The company’s adjusted earnings before interest and taxes (adjusted EBIT) increased to €13.5 million from €9.8 million in the same quarter a year ago.

The introduction of a minimum order value has encouraged customers to increase the size of their basket or pay the delivery fee. As a result, orders below the minimum order value are now profitable. Zalando captured further marketing efficiencies in the third quarter, reducing costs by almost €100 million so far this year, the company said in a press release. Zalando also drove efficiency improvements across its European logistics network including managing excess inventory.

For Q3 FY22, Zalando’s total number of orders were 58.8 million, compared to 55.8 million in the third quarter of the previous year. The company reported a net working capital of €121.6 million, compared to €118.1 in the previous year’s third quarter.

The proportion of partner businesses contributing to Fashion Store GMV grew by seven percentage points compared with the same quarter last year, underlining the attractiveness of Zalando’s platform for partners and the company’s progress against its strategic objective to grow its partner business share to 50 per cent of Fashion Store GMV by 2025.

Zalando has confirmed its guidance provided on June 23, 2022, for the financial year 2022 with gross merchandise volume expected to grow 3 – 7 per cent to €14.8 – €15.3 billion. Revenue is expected to grow 0 – 3 per cent to €10.4 – €10.7 billion with an adjusted EBIT of €180 – €260 million. The company now expects to reach the lower end of these ranges.

“With consumer confidence at new lows and ongoing inflation, it was a prudent decision to start early with decisive action and measures to support profitability,” said CFO Sandra Dembeck. “Although it’s not crystal clear how consumer spending will play out in the final quarter, we are working hard to execute and deliver on our strategic priorities and financial outlook.”

Fibre2Fashion News Desk (DP)