German online fashion giant Zalando posted a loss in Q3 as its sales were hit by the prolonged heatwave across Europe, with CEO Rubin Ritter declaring he was “clearly not happy” with the performance.
In the three-month period the business achieved 11.7% revenue growth to €1.2bn and an adjusted EBIT of -€38.9m, corresponding to a margin of -3.2%.
The business said that it had continued to make progress with its platform strategy during the quarter making further headway with both brands and customers.
“The Partner Program continued to grow above expectations, with improved tools cutting the time to onboard new articles in half and resulting in Partner Program growth exceeding 60% in the third quarter, as new partners joined and existing partners internationalized to additional markets,” it said in a statement.
In terms of customers it reached a new record of active customers with 25.1m, which represents about 6% of the European population Order volume grew by 22.8% to 27.7m.
However the lower-than-expected growth in the quarter was mainly down to the prolonged heatwave which slowed sales and prolonged the switch to AW season.
Ritter said: “We are clearly not happy with our financial results in the third quarter. Our eyes are set on building the ecosystem for European fashion at full speed and our 2020 target of doubling the business to €10bn in gross merchandise volume. For the fourth quarter, the team’s full focus is now on pulling off a strong finish to the year.”
Zalando set expectations that it would achieve fourth quarter growth of between 20% and 25%.