European clothing retailer Zalando can meet consensus estimates, said Barclays, despite current headwinds in the sector and profit warnings from competitors.
Analysts at the bank noted that consumer sentiment and declining demand has been well flagged by warnings from ASOS and Boohoo, but its data suggests a “more mixed outlook” for the Berlin-based retailer.
Changes in weather support Zalando’s autumn/winter range, which “has an outsized impact on profitability and Zalando’s ability to meet FY22 guidance.”
As a result, Barclays is “cautiously optimistic that Zalando will meet consensus” and forecasts 6.5% gross merchandise value growth in the third quarter, at the lower end of Zalando’s guidance of 6% to 12%.
Barclays remained equal weight on Zalando, with a target price set at €27, down from €28.