• Q2 earnings slip to EUR47.4m (US$55.6m) 
  • Adjusted EBIT margin narrows to 7.4%
  • Net sales grow 20.1% to EUR1.1bn

Berlin-based fashion e-tailer Zalando booked a mixed second-quarter as earnings slipped but sales booked a double-digit increase as the company's active customer base and average orders surged.

During the quarter, earnings slipped to EUR47.4m (US$55.6m) from EUR50.9m a year earlier, while adjusted EBIT was EUR81.8m, compared to EUR80.9m in the year-ago period. Adjusted EBIT margin narrowed to 7.4% from 8.8%.

Revenues meanwhile, grew by 20.1% to EUR1.1bn from EUR916.4m last year, thanks to a growing active customer base as well as an increase in average orders to 3.7 times per year, marking another all-time high and indicating strengthened customer loyalty.

Active customers increased by about 800,000 to 21.2m compared to the previous quarter, the strongest increase since the fourth quarter 2015.

During the quarter, the company continued to execute on its platform strategy including the launch of Zalando Fulfillment Solutions with Bestseller as first flagship partner, allowing fashion brands access to its logistics infrastructure and know-how.

Zalando inks wholesale platform JV with Bestseller

Meanwhile, the addition of multi-channel basketball retailer Kickz strengthened its sports and lifestyle segment.

Zalando eyes future growth with Kickz

Looking ahead, as part of its continued growth initiatives, Zalando plans to expand its European fulfillment network with two large fulfillment centres in Poland and Italy. Zalando already operates sites of a similar size in Erfurt, Mönchengladbach and Lahr, Germany, and prepares to launch initial operations in Gryfino near Szczecin, Poland, in the third quarter.

These are complemented by smaller fulfilment centres in Brieselang near Berlin, as well as localised warehouses in Stradella near Milan, Moissy-Cramayel near Paris, and by the end of the year in Brunna near Stockholm.

"We firmly believe that growth is the right strategy to increase the value of our business," said co-CEO Rubin Ritter. "Our updated guidance reflects our focus on growth at solid profitability levels. It is in our DNA to continuously evaluate additional investment opportunities, test ideas, and then start scaling them."

For the full year, Zalando expects revenue growth in the upper half of its guided range of 20-25% and an adjusted EBIT margin in the lower half of the 5-6% range.