(new: statements of the management from the conference call)

BERLIN (dpa-AFX) - Despite sluggish business, online fashion retailer Zalando earned more operationally than expected in the past quarter thanks to strict cost control. The group's management took this as an opportunity to specify its annual targets. The operating profit should develop a bit better than previously expected. The current third quarter is showing positive trends, said CFO Sandra Dembeck at an analysts' conference on Thursday. While it is still very early, she said, "July was a better month for us than the second quarter." The executive hopes for a better second half of the year.

Investors reacted in high spirits. Whereas the Zalando share had still risen slightly shortly after the start of trading, it climbed significantly after the statements by the management team. Most recently, the shares were trading 8.5 percent higher, leading the few winners in the weak Dax.

Co-CEO Robert Genzt also confirmed the medium-term targets. "Our goal is to return to double-digit growth rates," he told the conference. "The e-commerce rally will come again in the future." The manager left open whether this is likely to be the case next year or later.

As the DAX-listed group announced in Berlin, adjusted earnings before interest and taxes (Ebit) almost doubled in the second quarter compared with the same period last year to just under 145 million euros. "In a temporarily challenging environment in the retail sector, we want to sustainably increase efficiency in the areas of logistics and marketing," said CFO Dembeck.

For example, costs per order were reportedly down recently. Customers were adding more clothing and accessories to their digital shopping carts, which led to lower spending on logistics. In addition, "targeted marketing measures" had played their part. On balance, Zalando earned 56.6 million euros in the second quarter, down from 14 million a year earlier.

According to JPMorgan analyst Georgina Johanan, some investors may have hoped for slightly more optimistic statements on earnings performance for the year. However, Zalando's management may have left itself some wiggle room in the outlook for rising advertising spending in the second half of the year, the expert wrote in an initial commentary. In it, she also criticized the customer outflow in the second quarter.

Because in terms of sales, it went rather lukewarm for Zalando. Thus, the lot of the three months to the end of June fell by 2.5 percent to just under 2.6 billion euros. At present, companies are having to contend with the slump in consumption caused by inflation. People are paying particular attention to what they can afford.

Although customers' money is anything but loose, Zalando responded with new partnerships. For example, it said it has expanded its sports division with well-known names such as Lululemon and Hoka, while it has expanded its relationships with cosmetics manufacturers such as Lancome and Shiseido. Zalando intends to continue focusing on premium brands, co-group CEO Robert Gentz made clear in a conference call.

For the current year, the group's management is now somewhat more optimistic about operating profit development, although it is becoming more cautious about sales. Adjusted earnings before interest and taxes (Ebit) are now expected to reach 300 to 350 million euros in 2023, compared with 280 million euros at the lower end of the range previously. Operating profit would thus be significantly higher than in 2022, but still below the level of two years ago.

As a result of the ongoing consumer slump, management expects to achieve only the lower half of the targeted growth in gross merchandise volume (GMV) of 1 to 7 percent. Sales are expected to be either almost stagnant or even slightly down on the previous year./ngu/tav/jha/