Zalando's Q2 growth boosted by sport, designer and beauty

European fashion and lifestyle e-tailer Zalando reported a revenue increase of 3.4 percent to 2.6 billion euros in its second quarter due to increased demand for its expanded lifestyle offering in sports, designer and beauty.

Zalando's financial report for the second quarter of 2024 shows gross merchandise volume (GMV) rose 2.8 percent to 3.8 billion euros, compared with a year ago, while adjusted EBIT was up to 171.6 million euros, in line with market expectations, compared with 144.8 million euros in the same period last year.

The German e-tailer said the improvement in profitability was “driven by successful inventory management and lower fulfilment costs”.

EBIT margin increased 0.8 percentage points in the period to 6.5 percent of revenue and Zalando confirmed its full-year guidance for 2024 and expects both GMV and revenue to grow up to 5 percent compared with 2023. Adjusted EBIT is expected to be between 380 and 450 million euros.

Robert Gentz, co-chief executive at Zalando, said in a statement: “Our ecosystem strategy empowers us to cover a larger share of the fashion and lifestyle e-commerce market, and the positive response from customers and partners in the second quarter validates our vision.

“Our B2C customers are excited by the quality brands we are adding, spending time with our new digital tools and content, and embracing our expanding lifestyle offerings in areas such as sports, designer and beauty. We also recorded double-digit growth in B2B, demonstrating that both our growth vectors are delivering.”

Zalando drives consumer growth with expanded lifestyle offering

Zalando said its business-to-consumer (B2C) growth in Q2 was boosted by leveraging the 'Summer of Sports' momentum, launching dedicated sports campaigns in major European cities featuring footballers Robert Lewandowski and David Alaba, which led to the e-tailer’s best monthly sports performance ever in June.

Overall revenue in its B2C growth vector rose 2.8 percent to 2.4 billion euros in the second quarter compared with a year ago, while adjusted EBIT increased to 165.2 million euros, representing an adjusted EBIT margin of 6.8 percent in the quarter.

The e-tailer also added that it invested in improving its localised and personalised convenience offering, for instance, in Sweden, it reduced its delivery time for most items to a maximum of one to two days.

Zalando business-to-business grows sales by 10.3 percent

In business-to-business (B2B), Zalando reported a growth increase of 10.3 percent to 233.8 million euros compared with a year ago. Adjusted EBIT fell to 7.1 million euros from 15.5 million euros in the quarter, representing an adjusted EBIT margin of 3.1 percent. The decrease was mainly caused by frontloaded investments.

Zalando also announced that it has reappointed Astrid Arndt as chief people officer for another four-year term from September 1. While chief financial officer Sandra Dembeck has chosen not to renew her contract when it ends on February 28, 2025, as she is embarking on a “new career opportunity”.