April 16, 2015 / 5:57 AM / 4 years ago

Zalando swings to profit, cites strong season start

FRANKFURT, April 16 (Reuters) - German online fashion retailer Zalando swung to an operating profit in the first quarter, it said in preliminary figures released on Thursday, ahead of schedule.

Zalando said earnings before interest and tax (EBIT), adjusted to exclude stock-based compensation costs, would be between 25 and 39 million euros ($27 to $42 million), compared with a loss of 23 million euros a year earlier.

It said the increase was mainly driven by an improved gross margin on sales expected to rise to 635-648 million euros from 501 million a year earlier, corresponding to an increase of 27 to 29 percent.

“Both group revenues and adjusted EBIT have developed above expectations, mainly due to a very strong start into the spring/summer season,” Zalando said in a statement.

Shares in Zalando, Europe’s largest dedicated online fashion retailer, traded 4.4 percent higher at brokerage Lang & Schwarz ahead of the 0700 GMT Frankfurt market open.

Zalando had said in February it expected its 2015 adjusted EBIT margin to be roughly on the same level as 2014’s 3.7 percent. For the first quarter, the expected result corresponds to a margin of 4-7 percent.

Zalando also said in February that 2015 sales should rise by 20-25 percent.

The company will publish full financial figures for the first quarter on May 12. ($1 = 0.9362 euros) (Reporting by Georgina Prodhan; Editing by Muralikumar Anantharaman)

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