Fashion platform Zalando expects to grow revenues in the fourth quarter of 2018 by 20-25% after a financially challenging third quarter with 11.7% revenue growth to €1.20 billion and an adjusted EBIT of €-38.9 million, corresponding to a margin of -3.2%. Zalando’s Partner Program continued to grow above expectations, with improved tools cutting the time to onboard new articles in half and resulting in Partner Program growth exceeding 60% in the third quarter, as new partners joined and existing partners internationalized to additional markets.
In terms of customers, key performance indicators continue to develop positively. With 25.1 million, Zalando reached a new record number of active customers. An all-time high order frequency resulted in orders growing by 22.8% to €27.7 million. Co-CEO Rubin Ritter said: “We are clearly not happy with our financial results in the third quarter. Our eyes are set on building the ecosystem for European fashion at full speed and our 2020 target of doubling the business to €10 billion in gross merchandise volume. For the fourth quarter, the team’s full focus is now on pulling off a strong finish to the year.”
For the full year, Zalando continues to expect revenue growth around the low end of its 20-25% target growth corridor. Capital expenditure will stay on elevated levels due to continued strong logistics and technology investments. Zalando anticipates spending around €300 million in 2018, which is slightly less than initially expected (around €350 million) as the company is further optimizing its logistics footprint and projects will be spread over a longer period of time.