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Farfetch posts 10.7% increase in revenue

Jeremy Lim
26 August 2022

Farfetch has released its financial results for the second quarter ending 30 June 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 Brand Platform Revenue to £98.5 million, a 52.0% growth in In-Store Revenue and an increase in Digital Platform Revenue of 0.7%.

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

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

Gross Merchandise Value increased 1.3% while its Digital Platform GMV decreased 3.3% year-over-year. In-Store GMV increased by 38.8%, driven by additional openings of New Guards brands' stores in the last twelve months as well as growth from existing stores

Looking ahead, 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
  • Targeting break-even Adjusted EBITDA

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

These factors could see disruptions to operations and shipments, weakened customer sentiment and discretionary income arising from various macroeconomic conditions, increased costs to support operations and slowing e-commerce consumer activity as populations resume to pre-pandemic activities and lifestyles.

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

"Since the acquisition of Browns, through the launch of F90 with Gucci, partnerships with Chanel and Harrods, our China JV with Alibaba, Richemont and Kering, and more recent signings of Neiman Marcus and Salvatore Ferragamo, to name just some of the milestones, we have built upon this vision relentlessly - year after year - and this week we celebrate a landmark partnership where we are partnering with Richemont to deliver LNR to their entire group, with their Maisons and YNAP adopting Farfetch Platform Solutions and also joining the Marketplace. This is our long-term vision coming to life.

"And while our eyes are fixed on our North Star, our feet remain planted firmly on the ground. We are navigating a volatile macro environment adeptly, continuing to post growth compounding on what has been a tremendous 3-year run for Farfetch, a period that saw our business double as measured by our GMV. This makes me extremely bullish for 2023, a year when we will lap our closure of our Russia operations, expect China to turn into a tailwind, and will start to see the fruits of large deals signed this year with Reebok, Neiman Marcus Group and Salvatore Ferragamo. These 2023 vectors of growth, combined with the rationalisation of costs we are implementing this year, make me very confident about our 2023 top line, profitability and cash generation."

Elliot Jordan, CFO of Farfetch, added: "In second quarter 2022 Farfetch demonstrated our ability to navigate macro challenges while delivering robust underlying growth and managing resources effectively. We achieved revenue growth, on a constant currency basis, of 21% year-on-year, and expanded 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 levers of growth and drivers of profitability in 2023 and beyond."

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