Zalando SE Q2 2020 Earnings Call Transcript

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

Question: Michelle Wilson - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : First one, just on gross margins. Could you quantify the volume rebates from Partner Program that are going to the top line? I mean just give us some explanation of how that's developed year-on-year. And then just on the lower return rate point, just to confirm, there hasn't been any reversal of any provisions that might have flattered GMV growth in the quarter. Could you just explain the kind of accounting treatment around the return rate? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 11, 2020 / 7:30AM, ZALG.DE - Q2 2020 Zalando SE Earnings Call

Question: Michelle Wilson - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Sorry, just -- I guess just the reversal of provision, I just wanted the quantification of the boost -- of half year GMV growth?

Question: Rocco Strauss - Arete Research Services LLP - Analyst : David, 2 actually left for me. I believe you're actively hiring tech talent for zDirect right now. But could you touch a bit more on how zDirect will help scaling Zalando Media Services meaningfully from here with zDirect, obviously, enabling the marketing departments of brands to utilize the data analytics through the newer tools? And secondly, could you touch on the development of items per basket especially driven by MOVs and the increasing share of Zalando Fulfillment Services.

Question: Olivia Townsend - UBS Investment Bank, Research Division - Analyst : I have 2 questions. One is a follow-up on the gross margin. I was just wondering if you could quantify any of the different parts of the H1 gross margin bridge, the split between promotion, mix and product, mix and countries, et cetera? Or at least any kind of qualitative comments you can make about what was the largest driver and what was the split between those different parts? And then the second question is just on average ZFS penetration during the quarter. Would we be correct in thinking that was around sort of low 40% with that peak of 50% at some point near the end of the quarter? And you mentioned in the presentation, you were saying about 80% of the existing partner brands that were internationalizing using ZFS, have you seen a similar level of demand for ZFS from those 180 partners that joined in Q2? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 11, 2020 / 7:30AM, ZALG.DE - Q2 2020 Zalando SE Earnings Call

Question: Jurgen Kolb - Kepler Cheuvreux, Research Division - Analyst : 2 questions. First, on the current situation in terms of excess inventories. Obviously, Lounge was very strong. So how do you see the current situation developing in the second half? What are you hearing from the brands and your ability to keep that growth also going into the second half? And here, specifically on Q4, when we talk about Black Friday, Cyber Week, how do you see these sale events developing this year? And in this respect also, you mentioned as a kind of a risk that the fall/winter products might not be -- or that the brands are cutting back on collection side. How does that affect your business? How do you think that's going to affect your business? Is that going to have a positive impact on pricing? Or how do you see that as a real risk and impacting your numbers?

Question: Georgina Sarah Johanan - JPMorgan Chase & Co, Research Division - Analyst : 2 for me, please. And the first one was just a clarification. You talked about a double-digit million benefit from lower returns rate on EBIT. Just to check, is that double-digit millions benefit sort of purely coming from the lower associated fulfillment costs? Or is that taking everything into account, for example, also a lower gross margin on that type of product mix? That was the first one. And the second one was just following up on Geoff's, I think, question earlier. You talk about sort of doubling down in terms of investment and really going on the offensive. And -- are there any particular markets where you're going to be sort of more aggressive going forward? And indeed, perhaps the U.K., any comments on whether the U.K. is going to be one of those, please?