Farfetch, the luxury fashion platform, has released its financial results for the second quarter of 2022, showcasing growth and progress in various areas. While the company continues to face losses at an adjusted EBITDA level, it has reported positive figures and improvements.
In terms of Gross Merchandise Value (GMV), Farfetch saw a 1.3% increase in Q2 2022 compared to the same period last year, reaching $1 billion. In constant currency, GMV rose by 7.6%. However, Digital Platform GMV fell by 3.3% to $883.1 million, though it increased by 1.6% in constant currency. On the other hand, Brand Platform GMV experienced significant growth, soaring by 47.3% to $107.1 million. Additionally, revenue saw a positive increase from $523.3 million to $579.3 million.
Farfetch also witnessed an improvement in its gross profit margin, which rose from 44% to 46.2%. Profit after tax stood at $67.7 million, including a one-off non-cash benefit. However, the adjusted EBITDA recorded a loss of $24.2 million, wider than the previous Q2 loss of $20.5 million due to increased costs.
The company continues its transition towards full-price sales on its marketplace, resulting in a 20% increase in full-price GMV, excluding Russia and Mainland China. Farfetch announced several important developments during the quarter, including a global strategic partnership with Salvatore Ferragamo to strengthen its presence on the marketplace and target a younger audience through Media Solutions. Additionally, Farfetch Platform Solutions (FPS) expanded its client roster by launching Sacai’s global monobrand e-commerce site. Collaborations with brands like Karl Lagerfeld, De Beers, and Chopard on special campaigns contributed to the company’s growth.
Farfetch also introduced partnerships between Opening Ceremony and Peter Do, and Interview Magazine and Tabboo as part of its fashion-meets-culture retail series called Farfetch BEAT. Furthermore, its New Guards brands made noteworthy collaborations, such as Off-White partnering with Major League Baseball and New Era Capsule, along with Church’s second genderless capsule collection.
CEO José Neves emphasized Farfetch’s ambition to become the leading global platform for luxury. He mentioned that recent acquisitions and partnerships, including the collaboration with Yoox Net-A-Porter, will contribute to achieving this goal. Neves expressed confidence in the company’s future, expecting significant growth in 2023 as a result of closing its operations in Russia, favorable conditions in the Chinese market, and partnerships with Reebok, Neiman Marcus Group, and Salvatore Ferragamo.
Looking forward, Farfetch anticipates Digital Platform GMV growth of 0%-5% YoY and Brand Platform GMV growth of 0%-10%. The company aims to break even on an adjusted EBITDA basis for the full year. Despite the challenges posed by a volatile macro environment, Farfetch remains optimistic about its long-term vision and believes it is on track to achieve its goals.
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