Frankfurt (Reuters) - Zalando is focusing on strengthening its earning power due to consumers' continued reluctance to spend.

Despite falling sales, the online fashion retailer announced on Thursday that it had almost doubled its operating profit. It also slightly raised the lower end of its profit margin target for the year as a whole.

Thanks to cost-saving measures and an increase in the average order volume, the adjusted operating profit rose by 87 percent to 144.8 million euros. This was significantly more than expected, praised one stock market analyst. The Zalando forecast that operating profit in 2023 will be 300 to 350 million euros instead of 280 to 350 million euros is also encouraging investors to get on board. The share price rose by four percent in early trading in Frankfurt, putting it at the top of the DAX.

Because consumers are tightening their belts due to higher inflation and the weakening economy, Zalando's consolidated sales reportedly shrank by 2.5 percent and the gross merchandise volume (GMV) sold via the platform by 1.8 percent. As a result, growth in sales and GMV for the year as a whole will probably remain at the lower end of the targeted ranges. The company had originally forecast figures of minus one to plus four percent and plus one to plus seven percent respectively.

"Zalando is not immune to the weakness in consumption," said one analyst. However, the company is holding up better than the fashion industry as a whole. As it is now focusing on improving its earning power, above-average profit growth can be expected when the business recovers.

(Report by Hakan Ersen; edited by Sabine Wollrab. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).