In This Article:
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Zalando SE (ZLDSF) reported a strong Q1 performance with a 6.5% year-on-year growth in Gross Merchandise Volume (GMV) and a 7.9% increase in revenue.
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The company achieved an adjusted EBIT of 47 million, representing a margin of 1.9%, with a year-on-year improvement of 0.7 percentage points.
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Zalando SE (ZLDSF) successfully rolled out its upgraded loyalty program, Zalando Plus, to 13 markets, with more than 15% of the customer base participating.
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The B2B segment recorded a revenue growth of 11.6%, significantly ahead of group revenue growth, driven by logistics and software solutions.
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The proposed acquisition of About You is progressing as planned, with regulatory approval anticipated by summer, which aligns with Zalando SE (ZLDSF)'s strategy to build a leading ecosystem in fashion and lifestyle e-commerce.
Negative Points
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Despite the growth, the spend per customer remained flat at around 296, indicating challenges in increasing customer spending.
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Marketing costs increased by 0.5 percentage points, reflecting higher investments in performance marketing and brand visibility campaigns.
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The company's cash and cash equivalents decreased by 600 million from Q4 2024, partly due to inventory purchases and restricted cash related to the About You tender offer.
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There is a potential risk of overstocking as inventory levels increased, reflecting preparations for the spring-summer season.
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The geopolitical and macroeconomic environment remains fast-changing, posing potential risks to future performance despite no notable impact observed so far.
Q & A Highlights
Q: Can you provide an update on current trading and whether the strong momentum at the end of the quarter has been maintained? A: David Schroeder, Co-CEO and Interim CEO, stated that they are pleased with the start of the year, particularly with a strong March. There have been no major changes in consumer demand, and they expect to deliver mid-single-digit growth in Q2, aligning with their full-year targets.
Q: How much of the gross margin increase was due to underlying factors versus ZMS revenue growth? A: Woland Lou, VP Finance, explained that the gross margin increase was driven by improvements in the underlying retail gross margin, growth in the partner program, and a strong quarter for ZMS, which has a high gross margin profile. The loyalty program had a minor impact on revenue growth and gross margin for Q1.