Zalando Raises Full-Year Forecast After Third-Quarter Profit

BERLIN, Germany — Online apparel retailer Zalando SE raised its full-year forecast after it made an unexpected profit before interest and tax in the third quarter.

Zalando said the operating margin should be 5 percent to 6 percent in 2016 in a statement released late Tuesday, compared with a previous range of 4 percent to 5.5 percent. Earnings before interest and tax were €8 million ($8.8 million) to €25 million in the third quarter, while analysts expected a loss of €12 million.

“In the third quarter we outperformed a sluggish fashion market and improved our profitability significantly, allowing us to increase our guidance,” co-chief executive officer Rubin Ritter said in the statement.

Zalando, which sells fashions from Adidas retro-'90s Gazelle trainers to $800 a-line skirts from Zac Posen, has been benefiting from consumers favouring its site and mobile app and adding fashion categories that resonate with consumers, said Charles Allen, an analyst at Bloomberg Intelligence.

Third-quarter sales rose 16 percent to 18 percent, Zalando said. The company plans to report full third-quarter results on Nov. 10.

By Aaron Ricadela; editors Matthew Boyle and Thomas Mulier.