UPDATE ZALANDO

STRUCTURAL WINNER: +27%

Great set of Q2 numbers. Although expected from the pre release where they upgraded guidance based on inline sales and improving profitability.

The operating profit margin widened to 8.4 percent. Sales rose 25 percent to 916.4 million euros, in line with Zalando’s preliminary estimate.

They also reiterated their forecast for full-year sales growth at the upper end of a 20-25 percent range. This despite a tough Q2 in Europe for retail with weather related issues. Very positive.

So we continue to expect strong top line growth and improving margins, as operating leverage improved the Ebit margin. (how the margins where achieved has been a concern for investors since the Q2 pre release). Therefore we expect a higher margin going forward.

We are happy to stick with our Long as continue to think and see evidence that ZAL is a structural winner as consumption decisions shift away from the high street to online.

Looking for a raised PT of 40 EUR.

 

UPDATE ZALANDO
ASOS X-READ

Tuesday • 12 July 2016 • 09:07

Great set of numbers from ASOS this morning as they reported a 30% rise in total sales for the four months to 30 June and said it expects full-year sales growth to be at the upper end of the 20-25% range.

Sales in the UK were up 28%, while sales in the US rose 53% and EU sales advanced 32%.

ASOS beat expectations despite a challenging environment across the sector.

For us this is a positive cross read to our favoured play in the sector Zalando. We continue to think that ZAL is a structural winner as consumption decisions shift away from the high street to online.

Patience will be needed into Q2s but we would be happy to add or initiate a position here.

Currently -7%. Stay Long or ADD and keep the faith!

 

ZALANDO: BUY
BUY INTO THE UNSTOPPABLE CONSUMER SHIFT TO ONLINE

Tuesday • 19 January 2016 • 08:56

Poor communication meant we wanted to see the print before getting involved. But FY revs +33.5% – 33.8% is inline with the guide of 33-35%, though maybe a touch light of cons, but adj ebit of 96-114m is a beat vs cons 92m vs a tough comp.

We continue to think that ZAL is a structural winner as consumption decisions shift away from the high street to online. The 20% pullback YTD provides a good entry point. BUY