German fashion webshop About You has achieved profitability faster than expected. The Zalando challenger saw its sales grow slightly, while it cut vigorously in marketing and other costs.
Little revenue movement
Despite the market environment that “remains challenging”, co-CEO Tarek Müller is happy to announce that the e-commerce company finally turned a profit in the first quarter of this year. Operating profit clocked in at 4.2 million euros, up from 28.8 million euros below zero a year earlier and significantly better than average analyst forecasts at – 16 million euros.
In line with expectations, revenue grow ever so slightly (+ 0.6 %) to 507.1 million euros. About You cited a strong comparison base, continued high stock levels and weakened consumer sentiment due to the fresh spring as culprits. Consumer confidence is said to have improved during the quarter, though.
Marketing costs halved
The fashion platform worked mainly on the cost side of the balance sheet: it halved its marketing expenses, while administrative costs fell by 15.1 %. Müller points to “strategic and operational measures”, which allowed the company to optimise inventories, logistics and marketing and personnel planning.
For the full year, About You continues to forecast a break-even result, while sales should grow between 1 and 11 %. Müller concludes that “we have laid the foundations for profitable long-term growth of our group in the past quarter”.
