Zalando shares drop 15% amid earnings warning

• Shares in Zalando plunged 15% on Friday to lowest level in eight years.
• Europe’s largest online fashion retailer lowered its profit projection for the whole year.
• German-based retailer issued its second profit warning in as many months on Thursday evening.
• The company’s sales increased by 30% in 2021 because of the pandemic-driven surge in internet buying.
Advertisement

Zalando shares plunged 15% on Friday to their lowest level in eight years, after Europe’s largest online fashion retailer lowered its profit projection for the whole year.

The Berlin-based retailer with annual revenue of €10 billion issued its second profit warning in as many months on Thursday evening. It stated that its full-year operational profit, adjusted for one-time events, is likely to be roughly half of what was predicted one month ago.

Read More: Jay Powell tries to calm recession fears but warns about inflation

Since its debut on the Frankfurt stock exchange in 2014, the company has experienced 25 percent yearly growth and a 4.5 percent operating profit margin. The company’s sales increased by 30% in 2021 because of the pandemic-driven surge in internet buying.

On Thursday evening, Zalando said that a worse-than-anticipated performance in the second quarter dashed its previous aspirations for a turnaround.

Read More: Fuel prices boost Canadian inflation to 7.7%

“Management now expects macroeconomic challenges to be longer-lasting and more intense than previously anticipated,” it said, adding that it “no longer assumes a rebound of consumer confidence in the short-term.”