Zalando’s share prices have dive-bombed nearly a fifth after the company warned that full-year earnings were likely to be over €70 million less than previous estimates.
The online fashion giant cautioned investors last night that it expected EBITDA to come in between €150 million (£133 million) and €180 million (£160 million), significantly below its previous guidance of €220 million (£195 million) to €270 million (£240 million).
Meanwhile its sales growth for the year is expected to come at the low end of between 20 and 25 per cent, once again undercutting analysts expectations.
This sent share prices dropping 18.9 per cent in morning trading to their lowest level in over two years.
Zolando’s chief executive Rubin Ritter attributed this substantial fall to an extended run of hot weather, making the transition between seasons difficult to predict and leading to fewer big ticket item purchases like winter coats and forcing heavy discounting.
“We don’t know when the season will start and when fall/winter will actually kick in. This is a problem for the entire industry,” he said.
“While current trading in the third quarter clearly does not reflect our ambition, our growth story remains intact.
“Despite the challenging market environment, we continue to invest in growth and remain committed to our target of doubling the business by 2020.”
This follows a tough couple of months for its investors, after its stock value took another major hit in August following a similar profit warning, leading to an overall drop in share values of 30 per cent since July.
Despite its poor performance and waning investor confidence, Zolando was adamant it continued to outperform the wider fashion sector, posting €2.5 billion (£2.22 billion) in sales in the first half of 2018.
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