Frankfurt (Reuters) - The weakening economy continues to cause About You problems.

On Tuesday, the online fashion retailer announced an increase in sales of 8.3 percent to 554.9 million euros for the past quarter. In the first two quarters of the 2022/2023 financial year, however, the increase was 19.4 and 8.9 percent respectively. At the same time, the adjusted operating loss increased to 43.1 million euros from 30.5 million euros in the same period of the previous year.

"Our customers are buying more from us compared to the previous year, but the products are currently more heavily discounted because the entire market is sitting on too much stock," said Tarek Müller, co-founder and co-CEO of About You. According to the figures, the number of active customers and orders grew by 17.4 percent to 12.5 million and 23.8 million to 38.2 million respectively. At the same time, the average shopping cart shrank by six percent to 55.30 euros.

"The major challenges for the fashion industry in recent months have been the weak consumer mood with the weather-related lower demand for winter clothing," added Müller. The mild October put a spanner in the works for many retailers.

The Scayle division recorded above-average growth. It sells the company's own store software to other companies such as the optician chain Fielmann or the soccer club FC Bayern Munich. Tarek expects this trend to continue. On the one hand, this is due to the growth in corporate customers and, on the other, to an expected recovery in revenue sharing for the use of the technology. "We also want to spin off Scayle into a separate legal entity in the coming years, which can then be taken into account with its own valuation. However, there is no concrete timetable yet."

About You lowered its expectations for the full-year targets, which were cut in September, due to the sluggish economy. Turnover is expected to be at the lower end of the now targeted range of 1.905 to 2.078 billion euros. The same applies to the operating loss, which the company is forecasting at minus 140 to 120 million euros.

"We are confident that we will reach the adjusted operating break-even point in the 2023/2024 financial year as expected," said Müller. The cost-cutting measures that have been introduced are already making themselves felt in the balance sheet, but have not yet had their full effect." A major factor here is the decision to forego cost-intensive marketing campaigns to enter new markets in the coming year.

Analyst Henrik Paganetty from the investment bank Jefferies praised About You's quarterly results as solid. He was encouraged by the confirmed full-year targets and the timetable for reaching the break-even point. Nevertheless, the share price slumped by up to 14 percent, the most since the IPO in mid-2021.

(Report by Hakan Ersen. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)