Zalando, lifestyle evolution drives Q2. And opens a tech hub in China

In the second quarter of 2024, Zalando gathered confirmation of its new strategy, that of becoming an ecosystem (flanking its B2c business with B2b) and focusing on a lifestyle dimension to meet the new needs of its customers. The figures for the period April-June 2024 show an increase, albeit modest, in both gross merchandise value (gmv, the value of sales before tax), which rose 2.8% to EUR 3.8 billion, and turnover (+3.4% to EUR 2.6 billion), and an improvement in profitability: adjusted earnings before interest and taxes (adjusted EBIT) rose to EUR 171.6 million compared to EUR 144.8 million in the same quarter last year. The EBIT margin was 6.5% of sales (+0.8 points over Q2 2023). The guidance for 2024 is therefore confirmed: the top management expects an increase in Gmv and turnover between 0 and 5% and an Ebitbetween EUR 380 and 450 million..

Only a few weeks before the start of the second quarter, during the FY23 announcement, the German retailer had presented a new development strategy focused on diversification and technology. This strategy seems to be paying off: B2c sales increased by 2.8% to €2.4 billion compared to the same period a year ago, while adjusted EBIT rose to €165.2 million, with a margin of 6.8% for the quarter. Among the successful segments is sport: in June Zalando recorded its best monthly performance ever in the sportswear sector, thanks to this summer's sporting events (European Football Championships, Olympics) and ad hoc communication campaigns. B2b sales, on the other hand, increased by 10.3% to EUR 233.8 million compared to the same period last year, while adjusted EBIT fell to EUR 7.1 million from EUR 15.5 million in Q2 2023, mainly due to upfront investments. Zeos - this is the name of the logistics infrastructure - opened its 12th market, Switzerland.

"The positive response from customers and brand partners in Q2 confirms precisely this view," said Robert Gentz, co-CEO of Zalando. Our B2c customers are excited about the quality brands added on Zalando, spending time with new digital tools and content, and embracing the expanding lifestyle offering in categories such as sports, design and beauty. We also recorded double-digit growth in B2b demonstrating that both growth vectors are performing well".

Among its planned investments Zalando certainly has those in technology: after those made in artificial intelligence for the Zalando Assistant, powered by OpenAI's large-scale language models, the retailer plans to consolidate its network of technology centres and open a new location in Shenzhen. "In this new centre, Zalando will be able to employ local expertise in social commerce and combine it with deep knowledge of the European market so as to offer European customers increasingly personalised inspiration and entertainment," the quarterly data release reads.