BERLIN — Ongoing investments, including a new premium, fee-based membership program, continued to impact Zalando’s operative earnings performance in the second quarter.
In preliminary figures released Tuesday, the Berlin-based e-tail giant said adjusted earnings before interest and taxes for the quarter reached 80 million euros to 86 million euros, corresponding to an adjusted EBIT margin of 7.3 percent to 7.8 percent. This compares to an adjusted EBIT of 81 million euros and an EBIT margin of 8.8 percent in the same prior-year period.
Zalando grew second-quarter sales 19 percent to 21 percent, to hit 1.09 billion euros to 1.11 billion euros.
For the first half of this year, Zalando is expecting adjusted EBIT of 100 million euros to 106 million euros, compared to 101 million euros in 2016, and an adjusted EBIT margin of around 4.8 percent to 5.1 percent, against 5.9 percent in the first six months of 2016. Sales are projected to grow 21 percent to 22 percent to 2.07 billion euros to 2.09 billion euros, compared to 1.71 billion euros in 2016.
Company co-chief executive officer Rubin Ritter said in a statement: “We are pleased with the performance in the first half of 2017 and continue to invest in order to meet our ambitious growth targets for the full year and beyond,” set at 20 percent to 25 percent. He said investments in the online platform’s fulfillment capabilities and the new membership program Zalando Zet “are the cornerstones for future growth.”
Zalando Zet is another game-changer for the online fashion platform that made waves in 2008 with its free delivery/100 day free return policy in that it now goes in the opposite direction: Members must pay a fee to join. Zalando Zet offers customized premium services such as faster delivery, including same-day service; pick-up of returns on demand, early access to sales, and personal fashion advice from experts via telephone or Facebook chat.
In the first “by invite only” roll-out phase in Berlin, Leipzig, Frankfurt and Hannover, customers will be able to test the program at no additional charge, after which they can become members for 19 euros a year. Zalando said further cities in Germany will follow within the next months.
Final figures for the second quarter will be published by Zalando on Aug. 10.