Zalando: little growth or even crimp in 2023
Zalando saw its earnings before interest more than halve last year. The platform’s sales increased slightly by 3 percent compared to a 34 percent growth in 2021. After a tough year, the fashion giant predicts revenue could shrink in 2023.
Zalando released its annual numbers today. The retailer only recently announced it is cutting hundreds of jobs due to an economic slowdown after the pandemic. In addition, the ecommerce platform is increasing its rates for merchants this summer.
EBITDA more than halved
In the past year, Zalando’s earnings before interest (EBITDA) came down to 184,6 million euros. That is a 60 percent decrease compared to 468,4 million euros the year before. Gross profits dipped to 16,8 million euros. This is in stark contrast with a whopping 234,5 million euros in 2021.
Sales grew 3 percent
The number of orders was up, although the basket size is lower.
Above the line, Zalando’s gross merchandise value grew by a mere 3,2 percent to 14,7 billion euros. The platform’s revenue comes down to 10,3 billion euros. This is a slight decrease of 0,1 percent compared to the year before.
On the other hand, Zalando’s customer base grew from 48 million to 51 million. The number of orders was also up in 2022, although the average basket size is lower.
Possible shrinkage in 2023
“We will return to double-digit growth in the medium term.”
After years of significant growth, Zalando’s numbers are taking a hit after the pandemic. For 2023, the company expects a maximum growth of 4 percent or even to shrink by 1 percent. The fashion retailer says it will focus on expanding customers of its loyalty program, Zalando Plus. These customers spend three times as much as the average user.
“Our long-term ambition remains the same”, co-CEO Robert Gentz says. “We are confident that we will return to double-digit trading volume growth in the medium term.”