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Online retailer Zalando crashes after lowering forecasts because of the deteriorating economy

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Zalando SE’s shares fell the most in more than three years after Europe’s largest online retailer cut its earnings forecast, blaming worse-than-expected macroeconomic conditions.

The stock fell as much as 17 percent in early German trading. It’s down about 70 percent this year.

The retailer announced late Thursday that it was posting adjusted earnings of between 180 million and 260 million for the year. The second quarter, while still profitable, was weaker than expected, Zalando said.

While sales for online retailers boomed during lockdown as people were forced to shop online, that growth has since cooled as normal shopping behavior returns. Record inflation in the eurozone is also weighing on consumer confidence.

“After some promising signs of improvement in consumer demand between late April and May, things appear to have deteriorated significantly in June,” said Guido Lucarelli, an analyst at Citigroup, adding that he doesn’t see much hope for a recovery in the second month half, “and possibly not in the first half of 2023 either.”

Asos Plc and Boohoo Group Plc, two of the UK’s largest e-commerce chains, also reported falling sales last week in a new sign of consumer distress. Asos lowered its profit and sales guidance, while Boohoo saw its first sales decline in its history in the UK as shoppers bought less online and returned more goods.

Zalando is expanding aggressively. Last year, when online sales were booming, a plan was put in place to capture a tenth of Europe’s fashion market, which is valued at €450 billion in the long term.

https://www.independent.ie/business/world/online-retailer-zalando-plunges-after-cutting-guidance-on-worsening-economy-41785313.html Online retailer Zalando crashes after lowering forecasts because of the deteriorating economy

Fry Electronics Team

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