Source: Company reports/FGRT

3Q17 and First Nine Months of FY17 Results

Zalando reported 3Q17 revenues of €1,074.7 million, up 28.7% year over year, and in line with the consensus estimate of €1,074.0 million. Adjusted EBIT came in at €0.4 million versus the consensus estimate of €3.2 million, corresponding to an adjusted EBIT margin of 0.0%. Figures for the first nine months of the fiscal year show revenues increased 23.9% to €3,155.3 million and adjusted EBIT was €102.5 million, corresponding to an adjusted EBIT margin of 3.2%. A one-million increase in the number of active customers to 22.2 million and faster revenue growth of 22.3% in the DACH region (Germany, Austria and Switzerland) to €497.7 million supported revenue growth in 3Q17. At the same time, however, the company’s focus on investment impacted profitability. Zalando announced the construction of a second fulfillment hub in Poland, starting in November 2017.

Outlook

Zalando confirmed its FY17 guidance to deliver revenue growth in the upper half of its 20.0%–25.0% estimated range. However, due to weaker-than-expected operating profit in 3Q17, the company revised its expectations for adjusted EBIT margin for the year to just under 5.0% from its previous forecast of 5.0%–6.0%. The FY17 revenue consensus estimate stands at €4,492.0 million, implying year-over-year growth of 23.4%. The consensus expects operating profit of €223.0 million, implying an adjusted FY17 EBIT margin of 5.0%. Analysts estimate FY17 EPS at €0.57. Zalando will report 4Q17 and full-year results on March 1, 2018.