German fashion etailer Zalando has said it will report a fall in profits for the second quarter of the year, depite sales surging.
The Berlin-based retailer, which sells across 15 European markets including France, Spain and the UK, said earnings before interest and taxes will be between €22m and €37m (£15 to £26m) for the second quarter, down from €35m (£25m) in the same period last year.
In its preliminary results Zalando said sales soared between 33% and 35% to €727m and €738m (£510m to £517m) during the period. That compared with €546m (£383m) in the same period a year ago.
Zalando said sales growth shot up above expectations, helped by investments into its “long-term customer proposition across markets”.
However, it added: “At the same time, operating performance led to clear profitability, albeit EBIT margin was impacted by a temporary increase in payment cost.” The costs related to extending its credit payments system to consumers across countries including Germany, Austria and Switzerland.
Rubin Ritter, member of the management board, said: “With these figures, Zalando continues to deliver a unique combination of growth at scale and profitability. Re-accelerating our growth close to 35% is an extraordinary achievement of our team.”
Zalando, which recently acquired Berlin tradeshow Bread & Butter, is expected to publish its second-quarter results on August 13.