Farfetch sees 6.1% increase in Q1 revenues but warns of China and Russia impact
Farfetch has released its financial results for the first quarter ending 31 March 2022, revealing a 6.1% increase in revenue to £407.8 million.
The increase in revenue was driven by a 9.3% growth in digital platform revenue to £313.4 million and a 74.8% growth in in-store revenue, offset by a 10.5% decrease in brand platform revenue to £79.6 million.
Gross profit rose by £7.6 million, or 4.4%, year-over-year, to £182.6 million. Profit after tax increased by £168 million year-over-year to £577.4 million.
However, adjusted EBITDA declined by £13.2 million and adjusted EBITDA margin declined from (4.7%) to (8.2%) due to the decline in brand platform revenue.
Gross Merchandise Value and Digital Platform GMV increased 1.7% and 2.5% year-over-year. In-Store GMV increased by 62%, driven by additional openings of New Guards brands stores in the last 12 months as well as growth from existing stores.
Looking ahead, Farfetch expects the following results for FY22:
- Digital Platform GMV growth of 5% to 10% year-over-year.
- Brand Platform GMV growth of 10% to 15% year-over-year.
- Adjusted EBITDA margin of 0% to 1%.
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: "Our core business remains very strong, in spite of the macro events in China and ceasing operations in Russia, which impacted our performance and outlook. We are galvanised by the opportunity to focus our efforts in 2022 to further rationalise our business, aligning our fixed cost profile with lower near-term growth, which I believe will enable us to exit 2022 from a position of strength.
"Outside these external factors, we saw strong marketplace growth in the Americas and the Middle East, in first quarter 2022, our customer and luxury brand relations are going from strength to strength, and we continue to make progress towards our mission of building the global platform for luxury."