleration of online shopping has prompted Zalando to revise its expectations upwards.

As the fashion industry adapts to the new normal brought about by the pandemic, Zalando’s increased guidance reinforces its position as a leader in the online fashion retail sector. With the continued growth in demand for online shopping, Zalando is well-positioned to take advantage of this trend and maintain its strong performance in the coming months.

1. Reuters
2. BBC