Zalando SE Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Monique Pollard - Citi - Analyst : I had three, if I can. The first one is just whether you could please give us an update on the current trading and whether that strong momentum that you mentioned towards the end of the quarter has been maintained. The second question I had was whether you could please give us a sense of how much of the gross margin increase, that 90 basis points, that you

Question: Anne Critchlow - Berenberg - Analyst : I know you no longer split out DACH and rest of Europe in the segmental reporting, but I'm just wondering if you could comment on what you're seeing in the trend in profitability for the rest of Europe and what your expectations are there? And then I've got a second question on the AR. I saw that small acquisition. Just wondering what you'll be working on there and how it might support, for example, virtual fitting rooms and so on.

Question: Mia Strauss - BNP Paribas - Analyst : Maybe just one. I know you spoke briefly about the tariff impact, not so many changes. But are you seeing anything from SHEIN and Temu dumping into the EU? Or what are your thoughts on that? And then the second question is, Zalando has been delivering quite a bit of growth over the last 18 months or so. What market share do you have now of the online apparel market? And how has that changed versus a year ago? And then maybe just lastly on marketing and fulfillment costs, marketing costs have increased quite a bit this quarter and fulfillment was flat. How should we think about this for the rest of the year in terms of modeling?

Question: Sarah Roberts - Barclays - Analyst : Just three for me, if that's okay. So firstly, can you give some clarification on the point you just made around current trading? I think you mentioned that you're expecting mid-single-digit growth rates in Q2. So does that mean we should think about a slight slowdown versus what we've seen in Q1 at 6.5% growth rate? And I guess in terms of April, it seems as if it's fair to assume that it decelerated month-on-month of the back of a strong March, but how should we think about the growth rate of April trading in terms of versus Q1? And then secondly, on ZMS, can you quantify what you're seeing in terms of ZMS versus Q4, where you -- I think, you called out, it had returned to double-digit growth? And can you highlight what your expectations are for the full year? And then thirdly, just again, on the SHEIN and Temu point, I think we've seen some news reports over the past couple of weeks that Chinese players started to increase their digital ad spend in Europe in light of the recent de minimis changes. Have you seen anything in terms of higher performance marketing costs or higher cost per clicks at the back of this over recent weeks?

Question: Luke Holbrook - Morgan Stanley - Analyst : My first question is just on the inventories, which rose relatively significant in the quarter. And I appreciate there was a weak comp. Can you just comment a little bit more on how that's faring through the quarter? Are you seeing a typical sell-through or off price? Just any comments in that regard would just be helpful. And then my second question is more conceptually, but social commerce has become a big vector in parts of Asia. And I'm just thinking that with your fulfillment for some of the brands on TikTok Shop, do you see it as just an alternative way to generate fees from a separate avenue? Or is there any risk here of cannibalization of your core platform? That's just more of a conceptual one.

Question: Yashraj Rajani - UBS - Analyst : I've got three follow-ups, please. The first one is on the market share point. I appreciate you mentioned that you look at market share for an overall European apparel and footwear market. But just to dig a little bit more into the online space specifically, right, are you saying that your recent performance is basically just because of the strength in online? Or do you think that you are taking share or exceeding growth of certain online competitors specifically as well? And can you give us some color there? The second one is on Germany and France. So there was a beauty retailer that called out an alarming level of weakness in Germany and France consumer sentiment. Can you give us some idea of what you're seeing there? Is there any particular category where you are seeing weakness or strength? I think that would be helpful. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 7:30AM, ZALG.DE - Q1 2025 Zalando SE Earnings Call And the third one is on inventory. So I appreciate you mentioned that there's some speculation around Chinese e-commerce players, but more specifically, in terms of what you are seeing with your partners, are you seeing some of your partners, specifically sportswear names pushing more inventory to you, in which case do you think that there may be a potential overstocking situation going into the second half?

Question: Richard Chamberlain - RBC - Analyst : A couple from me, please. Just first of all, back to the loyalty program. It sounds like that's leading to some good metric so far in terms of order frequency, share of wallet and so on. And based on the first markets, you've got data for like Spain, Austria and France. I just wondered if you expect that pattern to be representative for the whole group, whether that pattern you expect to continue for other markets and whether you're seeing that consistently across different markets so far? And then on to ABOUT YOU, I wondered if once assuming that, that completes this summer and you get the required regulatory approval, will you then be looking to update on the guidance and the synergy expectations and so on once that deal has completed? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 7:30AM, ZALG.DE - Q1 2025 Zalando SE Earnings Call

Question: Georgina Johanan - JP Morgan - Analyst : I've got three, please. The first one, sorry if I missed it, but I just wanted to understand, in the B2C GMV growth, is it fair to say that the growth from partners and the wholesale growth is tracking broadly in line with each other at the moment? Or are we seeing actually an outperformance of wholesale at the moment, please? That was my first one. Second one was just given the progress in gross margin seen in the first quarter, and it sounds like whilst there's a mix effect in there it's underlying drivers, should we expect similar growth to come through in the second quarter as well? Would that be a sensible modeling assumption? And then finally, just on the ZEOS partnership with NEXT, if you could just provide us an update on where that's at in terms of warehouse transition and if you have the full range of stock sitting in your warehouses already and so on? That would be really helpful.