Zalando credited its Q2 operating profit increase of €144.8m from €77.4m a year earlier to bigger individual customers orders leading to lower fulfilment costs.

“Amid the temporarily challenging retail environment, we continue to drive sustainable efficiencies in fulfilment and marketing,” says Dr Sandra Dembeck, chief financial officer at Zalando.

She adds: “These efforts have paid off this year with adjusted EBIT almost doubling in the second quarter. Such success puts us in pole position to shift our focus more towards investment and future growth initiatives.”

Whilst operating profit increased, sales actually decreased showing a small decline of 2.5% to €2.6bn.

Zalando Q2 key results:

  • Sales came down to €2.6bn
  • Operating income reached €144.8m
  • Net profit was €56.6m from €14.0m a year earlier.

Zalando has reported that its partners are experiencing significant growth on its platform, with an increasing number opting to use its fulfilment service. During the stated period, the partner business share of fashion store gross merchandise volume saw a nearly 7% rise, while the proportion of items shipped through Zalando Fulfillment Solutions increased by 3% compared to the same period last year.

The retailer also states that new brand launches such as athleisure brand Lululemon and running shoe brand Hoka have added value for customers. Meanwhile, its Lounge by Zalando online shopping club that launched a year ago with limited-time offers and discounts has contributed a 16% increase in revenues at Offprice.

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In July, Zalando launched an artificial intelligence (AI) body measurement tool for its consumers in Germany, Austria and Switzerland.

Co-CEO of Zalando, Robert Genz explains: “We are investing in areas such as storytelling and technology that will boost future growth.

“Our new size and fit tool will make the shopping experience even better. This tool is a step-change solution in the industry that will help customers find the perfect fit before delivery. This is truly exciting as it shows how one of the core challenges in fashion ecommerce can be solved at scale.”

Zalando’s revised financial year forecast

Zalando has announced improvements to its financial year forecast, aiming for greater accuracy. The company now anticipates an adjusted EBIT ranging from €300m to €350m. In terms of sales, the retailer expects a modest growth rate of -1% to 4%.

Zalando acquired a majority stake in fashion media brand Highsnobiety last year, and at a recent event, Stefanos Constantinou, vice president of brand partnerships at fashion media brand Highsnobiety, shared insights on the partnership with Just Style.