In a tight spot

After reaching a record high of € 68.15 last autumn, Zooplus shares experienced a marked downward trend up to the end of January, falling below € 40. This was in spite of the company expecting 32 per cent growth in sales to € 256.2 mio in fiscal 2011. Analysts attribute this substantial slump in prices to the less satisfactory nine-monthly figures presented in November and to the increase in capital completed in January, according to the web portal of the well-known German TV programme Börse ARD. The financial portal Godmode-Trader.de is also less confident: “Looking at the technical analysis, Zooplus is currently in a pretty tight spot.” Financial journalists attest at any rate to the fact that the online company met its own expectations last year. It set its own forecast target at € 250 mio, and at € 256.2 mio Zooplus was well over this. Florian Seufert, finance director of Zooplus AG, is optimistic: “The major logistics migration project that has been completed and the successful capital increase will provide sustained support for us to grow further in the next few years.” Really? The company’s total sales in the final quarter of fiscal 2011 increased to around € 71.1 mio (Q3 2011: € 66.5 mio). Boerse. ard.de doesn’t find this particularly exciting compared with the increase of 6.9 per cent achieved in the previous quarter: “The growth dynamics have weakened considerably. In the first nine months of fiscal 2011, the company succeeded in increasing total sales by 36.8 per cent,” explains the Internet portal. “Falling margins” Boerse.ard.de has also been critical of the company’s profitability. Zooplus is actually assuming a loss of around € 5 mio for last year. Börse ARD‘s web portal cites possible reasons for this. One is the high cost of the logistics migration, which should actually lay the foundations for further growth. The portal also points to Zooplus’s falling margins, a consequence of the growing competition on the Internet. It is noticeable that the online retailer has been pursuing an increasingly aggressive pricing policy. This might bring an increase in sales, but the margin will fall further. Download: In a tight spot (PDF file)