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Farfetch remains optimistic despite stumbles in the second quarter

Aug 29, 2023 United Kingdom
Farfetch remains optimistic despite stumbles in the second quarter
The UK-based luxury platform posted a small drop in revenue in the second quarter of 2023, as compared to the same period of 2022, while profits remain in the red zone since the first quarter
“Our Q2 results show Farfetch is growing, becoming more efficient, and executing on our key strategic priorities. We have also taken decisive action to adapt to the macro environment of the last 18 months. 2023 is set up to be a great year for Farfetch, toward strong GMV growth, Adjusted EBITDA profitability and positive free cash flow. All the while we remain steadfast on delivering our strategic vision of becoming the global platform for luxury”, commented José Neves, Farfetch Founder, Chairman and CEO.

Second Quarter Results

In the second quarter of the current fiscal year, Farfetch's Gross Merchandise Value (GMV) was up by 1.2% from the same period of fiscal 2022, amounting to 1.03 billion US dollars; excluding the impact of changes in foreign exchange rates, GMV would have increased by 0.8% year-over-year.

The company's Digital Platform GMV returned to growth in the second quarter of 2023, “as the prior year period no longer includes Russia following the March 2022 stoppage of our operations in the region”. Therefore, it grew by 6.0%, as compared to the same quarter of last year, reaching 944.3 billion US dollars.

Meanwhile, and mainly “due to the timing of shipments and a decline in wholesale orders”, Farfetch's Brand Platform GMV declined in the same period by 40.8% year-over-year to 63.4 billion US dollars. In addition, its In-Store GMV also decreased by 17.5% year-over-year, amounting to 24.9 billion US dollars, thanks to lower sales in-store in the US, only partially offset by growth in Europe.

Therefore, in the quarter that ended on the 30th of June, the luxury e-tailer's revenue totalled 572.1 million US dollars, down by 1.3% on a comparable basis to a similar period of the prior year. This decline “was primarily driven by a 42.2% decrease in Brand Platform revenue, as well as a 15.1% decrease in In-Store revenue”, which were partially offset by an increase of 9.9% in the Digital Platform revenue.

Farfetch's second quarter adjusted EBITDA decreased by 26.2% from the same prior year's period to a loss of 30.6 million US dollars, and its adjusted EBITDA margin narrowed accordingly by 150 basis points to a negative 6.4% - mainly “due to the aforementioned decline in Brand Platform Revenue”.  

Furthermore, the company posted a profit loss after tax of 281.3 million US dollars in the second quarter of fiscal 2023, as compared to 6.7 million US dollars in profit in the same quarter of the previous year.


Image Credits: farfetch.com

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