Farfetch posts flat revenue growth, GMV declines

Farfetch Limited GMV for the third quarter decreased 49.9 million dollars to 967.4 million dollars, representing a year-over-year decline of 4.9 percent.

Revenue increased 10.8 million dollars to 593.4 million dollars, representing growth of 1.9 percent driven by an increase in digital platform revenue of 1.6 percent, a 39.7 percent growth in in-store revenue, offset by a 2.1 percent decrease in brand platform revenue to 161.8 million dollars.

For the full year, Farfetch expects digital platform GMV decline of 5 percent to 7 percent, band platform GMV broadly flat and adjusted EBITDA margin of negative 3 percent to negative 5 percent.

Commenting on the third quarter trading, José Neves, Farfetch founder, chairman and CEO, said in a statement: “Luxury is an incredible industry that has proven to be resilient, and Farfetch’s global platform for luxury is on pace to broadly double its size over three years, despite navigating an unprecedented series of global events.”

Highlights of Farfetch’s Q3 performance

The company’s digital platform services revenue increased 1.7 percent year-over-year driven by first-party revenue. Digital platform services first-party revenue increased 4 percent as compared to the previous year, primarily driven by increased sales of Browns' products on the marketplace, supported by increased clearance activity. Digital Platform Services third-party revenue remained flat, at an increase of 0.1 percent, offset by growth in advertising revenue.

Digital platform fulfilment revenue increased 1 percent, above the overall digital platform GMV decline of 5 percent, resulting from an increased pass-through of such costs to consumers in third quarter 2022.

The company added that brand platform revenue decreased 2.1 percent, which was slower than the decline in GMV, due to the addition to revenue of 13.7 million dollars generated by the net economic benefit from the Reebok partnership that commenced in March 2022.

Farfetch reports Q3 loss

The company’s gross profit increased 14.4 million dollars or 5.7 percent to 266.6 million dollars in the third quarter, while gross profit margin increased 160 bps to 44.9 percent, driven by margin improvements in all three segments.

Loss after tax decreased 1,044 million dollars from a 769.1 million dollars profit in third quarter 2021 to a 274.9 million dollars loss in third quarter 2022. Third quarter basic EPS was negative 71 cents and diluted EPS was also negative 71 cents.

Adjusted EBITDA declined by 9.4 million dollars to negative 4.1 million dollars and adjusted EBITDA Margin declined from 1.1 percent to negative 0.8 percent in third quarter 2022.