Zalando Revises 2018 Guidance Against Challenging Market Backdrop

• Long and hot summer and delayed switch to fall/winter season weigh on revenue growth and adjusted EBIT
• FY 2018: Revenue growth expected around the low end of 20-25% target growth corridor (previously: lower half), significantly outperforming overall fashion market
• FY 2018: Expected Adjusted EBIT EUR of 150-190 million (previously: low end of EUR 220-270 million target range)

BERLIN, SEPTEMBER 17, 2018 // Zalando SE, Europe’s leading online platform for fashion and lifestyle, revises its guidance for 2018, as the extended and unusually hot summer period and a delayed switch to the fall/winter season weigh on revenue growth and adjusted EBIT.

August and September 2018 have been characterized by continued high temperatures across Europe, reducing consumer demand as demonstrated by shrinking fashion sales in the overall market during this period and leading to higher discounts than in the previous year. In addition, high temperatures delayed the start into the fall/winter season, with typically full price and higher margin merchandise at the beginning of the season

Despite these challenging market conditions, Zalando continues to outperform the overall fashion market significantly. Important long-term growth indicators such as the partner program share and the number active customers continue to develop positively. This is in line with the company’s long-term strategy to invest into market share gains. However, higher discounts and higher fulfillment costs currently impact profitability. 

Rubin Ritter, Zalando Co-CEO, said: “While current trading in the third quarter clearly does not reflect our ambition, our growth story remains intact. Despite the challenging market environment, we continue to invest in growth and remain committed to our target of doubling the business by 2020.” 

Pursuant to current estimates of financial results for the third quarter of 2018, and expectations on trading in the current market environment, the Zalando Management Board reassessed the company’s outlook for 2018.

For the fiscal year 2018, Zalando now expects revenue growth around the low end of its 20-25% target growth corridor (previously: in the lower half of such corridor) and an adjusted EBIT of EUR 150-190 million (previously: at the low end of a EUR 220-270 million target range). Capital expenditure (Capex) and net working capital guidance remain unchanged.

For the third quarter 2018, management expects revenue growth and adjusted EBIT to be significantly below analyst estimates (company-compiled median analyst estimates at the date hereof: 19.8% revenue growth, EUR -2 million adjusted EBIT).

All figures reported herein are preliminary and unaudited. Zalando will report its financial figures for the third quarter on November 6, 2018.

Adjusted EBIT, capex and net working capital have the meaning set out in our Half-Year Report 2018, p. 49/50, which is available online at https://corporate.zalando.com/en/investor-relations.