Zalando left investors underwhelmed despite upbeat financials
Zalando (ETR:ZAL) shares dropped nearly 2% in Germany, closing Tuesday’s trading at €21.58, despite seemingly upbeat second-quarter financial results.
The European clothing and apparel e-tailer reported a 3.4% rise in revenue compared to the same period in 2023, and highlighted a 2.8% improvement in ‘gross merchandise volume’ which totalled €3.8 billion.
Earnings (EBIT) were, meanwhile, up 18% year-over-year to €171.6 million.
Zalando highlighted successful inventory management and lower fulfillment costs, and also pointed to “significant growth” its sports, designer, and beauty categories driven by ad-spend promoting a "Summer of Sports" in which Germany was host to the UEFA 2024 Euro Championship and France is hosting the Olympics.
In its business-to-business (B2B) segment sales were up 10.3%.
“Our B2C customers are excited by the quality brands we are adding, spending time with our new digital tools and content, and embracing our expanding lifestyle offerings in areas such as Sports, Designer and Beauty,” Zalando co-CEO Robert Gentz said.
“We also recorded double-digit growth in B2B, demonstrating that both our growth vectors are delivering.”
Its 2024, so naturally, the online firm talked up artificial intelligence integrations.
Zalando said it is investing in ‘AI-powered tools to enhance customer experience and expanded its assortment with new brands’.
The e-commerce firm also, in a separate announcement, told investors that it had bought back €100 million of a €500 million convertible bond series that was due to mature a year from now.
Also in the finance department, CFO Sandra Dembeck will be stepping down (in February).
In Tuesday’s early trade, Zalando shot up marking gains up to €23.41, before the selling set in leaving the share to close 1.9% at €21.58.
Nevertheless, Zalando has rallied some 15% in the past six months (but is still down 30% over the last twelve months).
That somewhat sums up where the e-tailer is right now, and, that’s reflected by full-year guidance that’s simply maintained despite what on-the-face-of-it was a positive first half performance. Evidently the lack of an upgrade left some investors underwhelmed.
