Online fashion retailer Zalando has reported a 58% drop in second-quarter operating profit and lower sales but said it expected to return to growth and improved profitability in the second half of the year.
Zalando's gross merchandise volume was flat at €3.8 billion in the quarter compared with the same time last year, while sales fell by 4% to €2.6 billion.
Adjusted operating profit (EBIT) dropped to €77.4m from €184.1m but marked a rebound from a first quarter loss of €52m.
The company cited lower consumer confidence, inflation and supply bottlenecks hitting demand after the coronavirus pandemic helped it record a bumper year in 2021.
"Life is becoming more expensive and consumers are reluctant to consume. We feel that," co-CEO Robert Gentz said today.
Europe's largest fashion online retailer said the number of its active customers grew by 11% on the year to over 49 million euros, while the membership of its loyalty programme, Zalando Plus, rose by 164% in the quarter to more than 1.5 million.
To cut costs, the company said it had reduced marketing spending, introduced a minimum order value and was improving efficiency across its European logistics network.
"We are focused on efficiency and margin improvement measures that will help us strengthen our profitability in the second half of the year," Chief Financial Officer Sandra Dembeck said in a statement.
Zalando confirmed guidance lowered in June, forecasting a sales increase between 0% and 3% and an adjusted EBIT of €180-260m.
