Zalando Jumps as Online Retailer Reports First Full-Year Profit

FRANKFURT, Germany — Zalando SE surged in Frankfurt trading after Europe's largest online fashion retailer reported its first annual profit helped by lower sales and marketing costs.

The stock, sold at 21.50 euros in an initial public offering last year, gained as much as 16 percent to 26.11 euros.

Zalando brought forward its results announcement from March 5 to the early hours of Thursday morning. Adjusted earnings before interest and taxes were 82 million euros ($93 million) in 2014, compared with a 109 million-euro loss a year earlier, according to the Berlin-based company.

“Our 2014 performance proves that Zalando’s business model is sustainable and can achieve significant margins,” management board member Rubin Ritter said in a statement.

Full-year revenue advanced 26 percent to 2.2 billion euros, while sales for the fourth quarter rose 21 percent to 666 million euros, beating the average analyst estimate of 661 million euros. Zalando anticipates revenue this year will grow as much as 25 percent, though margins are seen shrinking amid increased investments in technology.

“I believe Zalando is better positioned than ever to make these investments,” Ritter said on a conference call.

The adjusted Ebit margin was 3.7 percent in 2014, compared with minus 6.2 percent in the prior year.

By: Katarina Gustafsson and Corinne Gretler; editors: Celeste Perri and Paul Jarvis.