Zalando, Europe's biggest online only fashion retailer, today cut its 2018 outlook for a second time in as many months, saying a long, hot summer had taken its toll.
The news wiped as much as 20% off the value of its shares today.
The company's co-CEO Rubin Ritter said a delayed start to autumn meant selling fewer higher-priced cold-weather garments and more discounting.
He noted that German fashion sales were down 17% last week, year-on-year, according to industry publication Textilwirtschaft.
Zalando said higher fulfilment costs were another factor that weighed on profitability.
"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," co-CEO Rubin Ritter told a call for journalists, noting it was set to be a balmy 28 degrees Celsius in Berlin today.
Zalando has begun selling beauty products online and is also investing heavily in logistics and technology as competition heats up, both from e-commerce players like Amazon.com and big chains like H&M.
H&M, the world's second-biggest fashion retailer, yesterday said that its sales bounced back in the third quarter, helped by a new logistics system, as a revamp to meet growing online and budget competition was paying off.
UK rival ASOS also missed analysts' forecasts for sales growth in its latest trading period, saying it had reined in marketing efforts as it focused on ramping up warehousing space in Germany and the US.
The hot summer had already prompted Zalando, launched in Berlin in 2008, to trim its outlook on August 7, when it said that the traditional discounting at the end of the summer season would likely be more pronounced than usual due to the weather.
In a statement last night, Zalando said it now expects revenue growth around the low end of its 20-25% target corridor, compared with a previous forecast for a figure in the lower half of the range.
It sees adjusted earnings before interest and tax (EBIT) between €150-190m, compared with the previous guidance at the low end of a €220-270m range.
For the third quarter, which ends on September 30, it expects revenue growth and adjusted EBIT to be significantly below analyst consensus for 19.8% and minus €2m, respectively.
Ritter said Zalando would keep working to become more flexible to be able to respond to unpredictable weather, saying that Zalando's growth prospects remained intact and it still expects to double sales by 2020.
