Germany’s Zalando SE continues its winning streak, without entering new categories or markets.

Europe’s biggest online fashion retailer Thursday raised its outlook for 2015 for the second time in three months, and reported a 34% surge in revenue. Its active customer base increased by one million in the three months ended June 30, and the company continues to be profitable.

“It’s just an extremely cool situation,” Boris Radke, head of communications at Zalando said in an interview. “It looks like we’re in a sweet spot, we’ve done this without adding new categories, and without entering any new markets.”

Berlin-based Zalando started up as an online shoe retailer in 2008 and has since expanded its offerings to clothing, accessories, beauty products and sportswear. It also runs a members-only club called Zalando Lounge where consumers get exclusive access to offers, and two brick-and-mortar outlet locations in German cities Berlin and Frankfurt, where it unloads older items and excess inventory.

In comparison to other online retailers like Amazon, Zalando has remained focused on its core market: Europe. In the second quarter, its revenue in the DACH (Germany, Austria, Switzerland) and Rest of Europe segments grew 28% and 38%, respectively.

Analysts have earlier criticized Zalando for not being profitable despite continuous earnings growth. The company, which listed on the Frankfurt stock exchange in October last year, said Thursday that despite reporting black numbers for the past quarters, it would continue to prioritize continued growth over profitability.

“It’s not like we’re planning to make any losses,” Mr. Radke said. However, he added, a fast growing company like Zalando has to accept the risk of losing a small margin percentage sometimes. “But why should we be worried about a 2% margin loss if we grow 30%?”

Bernadette Kissane, an apparel and footwear analyst at Euromonitor, said further growth lies ahead of Zalando. The company, she said, still has untapped potential in product offerings and should be able to increase its presence in markets such as the U.K. and France. Combined with additional branding efforts and the Zalando Lounge loyalty scheme, she added, this will “ensure that the retailer is well equipped to maintain its number one positioning.”

According to data provided by Euromonitor, Zalando currently holds the number six spot in the global online footwear and apparel market, still far from market leader Alibaba Group Holding Ltd and Amazon.com Inc., which is number two.

This Wednesday, China’s Alibaba reported its slowest revenue growth in more than three years, alarming investors.

Amazon reported a narrow profit last month, causing shares of the Seattle retailer to surge by more than 17% in after-hours trading. The online giant has been slightly profitable in eight of the past 14 quarters. Investors are however still wary of red numbers, expressing concerns about whether Amazon will be able to create consistent profits in the future.

Mr. Radke said Zalando—which reported a second-quarter revenue of €733 million ($818 million)—is still “tiny” in a European context.

In the first half of 2015, Zalando added 1500 employees, and Mr. Radke said it is approaching a total 10,000 employees by the end of the year. In the course of two years, he said the company plans to hire 2,000 developers to expand its range of apps. Close to 60% of Zalando’s traffic now comes from mobile.

The company also said on Thursday that it plans to expand its logistics capacity by improving its automation processes and opening a third large warehouse facility in Germany and its first satellite warehouse in another European country.

After all, the most important key to success for Zalando, Mr. Radke said, is that it continues to invest and grow.

“We know we can become much, much bigger,” Mr. Radke said. “We just need to continue to make the right decisions.”

Ms. Kissane, the analyst, said that while focus on growth instead of profit might make sense for an expanding retailer, profit has to take center stage at Zalando too, “perhaps sooner rather than later.”