Online retailer Zalando posts best first quarter

Shares in Zalando leapt 16 per cent after Europe's largest online fashion retailer reported it had its strongest ever first quarter and expected to beat expectations for the second quarter in a row.

The German group, which ships shoes, handbags and clothing to about 15m customers in 15 European countries, said that it in the three months to the end of March its revenues came in between €635m and €648m.

That range is 27 to 29 per cent higher than the €501m it managed in the same period a year earlier, and well ahead of Zalando's forecast that it would grow at an overall rate of between 20 and 25 per cent this year.

Zalando rushed out the preliminary numbers - which are unaudited - ahead of the earnings release date on May 12, under German disclosure rules that require the release of information that might materially affect share prices. More detailed figures will be released on that date.

Rubin Ritter, who sits on Zalando's management board alongside founders David Schneider and Robert Gentz, said in March that the company would continue to focus on growth above profitability in 2015.

However, Zalando said on Thursday that it had experienced a strong start to the spring/summer fashion season, allowing it to post an adjusted operating profit of €25m-€39m for the first quarter, up from a loss of €23m in the same period last year.

"We have never had such a strong first quarter," said Mr Ritter. "The development in March in particular shows that we have strong growth momentum."

The first-quarter profit - the first time Zalando has posted a profit in the opening three months of the year - mark the latest step in Zalando's development from a start-up founded in a Berlin flat-share to Europe's largest online fashion retailer.

Zalando listed on the Frankfurt stock exchange last October in one of Europe's biggest tech floats in years. It said in March that it would embark on a "massive" hiring spree focusing heavily on tech experts. It expects to boost its total staff from 7,500 to about 10,000 by the end of the year.

Zalando also plans to channel investment this year into improving the speed with which it can make deliveries to customers, as well as broadening it range of products.

Shares in the group were up 16 per cent at €28.40 in afternoon trading in Frankfurt.

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