Zalando warns on profits, shares slump
Online retailer Zalando issued a profit warning on Friday as the ongoing cost-of-living crisis weighed on demand.
Zalando now expects full-year revenues to grow 0-3% to £8.92bn-9.18bn, with adjusted underlying earnings pegged to be £154.0m-223.0m and gross merchandise volume to grow 3-7% to £12.7bn–£13.13bn as it no longer assumes a rebound of consumer confidence in the short-term.
For the second quarter, the company expects gross merchandise volume growth, revenue growth, and adjusted underlying earnings to fall significantly short of analysts' estimates.
Co-chief executive Robert Gentz said: "While this new environment is creating a negative impact on our financial performance, our strategy and long-term goals are unchanged. Our vision remains to be the starting point for fashion in Europe.
However, Gentz added that there were still "many untapped opportunities" in the fashion market that Zalando could capture.
"By driving efficiencies across the company and selectively investing through-cycle, we will be even better positioned long-term to execute against our strategy. We are embracing the challenges and adapting to emerge stronger," he added.
As of 0920 BST, Zalando shares were down 14.41% at €21.86 each.
Reporting by Iain Gilbert at Sharecast.com