Zalando, the German fashion e-tail giant, has released its Q3 results, showing a mixed performance in the face of a challenging economic backdrop. While the company has seen modest growth in revenue and profits, it expects to meet the lower end of its full-year forecast. Despite this, Zalando has demonstrated its strength on the international stage and its ability to attract and retain active customers.

During Q3, Zalando’s Gross Merchandise Volume (GMV) grew by 7.1% to €3.28 billion, while revenue increased by 2.9% to €2.35 billion. The company’s adjusted EBIT also improved, reaching €13.5 million compared to €9.8 million in the previous year. These figures confirm that Zalando remains a major player in the fashion e-commerce industry, especially considering the challenging retail environment faced by many of its competitors.

Zalando has maintained its full-year forecast, projecting that GMV will grow between €14.8 billion and €15.3 billion. Revenue is expected to increase by 0%-3% and reach between €10.4 billion and €10.7 billion, with an adjusted EBIT between €180 million and €260 million. However, the company anticipates that its results will fall towards the lower end of these ranges.

One notable highlight for Zalando is its growing customer base. The number of active customers has increased by 8% compared to the previous year, surpassing 50 million for the first time. This growth is attributed to successful measures taken by Zalando to improve profitability and mitigate the impact of declining consumer sentiment. The company’s loyalty program, Plus, has also seen significant growth in membership.

Robert Gentz, Zalando’s Co-CEO, expressed his pride in reaching 50 million active customers and emphasized the company’s commitment to deepening relationships with them. He assured stakeholders that Zalando would navigate through these turbulent times by focusing on improving profitability and implementing strategic initiatives to inspire and engage customers.

To protect profitability, Zalando has introduced a minimum order value, encouraging customers to increase their basket size or pay the delivery fee. This decision has made orders below the minimum value profitable for the company. Additionally, Zalando has achieved marketing efficiencies and reduced costs by approximately €100 million this year. The company has also enhanced its European logistics network and effectively managed excess inventory.

In terms of strategy, Zalando is dedicated to driving excitement around top brands and assortment. The company’s collaboration with Highsnobiety aims to improve storytelling, engage with relevant audiences, and foster deeper emotional bonds with customers. Zalando has also strengthened its partnership with Nike, allowing customers to shop for Nike member-exclusive products on the site. Furthermore, Zalando has expanded its partnership with Sephora, bringing more beauty brands to the platform and entering the Italian market.

Zalando’s efforts to attract partner businesses have paid off, with their contribution to Fashion Store GMV growing by seven percentage points compared to the same quarter last year. The company aims to increase its partner business share to 50% of Fashion Store GMV by 2025.

CFO Sandra Dembeck emphasized the company’s proactive approach to support profitability amidst low consumer confidence and ongoing inflation. While uncertainties remain regarding consumer spending in the final quarter, Zalando remains committed to executing its strategic priorities and delivering its financial outlook.

In conclusion, Zalando’s Q3 performance demonstrates resilience in a challenging economic climate. The company’s focus on profitability, customer engagement, strategic partnerships, and cost efficiencies positions it well for continued success in the fashion e-commerce industry. With a strong customer base and a commitment to innovation, Zalando is poised to maintain its status as a major player in the international fashion market.

For more information on Zalando’s Q3 results, visit the Zalando website.

To learn more about the fashion e-commerce industry, check out this Statista article.