Source: Company reports
1Q16 RESULTS
Zalando reported 1Q16 revenue growth of 23.7%, to €796.1 million, below the consensus estimate of €804.2 million. Adjusted operating profit declined by 30.6%, to €20.2 million, but exceeded analysts’ estimates of €19.7 million. Adjusted operating margin was 2.5%, versus 4.5% in 1Q15.
Operating profits were impacted by the expansion of its fulfillment network, which included a new fulfillment center opened in Stradella, Italy, in December 2015. Investments made outside of the latest quarter include the construction of a new warehouse in Lahr, Germany, which is expected to become operational in autumn 2016, and the acquisition of Tradebyte Software, an e-commerce software provider, in May 2016.
Revenues were up in all segments, growing by:
- 16.9% in DACH (Germany, Austria, Switzerland), to €405.8 million
- 26.3% in Rest of Europe, to €334.5 million
- 76.9% in Other (which includes Zalando Lounge and two outlet stores, in Berlin and Frankfurt), to €55.8 million.
During the quarter, the company expanded its partner program, adding Adidas and Superdry to the roughly 150 partner companies that sell on the Zalando portal. A new fulfillment center in Stradella, Italy, which opened in December 2015, enabled the company to cut lead times for Italian orders by as much as 1.5 days. Zalando’s customer base grew to 18.4 million in the quarter, from 15.4 million in the year-ago quarter. Mobile is now by far the preferred way for customers to access Zalando’s portal, accounting for 62.3% of total visits.
FY16 OUTLOOK
Zalando expects to deliver 20%–25% revenue growth and an adjusted EBIT margin of 3.0%–4.5% during FY16.
Analysts estimate that the company will generate €3.7 billion in revenue—a year-over-year increase of 26.1%—and an EBIT margin of 3.9% in FY16.
