October 31, 2019 / 7:20 AM / 22 days ago

UPDATE 1-Retailer Zalando marks strongest quarterly sales growth in 2 years

* Q3 sales up 26.7% to 1.521 bln euros vs consensus for 1.50 bln

* Q3 adj. EBIT 6.3 mln vs consensus for loss of 11.23 mln

* 2019 outlook confirmed

* Shares seen up 3% (Adds details, background)

BERLIN, Oct 31 (Reuters) - Online fashion retailer Zalando on Thursday reported its strongest quarterly sales growth in two years and more than 1 billion visits to its portal, helped by a new loyalty scheme in Germany and rapid expansion in Spain, the Nordics and the Czech Republic.

Third-quarter adjusted earnings before interest and tax (EBIT) came in at 6.3 million euros ($7.03 million), from a loss of 38.9 million a year ago. The company's third-quarter sales surged 26.7% to 1.521 billion euros, ahead of average analysts' expectations of 1.50 billion euros.

Zalando shares were up 3.1% in pre-market trade.

Sales rose nearly 23% in Germany, Austria and Switzerland region and 30.8% in its other European markets.

Zalando said customers of its new "Plus" loyalty scheme in Germany were already accounting for 10% of gross merchandise value - sales made on its website by itself or its partners - after only two quarters.

Zalando, Europe's biggest online-only fashion retailer, has seen its profitability squeezed by heavy investment in faster delivery as Amazon ramps up its fashion offering.

However, it has predicted a longer-term recovery in margins as it becomes more of a platform for brands rather than buying and selling stock itself. In the third quarter, the retailer said it had seen strong adoption of its logistics and advertising services.

Zalando confirmed its outlook for adjusted EBIT to the "upper half" of the range of between 175 million euros and 225 million euros and for revenue growth around the lower end of 20%-25%.

($1 = 0.8961 euros)

Reporting by Emma Thomasson; Editing by Thomas Seythal and Sherry Jacob-Phillips

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