BERLIN (dpa-AFX) - Thanks to its cost-cutting measures at the beginning of the year, Zalando is back in the black in its day-to-day business. The online fashion retailer was also able to significantly limit its bottom line loss. "Our growth initiatives are taking effect and contributing to the results. This encourages us on our path," said CFO Sandra Dembeck according to the press release. Zalando shares rose by around 7 percent in early trading on Tuesday.

According to a company statement on Tuesday, the DAX-listed group earned 28.3 million euros in the first quarter, adjusted for special effects and before interest and taxes (EBIT), following a small loss in the same period last year. The company therefore performed better than analysts had expected. The net loss was reduced from 38.5 million euros to 8.9 million euros.

This was partly due to lower logistics costs. In the past, for example, Zalando had focused on a smaller selection of shipping partners. In addition, the Group's own logistics provider Zeos is gaining in importance.

However, the Group also spent more money on marketing. This was necessary to boost demand and strengthen brand awareness, argued the Management Board. In the first quarter, the Group benefited from the better weather, which enabled an early start to the spring/summer season.

However, this is still not enough to keep customers happy. The number of active customers - i.e. those people who have placed at least one order in the past twelve months, excluding cancellations - fell by 3.3 percent to 49.5 million. In a telephone conference with journalists, CFO Dembeck argued that Zalando had focused on profitable growth and that this had led to a certain amount of churn. In the past, the Group had introduced minimum order values, for example, in order to further increase the basket value.

The gross merchandise value (GMV) climbed accordingly in the first quarter by 1.3 percent to just under 3.3 billion euros. However, the effect was not reflected in turnover, which fell by 0.6% to 2.24 billion euros. The reason for this was that sales of all goods, including those of partners (GMV), developed better. Income from the sale of products from the Group's own retail business plus commissions, on the other hand, lagged behind. On average, analysts had hoped for more in terms of turnover.

Baader Bank expert Volker Bosse interpreted this as a weak start to the year, characterized by the weak economic situation in Germany and poor consumer sentiment. The development of sales and gross merchandise volume was poor, as expected.

The management confirmed its forecast for the year. Due to the ongoing consumer slump, sales and gross merchandise value (GMV) are likely to remain at the previous year's level in the worst-case scenario. In 2023, Zalando had reported 14.6 billion euros in gross merchandise value and 10.1 billion euros in revenue. However, Co-CEO Robert Gentz and CFO Dembeck are also holding out the prospect of growth of up to five percent. Adjusted operating profit (EBIT), on the other hand, is expected to rise to between 380 and 450 million euros - compared to just under 350 million in the previous year./ngu/mne/mis