Zalando stock zooms higher on strong demand forecast

Aug. 04, 2022 12:17 PM ETZalando SE (ZLNDY)ZLDSFBy: Kevin P. Curran, SA News Editor

Package ready to send back, online shopping, fashion, shoes

David Peperkamp

Zalando (OTCPK:ZLNDY) shares soared on Thursday despite a slight drop in revenue and recession concerns in Europe.

The German eCommerce posted adjusted EBIT of €184M alongside €2.62B in revenue for the second quarter, the latter being a 4% contraction from the prior year. However, active customers jumped 11% in the year to over 49M. The loyalty program also saw an 164% year-over-year increase in membership to reach 1.5M members.

“We have demonstrated our agility as a team, showing that we can react quickly to adapt to the current environment while also making the experience of our customers even more inspiring and engaging,” Co-CEO Robert Gentz said. “We continue to grow our customer base and are fully focused on our strategy and making selective investments across our business to ensure our long-term growth.”

Moving forward, the company reaffirmed its growth plans for sales and indicated plans to cut costs and maintain margins amid particularly elevated inflation impacts in Europe. In particular, marketing spend is set to be cut back.

“We are focused on efficiency and margin improvement measures that will help us strengthen our profitability in the second half of the year,” CFO Dr. Sandra Dembeck said. “Our healthy balance sheet allows us to continue to invest into our technology platform and logistics infrastructure to enable our long term growth trajectory.”

Zalando (OTCPK:ZLDSF) shares rose over 15% at their intraday peak.

The company added that it plans to home in on growth in its beauty sales, while expanding membership programs in Central and Eastern Europe. However, according to German media, the company denied rumors that it is eyeing expansion into the US market.

The results for the online retailer came despite sagging retail sales overall in Germany.

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