Shares in Zalando plunged almost a fifth on Friday before staging a late recovery after Europe’s largest online fashion retailer slashed its outlook for the year as consumers retrench amid deepening recession fears. This followed a much weaker second quarter than expected, an abrupt reversal from just four months ago when Zalando forecast growth of 12 to 19 per cent. In a bleak warning issued after markets closed on Thursday, Zalando said that “management now expects macroeconomic challenges to be longer-lasting and more intense than previously anticipated”.
European retail stocks fell on Friday to their lowest level since the onset of the COVID-19 pandemic in 2020, hit by a profit warning from online fashion retailer Zalando and data showing consumer confidence in Britain has hit a record low. The STOXX 600 retail sector, poised for its fourth consecutive week of declines, hit its lowest level since March 2020. Shares of German retailer Zalando plunged to a December 2018 low after the company on Thursday warned of weaker second quarter and cut 2022 outlook on deteriorating macro conditions.