By Chase Gummer
FRANKFURT--Online retailer Zalando SE said third-quarter revenue
surged 24%, boosted by growth in non-German speaking parts of
Europe and as cost improvements help put the company on track to be
profitable by the end of the year.
The Berlin-based company, which listed on the Frankfurt stock
exchange on Oct, 1, said revenue rose to EUR501 million ($624.78
million) in the third quarter from EUR404 million a year earlier.
Revenue in non-German speaking markets jumped 40%, while revenue in
its core markets of Germany, Switzerland and Austria rose 14%.
Zalando also said it reached its first ever break-even on its
group earnings before interest and taxes margin in the third
quarter, climbing into positive territory at 0.8% against a loss of
12.4% a year earlier, driven by cost improvements and returning
customers.
Management board member Rubin Ritter said his company was
looking forward to a slightly profitable year and hitting its
execution targets, despite unseasonably mild weather.
Many analysts were expecting a weak seasonal quarter, with two
months of summer clearance and only one month at full price.
Adjusted EBIT reached EUR4 million compared with a loss of EUR30
million a year earlier.
The company didn't provide net profit figures in its quarterly
release, its first official report since listing.
Founded in 2008, the company has grown quickly to become the
largest purely e-commerce fashion retailer in Europe, with custom
online stores for all 15 European countries in which it is
active.
Focusing on clothing, footware and accessories, Zalando sells a
wide range of global, local and fast-fashion brands as well as its
own in-house labels.
Zalando has closed a series of high-profile deals with fashion
labels this year, including one with the U.K.'s Topshop and sister
label Topman, both of which are sold in the Zalando store in select
countries.
This week, U.S. retailer Gap Inc. announced it would also begin
selling its clothes on the Zalando website starting in May of next
year, hoping to make inroads into markets such as Germany, where it
has no physical stores.
Mr. Ritter of Zalando said Topshop had become one of its
best-selling brands at Zalando and that he also expects the Gap
brand to perform well.
Most analysts expect the company to make an operating profit by
the end of 2014.
The company's shares disappointed during their stock market
debut in October, falling more than 13% in the opening days of
trading from the initial issue price of EUR21.50. Zalando shares
surged in early trading in Frankfurt on Wednesday. By midmorning
they were up over 9% at EUR22.02.
Neetha Mahadevan contributed to this article.
Write to Chase Gummer at Chase.Gummer@wsj.com
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