- Gross merchandise value (GMV) increased by 1.3% in the first quarter
- Adjusted earnings before interest and tax (adjusted EBIT) increased to €28.3 million for the quarter, corresponding to a margin of 1.3%.
- Business-to-consumer (B2C) is experiencing the greatest growth with Beauty, Sports, Kids & Family and 'Lounge by the Land' propositions
- Business-to-Business (B2B) adds multichannel fulfillment partners and increases revenue by 13%
- Confirmed full-year forecast for 2024
Berlin, May 7, 2024 // Zalando posted improved growth and profitability in the first quarter by improving the quality of its assortment, achieving strong growth in lifestyle products, making the customer experience more emotional, and adding more logistics partners. It has come true. The results are a validation of Zalando's latest strategy, announced in March, to lead pan-European fashion and lifestyle around two main growth vectors: business-to-consumer (B2C) and business-to-business. The idea is to build an e-commerce ecosystem (B2B).
Gross merchandise merchandise (GMV) in the first quarter was 3.3 billion euros, an increase of 1.3% year-on-year. Sales amounted to 2.2 billion euros, compared to his 2.3 billion euros in the same period last year. Adjusted earnings before interest and tax (adjusted EBIT) increased to 28.3 million euros in the first quarter, in line with market expectations and compared to minus 0.7 million euros in the same period last year, giving a margin of 1.3%. . Significant improvements in profitability were driven by reduced fulfillment costs and successful inventory management, leading to higher gross profit margins.
“We are executing on our ecosystem strategy and are excited by the positive response from our customers and partners in the first quarter. We are returning to growth,” said Dr. Sandra Dembeck, Zalando CFO. I did. “B2C customers are increasingly interested in our high-quality assortment, digital tools, offers and inspiring content. B2B customers are signing up for our unique services. Both of our growth vectors are strong and contributing to our results, demonstrating the strength of our plans.”
Within the B2C growth vector, Zalando's first pillar is to differentiate through quality in order to offer the best possible shopping experience in fashion and lifestyle. In the first quarter, the company further strengthened its product lineup by launching its premium sports brand “On” in 22 markets. To further improve the quality of its digital experience, Zalando has rolled out its size advice tool with body measurements to customers in Spain, France and Italy, bringing it to a total of six markets. Zalando also expanded its comprehensive range with the launch of 20 adaptive children's shoes after speaking with parents of children with disabilities and identifying their needs.
The second growth pillar of Zalando's B2C strategy – further expansion as a lifestyle destination by elevating existing categories into distinct propositions – showed strong results in the quarter. Proposition delivers a compelling experience by combining a more comprehensive selection, advisory features, personalized inspiration, and seamless convenience. As part of its new elevated designer experience on its website and app, which provides designer brands with a luxury boutique-style space, the company has partnered with Japanese-British musician and actor Lina Sawayama as a new ambassador for its designer services. . Zalando has also launched an exclusive co-designed capsule collection called 'Cinema Club' in collaboration with Italian designer brand Aspesi. During the quarter, Zalando saw the biggest growth in its Beauty, Sports, Kids & Family and Lounge by Zalando propositions.
For B2C's third growth pillar: integrating content into commerce and providing personalized inspiration and entertainment, the company is introducing a new feature to Zalando Assistant that allows customers to ask questions using voice, not just text. We've added new features to make the experience even more intuitive and natural. A new source of inspiration called Trend Spotter shows customers emerging fashion trends in his six major fashion capitals of Europe. Powered entirely by Zalando data, each week we highlight the top items trending among customers in Berlin, Paris, Milan, Antwerp, Stockholm and Copenhagen.
In the first quarter, B2C gross merchandise volume increased by 1.3% to €3.3 billion, supported by a timely start to the spring/summer season. Adjusted EBIT increased to 23 million euros, resulting in a profit margin of 1.1% for the quarter. His 1.4 percentage point improvement in profitability compared to the same period last year was due to higher gross margins and lower fulfillment costs.
In B2B, Zalando is opening up its logistics infrastructure, software and service capabilities to become a key enabler for e-commerce transactions for brands and retailers, whether they take place on or off the Zalando platform. doing. Five more partners joined his ZEOS multichannel fulfillment in the first quarter, bringing the total to 27 merchants.
One example of a brand that recently signed up for a more comprehensive service package is LolaLiza. The successful Belgian women's wear brand, which has been part of the Partner Program since 2020, recently signed a new agreement that includes ZEOS fulfillment for countries outside its home market, with Tradebyte, Zalando's marketplace integrator. We are planning to migrate.
Revenues in the B2B growth vector increased by 13% to 215 million euros, and adjusted EBIT rose to 5 million euros from 4 million euros in the same period last year. Adjusted EBIT margin improved to 2.5% from 2.2% in the same period last year.
Check full-year forecast
Zalando has confirmed its full-year outlook for 2024 and expects both GMV and revenue to increase between 0% and 5% this year compared to 2023. The company continues to focus on profitable growth with improved margins, with adjusted EBIT expected to be between $380. 1 million euros and 450 million euros.
The financial report and earnings presentation for analysts and investors for the first quarter of 2024 are available on the Zalando Investor Relations website. Zalando is scheduled to report his second quarter 2024 results on August 6, 2024.