Zalando SE shares erased their year-to-date gains after reporting first quarter results on Thursday, as weak consumer sentiment drove up the German online fashion retailer’s inventory levels.
(Bloomberg) — Zalando SE shares erased their year-to-date gains after reporting first quarter results on Thursday, as weak consumer sentiment drove up the German online fashion retailer’s inventory levels.
Shares fell as much as 9.3% and were down 8.3% to €32.16 at 12:48 p.m. in Frankfurt.
A 5% increase of inventory levels during the period offset cost control measures and strong gross margins, Citigroup Inc. analyst Catherine O’Neill said in a note.
Zalando, which sells a mix of its own-brand and third-party apparel, has been hurt by rising inflation rates and consumers returning to brick-and-mortar shopping after a pandemic-era shift online. Shares of other e-commerce retailers, including THG Plc, Asos Plc, and Boohoo Group Plc, also declined Thursday.
The Berlin-based platform beat estimates on its first-quarter adjusted earnings and confirmed its full-year guidance. It reported an adjusted loss before interest and taxes of €700,000 ($776,000) for the period, Zalando said in a statement Thursday. That compares with an average estimated loss of €17.8 million by analysts surveyed by Bloomberg.
Revenue for the period was €2.26 billion, up 2.3% from a year earlier and in line with estimates.
“As overall demand remains muted, we continue our focus on driving sustainable efficiencies in fulfillment and marketing,” said Zalando Chief Financial Officer Sandra Dembeck in the statement.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.