Zalando (ZAL) Q2 2024 earnings summary

Executive summary

• H1 2024 marked a return to growth, with GMV up 2.4% and revenue up 1.5% year-over-year, driven by demand activation in lifestyle categories, especially Sports, and a timely spring/summer season.

• Adjusted EBIT rose 38.7% to €199.9 million, with margin improving to 4.1%, reflecting margin expansion focus and improved gross margin.

• Active customer base increased by 300,000 quarter-over-quarter to 49.8 million, reflecting progress in the ecosystem strategy.

• B2B segment delivered double-digit revenue growth, with ZEOS expanding into Switzerland and adding a new sales channel.

• Management board changes effective September 2024, with CFO Sandra Dembeck not renewing her contract and succession planning underway.

Financial highlights

• Q2 2024 GMV rose 2.8% year-over-year to €3.84 billion; revenue up 3.4% to €2.64 billion; adjusted EBIT €172 million (6.5% margin).

• H1 2024: GMV €7,133.2 million (+2.4%), revenue €4,884.6 million (+1.5%), adjusted EBIT €199.9 million (+38.7%).

• Gross profit margin improved to 41.6% in Q2 2024; fulfilment costs as a percentage of revenue fell by 2.4pp.

• 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.

Outlook and guidance

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

• H2 profitability expected to be impacted by strategic investments in B2C/B2B and higher fixed costs from new warehouses.

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