[caption id="attachment_79231" align="aligncenter" width="640"] Source: Company reports/Coresight Research[/caption]   On February 28, 2019, Zalando published its 4Q18 and FY18 results, and hosted a Capital Markets Day in Berlin.  4Q18 and FY18 Results Zalando reported a very strong final quarter, with revenue growth of 24.6%, versus 11.7% in the third quarter. 4Q18 revenues of €1.66 billion came in ahead of the consensus estimate of €1.64 billion recorded by StreetAccount. At the company Capital Market Day, Birgit Haderer, SVP of Finance, characterized it as a “good conclusion to a bumpy 2018” and noted that growth was supported by “very strong” customer key performance indicators, such as customer growth and purchase frequency.  In 4Q18, the company reported adjusted group EBIT of €117.8 million, up 4.6% year over year and comfortably ahead of the StreetAccount consensus of €105.8 million. This yielded an adjusted EBIT margin of 7.1%, down 130 bps year over year but ahead of the 6.4% consensus. 4Q18 Segment Performance:

• Fashion Store: This segment, which comprises full-price websites, grew revenues by 25.1% year over year and reported EBIT of €110.9 million, or a margin of 7.2%.
• Off price: This segment grew revenues by 36.0% year over year and reported EBIT of €11.1 million, a margin of 7.4%.
• All Others: This segment, which includes private labels and various emerging businesses, reported a 50.0% year-over-year increase in revenues and posted an EBIT of €(4.0) million, or a margin of (3.0)%.

For the full year, Zalando reported revenues of €5.39 billion, up 20.0% year over year. In the third quarter, management had guided for full-year revenue growth to be at the lower end of the 20-25% range. For the full year, the company reported adjusted group EBIT of €173.4, at the midpoint of its guidance for €150-190, and yielding a margin of 3.2%.  In 2018, Zalando grew GMV by 21.1% to €6.6 billion. Going forward, the company will report GMV on a quarterly basis to reflect the scale of the business, which has expanded beyond retail with its Partner Program marketplace. Zalando saw its average basket size fall again, from €64.5 in 2017 to €61.0 in 2018. The unfavorable economics of smaller orders helped push up its fulfilment cost ratio for a second consecutive year, from 26.0% of revenue in 2017 to 27.9% in 2018. More positively, marketing costs as a percentage of sales fell from 8.1% in 2017 to 7.4% in 2018. Outlook In 2019, Zalando aims to grow GMV by 20-25% and revenues at the low end of this range. The company expects to report an adjusted EBIT of €175-225 million in 2019. It plans capital expenditure of around €300 million in the year. For details of Zalando’s new five-year ambitions, see our report from its 2019 Capital Markets Day.