Shares up more than 8
Q2 operating profit rebounds from Q1 loss
Sales down 4 to 2.6 bln euros

BERLIN, Aug 4 Reuters Zalando shares jumped on Thursday as Europe39;s biggest online fashion retailer returned to profit in the second quarter thanks to cost cuts, though another drop in sales showed the effects of squeezed consumer budgets.

After riding a surge in online shopping during the pandemic, Zalando shocked investors in May by reporting its first ever sales decline.

The German company made adjusted earnings before interest and tax EBIT of 77.4 million euros 78.9 million in the second quarter, down 58 yearonyear but up from a firstquarter loss of 52 million euros.

Its gross merchandise volume was flat yearonyear at 3.8 billion euros 3.9 billion, but the company predicted a better second half of the year.

Our foundation is very strong. We expect a return to growth and profitability, coCEO Robert Gentz said.

Zalando shares were up 8.1 at 0945 GMT.

Secondquarter sales fell 4 to 2.6 billion euros, however, with the company blaming lower consumer confidence, inflation and delivery bottleneck for individual products such as shoes.

Life is becoming more expensive and consumers are reluctant to consume. We feel that, Gentz said.

Even with inflation, customers39; basket size dropped to a 12month average of 55.9 euros in the second quarter from 57.7 a year earlier.

The company said demand was still high for luxury and cheap clothes, but had weakened for midprice…