German online fashion retailer Zalando SE on Aug. 1 raised its profit forecast for fiscal 2019 despite reporting second-quarter earnings that missed analysts' expectations.
Zalando lifted its profitability outlook to the upper half of its adjusted EBIT range of €175 million to €225 million. It also confirmed its gross merchandise volume growth guidance of 20% to 25% and said it now expects revenue growth to be "around the low end" of this range after previously expecting it "at the low end."
The company disclosed the revised guidance as it reported a drop in second-quarter net income attributable to the company's shareholders to €45.5 million from €51.9 million a year ago. The figure came in below the S&P Global Market Intelligence net income estimate of €56.3 million, with four analysts reporting.
Diluted EPS for the quarter was 18 euro cents, also down from 20 euro cents a year ago and lower than the Market Intelligence consensus EPS estimate of 24 euro cents.
Zalando's group revenue for the second quarter rose to €1.60 billion year over year from €1.33 billion. Site visits grew 34.3% to 986.4 million compared to the comparable period a year ago while active customers also increased 15.2% year over year to 28.3 million.
"The growth of our Partner Program leads to a more attractive and diverse assortment for our customers. We will continue to see GMV growing faster than revenues, fully in-line with our long-term strategy," Zalando CFO David Schröder said in a statement.
Zalando plans to build a new warehouse in the Netherlands to cater to customers across its Western European markets. The company is testing same-day evening delivery in the Zurich region in Switzerland.
More than 1,300 offline stores sell their items on Zalando.
Shares of the online retailer jumped as much as 15.91% to €48.31 following its earnings announcement before closing up 13.32% to €47.23.