Zalando (ZAL) Q2 2024 earnings summary

Executive summary

• Achieved renewed growth in H1 and Q2 2024, with GMV up 2.4%–2.8% and revenue up 1.5%–3.4% year-over-year, driven by strong performance in Sports, Beauty, and Designer categories, and double-digit B2B growth.

• Adjusted EBIT rose to €199.9 million in H1 and €172 million in Q2, reflecting margin expansion and improved profitability after a challenging 2023.

• Active customer base increased by 300,000 quarter-over-quarter to 49.8 million, with higher average basket size (+4.6% to €60.80).

• Strategic focus on expanding lifestyle categories, leveraging AI-driven content, and enhancing customer engagement through new features and marketing investments.

• Management changes include CFO Sandra Dembeck's planned departure and board adjustments to support the ecosystem strategy.

Financial highlights

• Q2 GMV: €3.84 billion (+2.8% YoY); Revenue: €2.64 billion (+3.4% YoY); Adjusted EBIT: €172 million (6.5% margin); H1 GMV: €7.13 billion (+2.4% YoY); Revenue: €4.88 billion (+1.5% YoY); Adjusted EBIT: €199.9 million (+38.7% YoY).

• Group gross margin improved to 41.6% in Q2; fulfillment costs reduced by 2.4pp; marketing costs increased by 2.1pp.

• Free cash flow reached €441 million in Q2; cash and cash equivalents at €2.6 billion at quarter-end.

• Net working capital improved to -€488 million, mainly due to lower inventories and higher trade payables.

• CapEx in Q2: €41 million; H1 CapEx: €100.1 million; share buyback of €100 million and convertible bond repurchase of €84.2 million completed.

Outlook and guidance

• Full-year 2024 guidance reiterated: GMV and revenue growth of 0%-5%, adjusted EBIT €380–450 million, CapEx €250–350 million, and negative net working capital.

• H2 profitability to be impacted by strategic investments and higher fixed costs from new warehouses.

• Expects continued acceleration in H2, with main seasonal impact in September.

• Gross margin expansion and fulfillment cost leverage to continue, but less pronounced in H2.