Zalando is the “clear market leader” in online European apparel, according to Deutsche Bank, despite profits reaching a four-year low.
Analysts at the German bank said it continues to believe that Zalando's "scale, technological, and logistics investments provide a significant competitive moat for the business," with 2023 another transition year.
However, Deutsche Bank said it is concerned that recovery in sales will be driven by improved consumer sentiment rather than any company-specific initiatives.
Analysts raised full-year 2023 estimates for adjusted EBITDA by 2% to €334mln, at the upper end of the €280mln to €350mln range due to “confidence in the ability to deliver gross margin expansion as the promotional environment normalises.”
Yesterday, the European online retailer reported that its underlying profits fell by 60% to €184mln in 2022 as consumers returned to in-store shopping.
Having reduced its guidance earlier in the year, Zalando’s underlying profits reached the lower end of its €180mln-€260mln forecast and fell short of the City’s consensus of €194mln.
Revenues dropped slightly from €10.35bln in 2021 to €10.34bln last year, whilst gross merchandise volumes (GMV) increased by 3% to €14.8bln.