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Farfetch: growth slowed down in the fourth quarter of 2022

Feb 27, 2023 United Kingdom
Farfetch: growth slowed down in the fourth quarter of 2022
Despite achieving a record full year revenue, the luxury online retailer reported a fourth quarter 5% revenue decline and a 12% GMV decrease, as compared to the same quarter of fiscal 2021
In the fourth quarter of last year, Farfetch's Gross Merchandise Value (GMV) amounted to 1.29 billion US dollars, down by 11.6%, on a comparable basis to the same period of the prior year.

The company noted that the Digital Platform GMV in this period declined by 11.7% year-over-year to 1.01 billion US dollars, continuing to reflect the impact of the suspension of trade in Russia since March 2022, as well as the impact of regional COVID-19 restrictions in Mainland China. Fourth quarter Brand Platform GMV also decreased by 14.5%, as compared to the same quarter of fiscal 2021, totalling 100.2 million US dollars. In-store GMV was the only one to increase in the last quarter of 2022, respectively, by 5.6% year-over-year to 27.3 million US dollars.

Farfetch's fourth quarter revenue declined by 5%, on a comparable basis to the same period of the previous year, reaching 629.2 million US dollars. This performance “was driven by a decrease in Digital Platform Revenue of 3.7% to 506.4 million US dollars, a 16.2% decrease in Brand Platform Revenue to 98.2 million US dollars, partially offset by 9.3% growth in In-Store Revenue to 24.5 million US dollars”, it reads the statement.

The luxury online retailer posted a profit loss of 176.7 million US dollars in the last quarter of the past year, as compared to a profit of 96.9 million US dollars in the same period of 2021.

Full Year Results

“I am proud to report Farfetch adeptly navigated unprecedented macro headwinds throughout 2022 to deliver growth on a constant currency basis, with full year GMV of 4.1 billion US dollars. Our performance also means we captured market share on a 3-year stack basis, with GMV nearly doubling since the onset of the COVID-19 pandemic - a truly remarkable accomplishment”, commented José Neves, Farfetch Founder, Chairman and CEO.

Over 2022, Farfetch's GMV was down by 4%, totalling 4.05 billion US dollars, on a comparable basis to the previous year, with the Digital Platform GMV declining by 5% to 3.49 billion US dollars, the Brand Platform GMV decreasing by 2.6% to 467 million US dollars and the In-Store GMV increasing by 31.3% to 100.8 million US dollars. Still, the company's full year revenue grew by 6%, as compared to 2021, reaching 2.31 billion US dollars.

Full year's adjusted EBITDA margin was negative 4.9%, as compared to the EBITDA margin of 0.1% recorded over fiscal 2021.

Fiscal 2023 Outlook

Farfetch is expecting to reach a full year 2023 GMV of approximately 4.9 billion US dollars, comprised of Digital Platform GMV of close to 4.2 million US dollars and Brand Platform GMV of about 0.6 billion US dollars. Adjusted EBITDA Margin is anticipated at between 1% to 3%.

“Farfetch enters 2023 as a significantly more efficient business following our strategic reorganization and cost rationalizations. Our solid start to the year gives me confidence 2023 will be a Year of Execution with growth building throughout the year as we comp the previous year's macro headwinds and launch exciting new partners to deliver strong growth, Adjusted EBITDA and positive free cash flow”, concluded José Neves.


Image Credits: theimpression.com


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