Zalando's profit boosted by sports, beauty, better inventories

:Online fashion marketplace Zalando exceeded analyst estimates for quarterly profit on Tuesday thanks to growth in its sports, beauty and designer categories and improved inventories, sending shares up as much as 7 per cent in morning trading.

Zalando has focused on higher-priced brands and sportswear as it competes with low-priced retailers such as Shein.

Gross merchandise volume - a key revenue metric for the total value of all goods sold - rose 2.8 per cent on the year to 3.8 billion euros ($4.15 billion) in the second quarter, while revenue grew 3.4 per cent.

That was driven by double-digit percentage growth in the sports category, CFO Sandra Dembeck said on a media call.

The group expects overall growth to keep accelerating in the second half of 2024.

Shares were up 2 per cent at 22.43 euros at 0834 GMT, after earlier surging as much as 7 per cent.

Zalando launched sports campaigns in major European cities in the quarter, featuring soccer stars like Robert Lewandowski and David Alaba, to capitalize on events such as the UEFA Euro 2024 soccer tournament and Olympic Games this summer.

Beyond a boost from the Euro Cup, the company saw a "very strong performance" in running wear, Dembeck said.

In recent quarters, Zalando launched sports brands such as Lululemon, Hoka, and On Running and introduced its own sports collection.

It reiterated that it expects gross merchandise volume and revenue to grow 0 per cent to 5 per cent this year, with adjusted earnings before interest and tax of between 380 million and 450 million euros.

Quarterly adjusted EBIT rose 18.5 per cent on the year to 171.6 million euros, beating expectations by 3 per cent, analysts noted, while active customers rose for the first time on a quarterly basis since