Zalando has increased its full-year earnings guidance following a surge in online shopping during the Covid-19 pandemic.
Online fashion retailer Zalando has said it expects adjusted earnings before interest and tax of between €250m and €300m for 2020.
The German company, which has a growing technology hub in Dublin, announced yesterday (15 July) that it has upgraded its full-year expectations after “exceptionally strong and profitable growth” during the second quarter.
Zalando’s original targets for gross merchandise volume (GMV) and revenue growth this year were both between 10pc and 20pc. However, as the Covid-19 pandemic has prompted more people to shop online, the Berlin-based retailer now expects GMV to grow by between 20pc and 25pc and predicts revenue will grow by between 15pc and 20pc.
In a statement, the company said customers are increasingly turning to digital services. “As a result, Zalando has seen the number of new customers grow significantly over the past months. In the second quarter, more than 3m new customers shopped at Zalando.”
In preliminary figures for the second quarter, it said that revenue rose to between €2.01bn and €2.05bn, up from €1.60bn in the same quarter last year.
“The high number of new customers shows that we offer a compelling customer experience in these challenging times,” said David Schröder, Zalando’s chief financial officer.
“Due to prevailing health and safety concerns, customers generally like to shop online … As a result, we were able to successfully scale our platform business in the second quarter.”
New e-commerce opportunities
The Berlin-based company isn’t the only retailer reaping the benefits of the current circumstances. Online shopping has been soaring worldwide amid the Covid-19 pandemic, leading to many companies pivoting their physical commerce efforts to digital strategies.
In May, Canadian e-commerce business Shopify announced that revenue was up 47pc year-on-year in the first fiscal quarter of 2020. Start-ups are also using this as an opportunity to help other companies make the transition to e-commerce, while other online retail start-ups such as Dublin-based Bezzu are now in a position to expand operations.
In Ireland, the Government launched the Covid-19 Online Retail Scheme, a fund for retailers with a physical store looking to increase their digital presence. At the beginning of July, Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar, TD, announced that 183 retailers were approved for a total of €6.5m in funding through the scheme.