Farfetch posts revenue and GMV growth

Image: Farfetch For the second quarter, Farfetch Limited’s GMV increased by 12.6 million dollars from 1,007.8 million dollars, up 1.3 percent. Revenue increased by 56 million dollars to 579.3 million dollars, representing growth of 10.7 percent. The increase, the company said, was driven by a 60.3 percent increase in brand platform revenue to 116.6 million dollars, a 52 percent growth in in-store revenue and an increase in digital platform revenue of 0.7 percent. Commenting on the second quarter trading, José Neves, Farfetch founder, chairman and CEO, said: "At Farfetch our mission is to be the global platform for luxury. Since the acquisition of Browns, through the launch of F90 with Gucci, partnerships with Chanel and Harrods, our China JV with Alibaba, Richemont and Kering, and more recent signings of Neiman Marcus and Salvatore Ferragamo, to name just some of the milestones, we have built upon this vision relentlessly and this week we celebrate a landmark partnership where we are partnering with Richemont.” Review of Farfetch’s Q2 performance The company’s digital platform GMV decreased by 30.3 million dollars to 883.1 million dollars in the second quarter, representing a decline of 3.3 percent. The company added that digital platform GMV performance reflects continuing headwinds from suspension of trade in Russia, where trade has ceased since March 2022, and China, where regional Covid-19 restrictions continue to impact orders in Mainland China. Additionally, while the shift to full-price continued in the second quarter, this was more than offset by a decline in markdown sales. Brand platform GMV increased year-over-year by 47.3 percent to 107.1 million dollars or increased 68.4 percent excluding the impact of changes in foreign exchange rates. In-store GMV increased by 38.8 percent to 30.2 million dollars, driven by additional openings of New Guards brands' stores in the last twelve months as well as growth from existing stores. “In second quarter 2022 Farfetch demonstrated our ability to navigate macro challenges while delivering robust underlying growth and managing resources effectively. We achieved revenue growth, on a constant currency basis, of 21 percent year-on-year, and expanded gross profit margins with strong unit profitability,” added Elliot Jordan, CFO of Farfetch. Digital platform services revenue increased by 2 percent driven by first-party revenue. Digital Platform Services first-party revenue increased 8.7 percent primarily driven by increased markdown sales of Browns' products on the marketplace. Digital Platform Services third-party revenue decreased by 2.5 percent. Digital platform fulfilment revenue decreased 4.7 percent, above the overall digital platform GMV decline of 3.3 percent. Brand platform revenue increased by 60.3 percent. Farfetch profit drops, targets break-even adjusted EBITDA Profit after tax decreased by 20.2 million dollars to 67.7 million dollars in the second quarter, with the increase in gross profit of 37.6 million dollars. Basic EPS was 18 cents and diluted EPS was negative 50 cents. Adjusted EBITDA declined by 3.6 million dollars to negative 24.2 million dollars and adjusted EBITDA margin declined from negative 4.7 percent to negative 4.9 percent. For the full year, Farfetch expects digital platform GMV growth of 0 percent to 5 percent, brand platform GMV growth of 0 percent to 10 percent. The company is targeting break-even adjusted EBITDA.
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