Achievement Reached: Jump Completed Successfully
Remodeled Fashion Frontier:
Zalando's Q3 results saw a 38% surge in their adjusted operating result, climbing to 13.5 million euros, and a revenue growth of 3%, reaching 2.35 billion euros. The swell in active customers hit a milestone, skyrocketing by 8% and surpassing 50 million[1]. The new minimum order value policy boosted order volume, even made smaller orders profitable despite the shipping fee[2].
A Clouded Forecast:
Yet, the online fashion retailer is treading with caution. Inflation, inflation, everywhere, and consumers reigning in their spending is creating a challenging landscape for Zalando[1]. Co-CEO Robert Gentz revealed that the initial medium-term targets might take longer to reach due to these obstacles[2]. The year 2022, with its economic turmoil, wasn't previously foreseen weighing heavily as it does now[3]. The economic slump's gales are predicted to persist for some time[2]. They reiterated their annual targets, set in June, which predict a meager 0% to 3% revenue growth and an operating result of between 180 and 260 million euros[2].
A Dip, Recovery, and Caution Stephen's Day:
September witnessed Zalando's shares tumbling below the 20 euro mark and hitting an eight-year low[3]. Yet, it has gradually started to recover ever since, attracting wary potential investors[3].
Zalando grapples with macroeconomic pressures and market competition while striving for technology-driven growth and profitability[1]. Asian newcomers are intensifying competition through price wars in Europe[1][2], leading to concerns about Zalando's market share. Despite this, the company keeps presses on with a revenue growth goal of +4-9% YoY for 2025 and a projected 2025 EPS of €1.15, with a corresponding 2026 EPS forecast of €1.40[1]. Collaborations with Akamai on Account Protector aim to strengthen fraud detection and provide frictionless shopping experiences[4][5].
The balance between consumer sentiments, competitive pricing pressures, and technological advancements will likely determine Zalando's ability to meet its targets in the coming quarters[1].
- Despite Zalando's impressive Q3 results and growth in active customers, the retailer has expressed caution due to the challenges posed by inflation and consumer spending restraint.
- Co-CEO Robert Gentz has revealed that the initial medium-term targets might take longer to reach due to these economic obstacles.
- In September, Zalando's shares dipped below the 20 euro mark, but they have since started to recover, attracting wary potential investors.
- To maintain its growth and profitability, Zalando is focusing on technology-driven advancements, such as collaborations with Akamai on Account Protector, while managing competitive pricing pressures and consumer sentiments in the coming quarters.
