Zalando: shares plunge after 'challenging' quarter

(CercleFinance.com) - Shares of Zalando dropped by over 6% on Tuesday after the German fashion retailer said it had a "challenging" third quarter.


In the past quarter, Zalando's revenues increased by 11.7% to 1.2 billion euros, with gross merchandise volume up 16.6%.

The performance was lower than expected, mainly due to the unusually hot summer period that delayed the switch to the fall/winter season, the group said.

As a result, Zalando posted an adjusted EBIT loss of 38.9 million euros over the quarter, on the back of a margin decrease driven by higher fulfillment costs.

"We are clearly not happy with our financial results in the third quarter," said Zalando Co-CEO Rubin Ritter said.

The group said it is now focusing on pulling off a "strong finish" to the year.

For the fourth quarter, Zalando expects to grow revenues by between 20% and 25%, although the group still expects revenue growth in the lower end of its 20-25% target growth corridor for the full year.

After the report, its shares were down 6.6% at 32.6 euros in Frankfurt.

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