Zalando SE was close to break even on its first-quarter adjusted earnings, beating analyst estimates, as the German online fashion retailer’s focus on profitability has boosted its performance.

The Berlin-based e-commerce platform reported an adjusted loss before interest and taxes of €700,000 ($776,000) for the period, Zalando said in a statement Thursday. That compares with an average estimated loss of €17.8 million by analysts surveyed by Bloomberg.

Zalando attributed the performance to its offprice segment and better order economics due to bigger basket sizes as customer spending remains resilient.

The company, which sells a mix of its own-brand and third-party apparel, has been taking steps to improve its margins as consumers return to brick-and-mortar shopping after a pandemic-era shift to online shopping. Zalando announced job cuts last quarter as part of its push to cut costs.

“As overall demand remains muted, we continue our focus on driving sustainable efficiencies in fulfilment and marketing,” said Zalando chief financial officer Sandra Dembeck in the statement.

Revenue for the period was €2.26 billion, up 2.3 percent from a year earlier and in line with estimates. Zalando confirmed its full-year guidance for 2023, with its adjusted earnings seen between €280 million and €350 million.

By Agatha Cantrill

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