Zalando will focus on profitability after fall 2022

BERLIN, March 7 (Reuters) – Zalando, Europe’s biggest online fashion retailer, will focus this year on improving profitability after slumping profits and sluggish sales last year.

The company’s adjusted group profit before interest and tax (EBIT) fell 60.1% last year to 184.6 million euros ($197.3 million), with revenue down 0 .1%, it announced on Tuesday, in line with the updated forecast in November.

The EBIT margin was 1.8%, down from 4.5% in 2021, but the company’s improved profitability – including the job cuts announced last month – should help it reach the top of its 3-6% margin target by 2025 and double-digit long-term margins, said co-CEO Robert Gentz.

By 2023, Zalando expects an adjusted EBIT of between €280m and €350m, with revenue down 1% to 4%.

The company’s shares were up 2.7% at 0801 GMT.

(1 dollar = 0.9358 euro)

(Reporting by Hakan Ersan; Writing: Miranda Murray; Editing by Friederike Heine and David Goodman, Editing in Spanish by José Muñoz in the Gdansk newsroom)