Zalando is an online fashion retailer. Founded in 2008, the company has grown to be Europe’s largest online fashion platform, serving customers in 17 countries and generating sales of €6.5 billion in 2019. The company is listed on the XETRA and currently has a market capitalisation of €13.4 billion.
Zalando shares fell sharply when equity markets tanked earlier in the year. After trading near €50 in mid-February, the stock fell to €27 in March. However, since then, ZAL has staged a phenomenal rebound to €53 on the back of several encouraging trading updates. In mid-April, the company said it was “optimistic” for the second quarter after sales picked up in April following a decline in March. Then, on 7 May, the company advised that it expects full-year sales growth of 10%-20% and a return to profitability following an initial hit from coronavirus lockdowns.
Source: 2iQ Research
What looks interesting here is that on 8 May, Chairman of the Supervisory Board, Cristina Stenbeck, purchased 38,000 shares, spending nearly €2 million on stock. We see this insider purchase as a bullish signal. The last time Stenbeck purchased shares was on 16 January, shortly before the company announced excellent results for 2019 (which included a very strong performance in Q4). That purchase was worth €466,200. This recent purchase was worth over four times that amount. Given the size of this insider purchase, we think the outlook for Zalando is favourable.