Zalando has reported “improved” profitability during its first quarter as its updated strategy starts to bear fruit.
The German fashion giant said adjusted EBIT rose to £24.3m (€28.3m) in the three months, up from a loss of £600,000 (€700,000) for the same period last year.
It noted the “substantial improvement” in profitability was driven by lower fulfilment costs and successful inventory management, which contributed to a 1.3% adjusted group EBIT margin.
Gross merchandise volume (GMV) edged up 1.3% to £2.8bn (€3.3bn) while group revenue slipped 0.6% to £1.89bn (€2.2bn).
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The green shoots come after Zalando updated its strategy in March as it set out plans to build the leading pan-European fashion and lifestyle ecommerce ecosystem around its two growth areas: business-to-consumer (B2C) and business-to-business (B2B).
The retailer confirmed its full-year guidance for the year and expects EBIT to be between £326.2m and £386.3m (€380m and €450m), and both GMV and revenue to grow 0% and 5% respectively this year.
Zalando chief financial officer Dr. Sandra Dembeck said: “As we are executing our ecosystem strategy, we are excited by the positive response from customers and partners in the first quarter. We are returning to growth.
“B2C customers are showing increased interest in our quality assortment, digital tools, propositions and inspiring content.
“B2B customers are signing up for our unique offering. Both of our growth vectors are strong and contributing to results, demonstrating the strength of our plans.”
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