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German e-retailer Zalando increases Q1 sales by 24%

May 12, 2016 10:52 AM
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Sales for German online apparel retailer Zalando SE rose 23.7% in the first quarter of 2016 to 796.1 million euros (US$907.6 million) from 643.6 million euros ($733.7 million) in the year-ago quarter.

Zalando, No. 8 in the Internet Retailer 2015 Europe 500, in Q1 further expanded its partner program, which lets selected brands directly sell on the Zalando platform, and has more than 150 partners, including brands like Adidas and Superdry, the company said Thursday. The e-retailer acquired e-commerce software provider Tradebyte Software GmbH this month.

Active customers—those placing at least one order in the past 12 months—numbered 18.4 million in the quarter ended March 31, up 19.5% from 15.4 million in Q1 2015.

Average Q1 order size was 66.5 euros ($75.81) down 2.2% from 68 euros ($77.52), but the number of orders increased 30% to 15.6 million from 12.0 million a year ago.

Consumers on mobile devices accounted for 62.3% of site visits in the quarter, up from 52.6% in Q1 2015.

Earnings before interest and taxes and adjusted for some items fell 31% to 20.2 million euros ($23 million) and the profit margin on that basis was 2.5%, Zalando said in a statement Thursday.

Zalando, which sells products like Nike sneakers and Armani trenchcoats, has seen its margins narrow from 4.5% a year ago as it adds employees and spends more on technology and marketing. The e-retailer has 10,268 employees, up 23.6% from 8,309 a year ago. Zalando aims to make more acquisitions this year after buying Tradebyte Software GmbH this month, managing director Rubin Ritter said on a call with reporters.

“The statement reveals a slowdown in its core market” of Germany, Austria and Switzerland, wrote George Mensah, an analyst at Shore Capital Markets. “The material increase in its staff headcount and expansion in its logistics base may highlight why margin was weaker.”

Bloomberg contributed to this report.

 

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