• Zalando Q4 revenues rose 22% to EUR1.33bn (US$1.63bn).
  • Profit after tax was EUR60.1m, only slightly up from EUR60m last year.
  • Adjusted EBIT margin narrowed to 8.4%.

Berlin-based fashion e-tailer Zalando is to expand its product line, enter new markets and invest further in digital after revealing an increase in fourth-quarter sales but earnings that essentially flatlined.

Revenues in the three month period rose to EUR1.33bn (US$1.63bn) from EUR1.09bn a year earlier, largely due to a good performance in Germany, Austria and Switzerland, and a larger customer base.

The online retailer of apparel and footwear, however, said profit after tax was EUR60.1m, only slightly up from EUR60m a year earlier.

Adjusted EBIT reached EUR112.6m from EUR95.6m for the quarter, despite a challenging October, Zalando said. Adjusted EBIT margin was 8.4%, down from 8.8% last year.

For 2018, the company said it expects to outpace the European online fashion market by growing revenues 20-25%, adding about EUR1bn in revenues at the midpoint of the range. Adjusted EBIT is expected to increase to EUR220m-EUR270m, or a margin of around 4-5%.

"In 2017, we made significant headway and won market share in all our markets," said Co-CEO Rubin Ritter. "In 2018, we will target our 20-25% growth corridor for the fourth consecutive year, underlining our conviction that focus on growth and market share wins is the right path to maximise long-term value."

In order to achieve this, the retailer says it will expand its assortment, enter two European markets adjacent to its existing markets, focus on personalising the customer experience, and expanding its logistics footprint with three new fulfilment hubs, a satellite warehouse in Stockholm (Brunna), and further automation in Lahr.