After two years of declining revenue, Zalando has regained its growth path. Revenue grew by an estimated 3.9 percent to 10.5 billion euros last year, setting a new record. The company has again revised its profit forecast upwards.
Following years of strong growth, peaking at over 10.4 billion euros in 2021, Zalando experienced a revenue decline in the post-COVID years of 2022 and 2023, with drops of 0.1 percent and 1.9 percent, respectively.
Returning to growth
Zalando’s revenue still declined in the first quarter of 2024. “We are returning to growth”, Zalando’s CFO, Dr. Sandra Dembeck, stated at the time. “As we are executing our ecosystem strategy, we are excited by the positive response from customers and partners in the first quarter.”
From that point on, sales indeed improved, as Zalando reports in a statement with preliminary figures. For the entire year, gross merchandise volume (GMV) grew by 4.5 percent, while revenue increased by 3.9 percent as mentioned.
Profit forecast
The revenue growth is accompanied by profits exceeding Zalando’s earlier expectations. At the beginning of 2024, the company anticipated an adjusted EBIT of between 380 and 450 million euros for the year. This forecast was revised upward in the fall, to between 440 and 480 million euros. Zalando has now raised its forecast again, expecting adjusted EBIT to reach around 510 million euros, compared to 350 million euros in 2023 and 185 million euros in 2022.
Zalando is now projecting adjusted EBIT of over half a billion euros.
The new figures are attributed to “a better than expected fourth quarter”, states Zalando. “This was in particular driven by strong customer growth fueled by marketing and better sell-through.” To further improve profitability Zalando is adjusting its return policy and Plus program in most major markets.
B2B powerhouse
Last year, Zalando positioned itself as an ecommerce ecosystem, shifting its focus from just B2C to also include B2B. The company now reports separately on both divisions. The planned acquisition of About You is expected to transform Zalando into a B2B powerhouse.
