Zalando Growth Slowed In The Two Quarter And Share Price Fell 10%

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The two quarter revenue growth of SE (ZAL.DE) has slightly deviated from the annual target, even though the group announced the launch of Amazon.com Inc. (NASDAQ:AMZN).

The Prime members plan to boost revenue and customer growth and prevent the stock price from falling to a maximum of 9.7% on Tuesday, the biggest decline in more than a year.

Zalando SE co chief executive, Rubin Ritter Ritter, revealed that the new warehouse has not yet played its maximum capacity during the period, and Easter and other public holidays have slowed growth in the two quarter.

In the two quarter, the revenue reached 10.91-11.09 billion euros, which basically met the market expectations of 1 billion 100 million euros, also increased 19% to 21% over the same period last year, but rose less than 26% in the 23% and four quarter of the first quarter, and the Group expects annual revenue to grow by 20%-25%.

Rubin Ritter stressed that the overall growth of 21%-22% in the first half of the fiscal year is still in line with the established target. The median income will increase from 1 billion 713 million euros in the same period last year to 20.71-20.89 billion euros.

The adjusted EBIT in the two quarter was 8000-8600 euros, while the market forecast was $85 million. The adjusted EBIT profit margin will be between 7.3%-7.8%, which is at least 100 basis points lower than that of 8.8% in the same period last year.

In the medium term, EBIT 1.00-1.06 is adjusted to be 1.00-1.06 billion euros, and the profit margin is between 0.

The group still maintains annual revenue growth of 20%-25% and adjusted EBIT profit margin between 5.0%-6.0%.

But Morgan Stanley and Morgan Stanley remind investors in the latest research that there is a risk of downgrading performance expectations.

Rubin Ritter said in its performance update that its performance in the first half of the fiscal year was satisfactory and that the group would continue to invest to achieve ambitious growth goals.

Last month, Zalando SE first proposed the medium-term target of doubling annual revenue to 7 billion 200 million euros by the end of 2020.

In addition to the strategic focus of B2B business, Rubin Ritter pointed out that investment in performance and membership projects such as "Zet" will be the cornerstone of future growth.

In the coming months, the group will launch a pilot scheme called "Zet" in four cities in Germany, so that customers can enjoy more fast delivery, more convenient return and personal fashion suggestions at an annual fee of only 19 euros.

As early as 2008, the group began offering free shipping and 100 days' return service.

At present, Germany's Amazon.com charges 69 euros for annual membership fees to Prime members. The annual fee is 49 euro before February of this year, and the annual fee is only 29 euros when the membership plan is landed in Germany 10 years ago.

In the near future, the group will take the lead in the Prime Wardrobe on the US market. This service, which is free to deliver customers' selected products to customers and try them out, will not only make the American apparel retailers tremble, but also announce that the price of European electric business partners such as Zalando SE ZAL.DE (ZAL.DE) and ASOS PLC (ASC.L) on the same day will also drop sharply.

With the completion of new warehouses in Sweden and Berlin, Zalando SE will have 8 logistics centers in Europe with the ability to handle 8 billion euro sales.

The group is also making use of this huge Pan European logistics network to generate revenue. The group revealed that Vero Moda and Jack & Jones JACK&JONES and other brands A/S parent group has become the first major customer of its logistics service, and the two sides have also established a joint venture company operating B2B B2B wholesale platform FashionTrade.com.

Bestseller A/S bestseller group boss Anders Holch Povlsen is the major shareholder of Zalando SE. According to the data, he holds 10% of the shares.

Under the multiple efforts of expanding the third party brand business, continuously improving logistics warehousing capacity and increasing value-added services, the ultimate goal of Zalando SE is to achieve 20 billion euros in revenue.

At the time of the deadline, Zalando SE (ZAL.DE) fell 8.88% to 38.95 euros in midday, narrowing the cumulative increase in 2017 to 12 and 7.3% to 7.3%, respectively.

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