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Zalando to focus on profitability after 2022 slump

FILE PHOTO: The logo of fashion retailer Zalando is pictured at the new headquarters in Berlin

BERLIN (Reuters) -Zalando, Europe's biggest online fashion retailer, will focus on improving profitability this year after a profit slump and stagnating sales last year.

The company's adjusted group earnings before interest and tax (EBIT) plunged by 60.1% last year to 184.6 million euros ($197.3 million) on revenue down 0.1%, it said on Tuesday, in line with guidance updated in November.

The EBIT margin was 1.8%, compared with 4.5% in 2021, but the company's profitability push - including jobs cuts announced last month - is expected to help it to the top end of its 3-6%margin target by 2025 and double-digit margins in the long term, said co-CEO Robert Gentz.

For 2023, Zalando expects adjusted EBIT of between 280 million and 350 million euros, with revenue between a 1% decline and 4% gain.

Gross merchandise value (GMV) grew by 3% last year, to 14.8 billion euros, and Zalando now expects GMV growth of 1-7% this year.

Shares in the company were up 2.7% at 0801 GMT.

($1 = 0.9358 euros)

(Reporting by Hakan ErsanWriting by Miranda MurrayEditing by Friederike Heine and David Goodman)