// Zalando expects full-year profits to come in at the lower end of its target range
// However, sales edged up in its third quarter as the number of active customers grew 8% to exceed 50 million for first time
Zalando, Europe’s biggest online fashion retailer, sales inched up in its the third quarter but it now expects full-year revenues and profit to fall to the lower end of its target range.
Despite the slower profit growth, the number of active customers at the business increased by 8% compared with a year ago, exceeding 50 million for the first time.
Zalando’s loyalty programme, Plus almost tripled its membership as the business took steps to drive profitability.
This attributed helped improve profit performance and softened the impact of declining consumer sentiment amid the cost-of-living crisis.
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Zalando pre-tax profit rose to €13.5 million (£11.8 million) from €9.8 million (£8.5 million) in its third quarter.
Gross merchandise values grew by 7.1% to €3.28 billion (£2.86billion).
The retailer said the introduction of a minimum order value has encouraged customers to increase the size of their basket or pay a delivery fee.
As a result, orders below the minimum order value are now profitable.
Back in August, the business said it would scale back marketing rather than cut jobs as the sector grapples with a consumer spending slowdown.
The online retailer has reduced costs by almost €100 million so far this year.
Zalando co-chief executive Robert Gentz said: “I am proud that we are reaching 50 million active customers and of our progress in deepening our relationships with them. We will continue to carefully navigate through these turbulent times, pushing forward with measures to improve profitability as well as strategic initiatives that inspire and engage with our customers.”
Chief financial officer Sandra Dembeck added: “With consumer confidence at new lows and ongoing inflation, it was a prudent decision to start early with decisive action and measures to support profitability.
“Although it’s not crystal clear how consumer spending will play out in the final quarter, we are working hard to execute and deliver on our strategic priorities and financial outlook.”
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