German online fashion e-tailer Zalando saw its gross merchandise volumes (GMV) rising in Q2, it said on Tuesday, when it also raised its full-year guidance to include newly acquired About You.

It’s working to grab an even bigger share of the €450 billion European online fashion sector and in Q2, GMV rose 5% to €4.1 billion, with revenue up by 7.3% to €2.8 billion. And adjusted earnings before interest and taxes (adjusted EBIT) reached €186 million after €172 million a year earlier, with a “stable” profit margin of 6.5%.

The company said its Business-to-Consumer (B2C) ops saw a 6.1% “surge” in the number of active customers, reaching a new high of 52.9 million. This resulted in a 6.8% rise in B2C revenues to €2.6 billion and an adjusted EBIT of €174 million, an improvement of €9 million year-on-year.

That was helped by continued investment in customer experience and it expects this week’s launch of its AI-driven discovery feed that it says will “deliver even more personalised inspiration and boost organic customer engagement” to help it further in Q3.

B2C growth in the second quarter was also supported by strong progress in its two other growth pillars, which are “differentiation through quality and lifestyle expansion”. Its upgraded loyalty programme reached more than 10 million customers at the end of the quarter as it rolled out to more markets.

It also delivered “over proportional growth” in its Lounge, Designer, and Beauty propositions, “making progress on building out more areas that address more lifestyle needs of customers, thus enabling Zalando to capture a higher share of customers’ wallets”.

Meanwhile Business-to-Business (B2B) maintained “strong momentum, driven by double-digit growth in ZEOS Fulfilment”. The launch of a new Shopify application that connects Shopify merchants directly to the ZEOS platform was also key.

B2B revenues increased 12.2% to €262 million. Adjusted EBIT was €11 million, with the margin increasing by 1.3 percentage points to 4.3%.

And there’s plenty of potential for this to rise. UK retailer Next is now leveraging Zalando’s fulfilment infrastructure for its largest mainland Europe market, Germany, after already using ZFS for the majority of its Zalando-based business. In the second half, it will expand the collaboration to include its own webshop and additional European marketplace business.

Finally, following the About You acquisition in July, the company has issued its first full-year 2025 guidance for the combined group. It expects annual GMV of €17.2 billion-€17.6 billion, revenue of €12.1 billion-€12.4 billion, and adjusted EBIT of €550 million-€600 million. Forecast GMV volumes up by 12%-15% will be a big step forward from the previously expected range of 4%-9%.

Author Credits- Sandra Halliday
FASHION NETWORK