German fashion e-tailer Zalando expects its first-quarter results to be “significantly” below analysts’ consensus earlier this month, which did not take into account the effects of the coronavirus.
In a statement, the Berlin-based firm said it expects revenue and gross merchandise volume (GMV) growth in the first quarter to be significantly below the analysts’ consensus of 11 March, due to lower discretionary spending by European consumers as a result of the measures taken by European governments to limit the spread of the virus.
Adjusted EBIT is also negatively impacted by lower sales growth in the first quarter and an exceptional write-down of inventories as a result of the revised sales expectations for the current season.
The median of the analysts’ consensus was 19% for revenue growth, 22.8% for GMV growth, and an adjusted loss of EUR28m.
Zalando added its guidance for the fiscal year 2020, published last month, had explicitly excluded negative effects from the spread of the coronavirus.
“Based on the current situation, the company assumes that the published forecast cannot be achieved. The management board will issue a new guidance as soon as the course of the corona pandemic can be estimated more reliably,” it said.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataZalando will publish further information on the first quarter in a trading statement on 16 April. The financial figures for the period will be published on 7 May.
Meanwhile, the company is waiving the commission fee for all new and existing physical stores that are participating in its Connected Retail Program as part of efforts to help support brands and retailers during the pandemic.
The offer applies to brands and physical retailers in Germany and the Netherlands starting 1 April and remaining valid until 31 May. In this period, Zalando will waive commissions for new and existing Connected Retail partners and will shift from a monthly to a weekly pay-out schedule to help mitigate financial distress and contribute to liquidity.
Connected Retail is open to every retailer and brand with physical stores, as long as they offer products sold on Zalando.
“In addition, we have earmarked EUR100m of cash for early payments to partners for goods and services they have already delivered to us,” a letter from Zalando’s management board said.
