Zalando blames weak revenue growth on long hot summer
Updated : 19:09
Europe’s leading online platform for lifestyle and fashion issued a profit warning on Tuesday, blaming the long hot summer for weak revenue growth.
Zalando CEO Rubin Ritter said in a press release on Monday night that the high temperatures during August and September have delayed the launch of the higher-priced winter season clothing, impacting sales.
"We don’t know when the season will start and when fall/winter will actually kick in. This is a problem for the entire industry," Ritter said on a call for journalists.
As a result, Zalando shares traded as much as 20% lower on Tuesday. The firm said it now expects revenue growth around the low end of its 20% to 25% percent target corridor for its Q3 results (30 September).
It sees adjusted earnings before interest and tax (EBIT) between €150m and €190m, compared with the previous guidance for profits at the low end of a $220m to $270m range.
Nevertheless, management remained confident that Zalando would continue to significantly outperform its fashion peers.
“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,” added Ritter.