Farfetch posts 10.7% revenue growth

Farfetch released its financial results for the second quarter ending June 30, 2022, revealing a 10.7% increase in revenue to £489.5 million ($579.3 million).

The increase in revenue was driven by a 60.3% increase in branded platform revenue to £98.5m, 52.0% growth in store revenue and an increase of 0.7 % of revenue from the digital platform.

Gross profit increased by £31.7 million, or 16.3%, year-on-year to £226 million in the second quarter of 2022.

However, profit after tax fell by £17 million year-on-year, from £74 million in the second quarter of 2021 to £57 million in the second quarter of 2022. Farfetch said the he increase in gross profit of £31.7 million was more than offset by an increase in selling, general and administrative expenses of £46.3 million.

Gross merchandise value increased 1.3%, while its digital platform’s GMV decreased 3.3% year-over-year. In-store GMV increased by 38.8%, driven by additional store openings of New Guards brands in the last twelve months as well as growth in existing stores

Looking forward, Farfetch expects the following results for FY22:

  • Digital platform GMV growth of 0% to 5% year-over-year
  • Brand Platform GMV growth of 0% to 10% year-over-year
  • Breakeven Adjusted EBITDA target

The retailer acknowledged that the impact of the pandemic, macroeconomic factors and geopolitical unrest, including the war in Ukraine, could have a significant impact on its future performance and projections.

These factors could result in disruptions to operations and shipments, weakened customer sentiment and discretionary income resulting from various macroeconomic conditions, increased costs to support operations, and slower e-commerce consumer activity as populations are resuming their pre-pandemic activities and lifestyles.

José Neves, Founder, Chairman and CEO of Farfetch, said: “This week we celebrated a major milestone towards that mission, with a transformational agreement advancing our Luxury New Retail (LNR) partnership with Richemont.

“From the acquisition of Browns, through the launch of F90 ​​with Gucci, partnerships with Chanel and Harrods, our Chinese JV with Alibaba, Richemont and Kering, and the more recent signings of Neiman Marcus and Salvatore Ferragamo, to name a few. just a few of the milestones, we have relentlessly built on that vision – year after year – and this week we are celebrating a historic partnership where we are partnering with Richemont to provide LNR to their entire group, their Houses and YNAP adopting Farfetch Platform Solutions and also joining the Marketplace is our long-term vision coming to life.

“And while our eyes are fixed on our North Star, our feet remain firmly planted on the ground. We navigate deftly through a volatile macro environment, continuing to show growth adding to what has been a terrific 3-year run. for Farfetch, a period that has seen our business double, measured by our GMV. This makes me extremely optimistic for 2023, a year where we will complete the closure of our operations in Russia, expect China to become a tailwind and starting to see the fruits of the major transactions signed this year with Reebok, Neiman Marcus Group and Salvatore Ferragamo. These 2023 growth vectors, combined with the cost rationalization that we are implementing this year, make me very confident about our revenue. business, our profitability and our cash generation in 2023.”

Elliot Jordan, Chief Financial Officer of Farfetch, added: “In the second quarter of 2022, Farfetch demonstrated our ability to meet macroeconomic challenges while delivering robust underlying growth and managing resources effectively. We achieved revenue growth, at constant currency, of 21% year-over-year. year, and increased gross profit margins with strong unit profitability. We remain focused on continuing to navigate the near-term macro environment, and I am excited about the multiple growth levers and drivers of profitability in 2023 and beyond.

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