October 19, 2016 / 5:56 AM / a year ago

Zalando lifts earnings forecast, Q3 growth disappoints

BERLIN, Oct 19 (Reuters) - Zalando, Europe’s biggest pure online fashion retailer, reported a slowdown in sales growth in the third quarter, but said it had improved profitability, allowing it to lift its guidance for 2016 for a second time.

In a statement issued late on Tuesday night ahead of a scheduled trading update on Wednesday, Zalando said sales rose 16-18 percent, slowing from 25 percent in the second quarter as the fashion industry suffered from unseasonably warm weather.

Zalando, which reports full third-quarter figures on Nov. 10, said it expects an adjusted earnings before interest and taxation (EBIT) margin of 1.0-3.0 percent, allowing it to lift its full-year guidance to 5.0-6.0 percent from 4.0-5.5 percent.

It reiterated that it expects sales growth for 2016 to come in at the upper end of a 20 to 25 percent range.

“This trading statement suggests that Zalando continues to outperform the market,” said Bernstein analyst Jamie Merriman, adding that the new guidance would suggest about a 12 percent increase in consensus full-year earnings forecasts.

Reporting by Emma Thomasson; Editing by Tina Bellon

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