German fashion e-tailer Zalando has upgraded its outlook for the financial year 2021 following what it called exceptionally strong and profitable growth in the first quarter, continued elevated growth levels in the second quarter, and a stable outlook for the second half of the year. 

The Berlin-based firm reported Gross Merchandise Volume (GMV) growth of 55.6% to almost EUR3.2bn (US$2.8bn) for the first quarter, with revenue growth of 46.8% year-on-year to EUR2.2bn. Growth was fuelled by a continued rise in consumer demand for online offerings and an outstanding growth in partner business, Zalando said.

The firm achieved its strongest customer growth since 2013, reaching 41.8m active customers at the end of the first quarter. 

In addition to the growth momentum, Zalando achieved a positive adjusted EBIT of EUR93.3m or margin of 4.2%, which was mainly driven by a strong sell-through and a continued lower return rate.

The median of the analysts’ consensus surveyed by the company as of 29 March, was 50% for GMV growth, 45.5% for revenue growth, and EUR41m for adjusted EBIT.

“In the first quarter of 2021, Zalando delivered the strongest growth ever since going public in 2014. We see our platform business unfolding at increasing speed, creating benefits for customers and partners alike and allowing us to make fast strides on our journey towards being the Starting Point for Fashion,” said CFO David Schröder.

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To enable Zalando’s future growth ambitions and serve customers with best-in-class convenience, the e-tailer will continue to expand its European logistics network of ten fulfillment centres by adding five to its existing network by 2023.

Two centres in Rotterdam and Madrid are close to completion and will go live in 2021. Construction works on three new fulfillment sites in France, Germany, and Poland will kick off in the next twelve months.

Looking ahead, Zalando now expects GMV to grow 31-36% to EUR14bn-EUR14.6bn for the financial year 2021, and revenues to increase by 26-31% to EUR10.1bn-EUR10.5bn. Adjusted EBIT is expected at EUR400m-EUR475m in the same period.

Zalando previously assumed GMV growth of 27-32%, revenue growth of 24-29%, and an adjusted EBIT of EUR350m-EUR425m for the full year 2021.