Germany's Zalando says second quarter EBIT margin slowed on payment costs

BERLIN (Reuters) - Europe's largest dedicated online fashion retailer Zalando (ZALG.DE) said profitability slowed in the second quarter because of a "temporary rise" in payment costs.

The operating margin eased to a 3-5 percent range from 6.4 percent a year earlier, equivalent to earnings before interest and tax (EBIT) of between 22 million euros ($23.83 million) and 37 million euros, the company said in preliminary results published early on Tuesday.

Last year, Zalando posted EBIT of 35 million euros.

"Operating business led to significant profitability, although the EBIT margin was impaired by a temporary rise in payment costs," Berlin-based Zalando said, without being more specific.

Sales in the April-June period jumped 33-35 percent to between 727 million euros and 738 million euros, compared with 546 million in 2014, Zalando said.

The company said it expects the first-half EBIT margin to rise by about 4 percent to between 51 million euros and 66 million euros.

Final quarterly results will be released as planned on Aug. 13, together with a possible adjustment of full-year forecasts, Zalando said.

Earlier this month, British rival ASOS forecast full-year sales at the higher end of its 15-20 percent growth range and a pretax profit of 47 million pounds, up from 45 million previously.

Zalando shares listed in Frankfurt last October at 21.50 euros and have risen almost a third this year, outperforming the European retail index (.SXQP).

The firm, which now ships 1,500 brands to customers in 15 countries, has said it expects to increase its staff to about 10,000 by the end of 2015 from around 8,000 now, hiring particularly in the tech and logistics field.

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(Reporting by Andreas Cremer and Kirsti Knolle; Editing by Ken Wills)