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Unexpected revenue surge at Zalando

Etailer Zalando has reported a 1,500% increase in adjusted earnings before interest and taxes (EBIT) to €6.4m (£5.49m) in the first quarter of 2019, when it usually makes a profit loss from selling heavily discounted stock after Christmas.

EBIT was €0.4m (£0.34m) during the same period in 2018. 

Zalando said revenue had risen on the back of growth in its active customer base. The number of active customers increased 14.1% to 27.2 million in the quarter and site visits rose by 29.5% to 924 million.

It reported a year-on-year rise in revenue of 15.2% to €1.4bn (£1.2bn) in the first quarter of 2019. 

Nevertheless, net losses grew to €17.6m (£15.10m), compared with a loss of €15.1m (£12.96m) in the first quarter of 2018.

Zalando has confirmed its full-year guidance of gross merchandise value (GMV) growth between 20% and 25%, revenue growth at the low end of this range, an adjusted EBIT of between €175m and €225m (£150m and £193m), and capital expenditure of around €300m (£257m).

The company said it will focus on improving customer relationships through Zalando Plus, which is available for all customers in Germany. A pilot project is live in Switzerland, and France and Italy will follow within the next 12 months.

Growth in Zalando’s partner programme was driven by brands intensifying their usage as well as by new partners, including Calzedonia, Intimissimi and Margarete Steiff. In the first quarter, about 30% of all partner programme orders were processed and delivered through Zalando Fulfillment Solutions.

Chief financial officer David Schröder said: “We will continue to invest in areas of our business that have high added value for our customers.”

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