Online fashion marketplace Zalando exceeded analyst estimates for quarterly profit today thanks to growth in its sports, beauty and designer categories and improved inventories, sending shares up as much as 7% in morning trading.
Zalando has focused on higher-priced brands and sportswear as it competes with low-priced retailers such as Shein.
Gross merchandise volume - a key revenue metric for the total value of all goods sold - rose 2.8% on the year to €3.8 billion in the second quarter, while revenue grew 3.4%.
That was driven by double-digit percentage growth in the sports category, CFO Sandra Dembeck said on a media call.
The group expects overall growth to keep accelerating in the second half of 2024.
Zalando launched sports campaigns in major European cities in the quarter, featuring soccer stars like Robert Lewandowski and David Alaba, to capitalise on events such as the UEFA Euro 2024 soccer tournament and Olympic Games this summer.
Beyond a boost from the Euro Cup, the company saw a "very strong performance" in running wear, Dembeck said.
In recent quarters, Zalando launched sports brands such as Lululemon, Hoka, and On Running and introduced its own sports collection.
It reiterated that it expects gross merchandise volume and revenue to grow 0% to 5% this year, with adjusted earnings before interest and tax of between €380m and €450m.
Quarterly adjusted EBIT rose 18.5% on the year to €171.6m, beating expectations by 3%, analysts noted, while active customers rose for the first time on a quarterly basis since 2022 to 49.8 million.
