BERLIN (Reuters) – German online fashion retailer Zalando on Wednesday reported a drop in quarterly profits as it offered discounts to try to keep customers buying online after physical stores reopened in the wake of the easing of coronavirus blockages.
Europe’s largest fashion e-commerce player said its adjusted third-quarter operating profit fell to 9.8 million euros ($ 11.35 million) from 118 million a year ago, while sales rose 23% to 2.3 billion euros, slightly ahead of the analysts’ average estimate of 2.24 billion.
Zalando said its operating profit was in line with the figure posted in the third quarter of 2019, before the pandemic helped the company post exceptional results.
He said there was a “fierce promotional environment” in many European markets, adding that the unusually warm weather of the period had limited demand for full-priced fall / winter items and increased sales of spring / winter clothing. been at a reduced price.
Zalando spent more on marketing over the period, also due to its recent launch in six new markets in Eastern Europe.
Zalando stock fell 1.7% at the start of the Frankfurt session at 06:15 GMT.
“Despite rising inflation and supply chain uncertainties, we remain confident in achieving our improved outlook for the full year” finance Chief David Schroeder said in a statement.
Zalando reiterated that he expects 26% to 31% growth in annual revenue to reach 10.1 billion to 10.5 billion euros and expects adjusted profit before interest and taxes to reach the top half of its € 400 million to € 475 million range.
British rival ASOS warned last month that supply chain pressures and consumer reversion to pre-pandemic behavior could cut 2022 profits by more than 40%.
($ 1 = € 0.8636)
(Reporting by Emma Thomasson; Editing by Riham Alkousaa and Ramakrishnan M. and Louise Heavens)