admin Farfetch Limited’s GMV increased 1.2 percent in the second quarter to 1,032.6 million dollars, while revenue decreased 7.3 million dollars to 572.1 million dollars, down 1.3 percent.
The company said in a statement, this decrease was primarily driven by a 42.2 percent decrease in brand platform revenue to 67.4 million dollars, as well as a 15.1 percent decrease in in-store revenue to 22.7 million dollars. These decreases, the company added, were partially offset by an increase in digital platform revenue of 10.5 percent to 482 million dollars.
Commenting on the second quarter trading, José Neves, Farfetch founder, chairman and CEO, said: “Our Q2 results show Farfetch is growing, becoming more efficient, and executing on our key strategic priorities. We have also taken decisive action to adapt to the macro environment of the last 18 months. 2023 is set up to be a great year for Farfetch, toward strong GMV growth, adjusted EBITDA profitability and positive free cash flow.”
Farfetch expectations for the full year
For the full year, Farfetch expects group GMV of approximately 4.4 billion dollars, up from 4.1 billion dollars in 2022, digital platform GMV of approximately 3.85 billion dollars, up from 3.5 billion dollars in 2022, and brand platform GMV of approximately 0.45 billion dollars, broadly flat compared to 2022.
The company forecasts revenue of approximately 2.5 billion dollars, up from 2.3 billion dollars in 2022.
Digital platform order contribution margin is expected to range between 33 percent to 35 percent, up from 32 percent in 2022, and positive adjusted EBITDA margin up to 1 percent, improving from negative 5 percent in 2022.
Highlights of Farfetch’s Q2 results
The company’s digital platform GMV increased 61.2 dollars million to 944.3 million dollars, representing a year-over-year increase of 6.9 percent, brand platform GMV decreased 40.8 percent to 63.4 million dollars, and in-store GMV decreased 17.5 percent to 24.9 million dollars in the second quarter.
Digital platform services revenue increased 9.9 percent, reflecting a 14.6 percent increase in first-party revenue and a 6.3 percent increase in third-party revenue.
Digital platform fulfilment revenue increased 13.5 percent, due to an increase in duties and a decrease in Farfetch-funded promotions. Brand platform revenue decreased 42.2 percent.
Gross profit decreased 24.8 million dollars or 9.3 percent, while gross profit margin decreased 370 bps to 42.5 percent and digital platform gross profit margin decreased 340 bps to 49.3 percent.
Loss after tax decreased 349 million dollars to a 281.3 million dollars loss in second quarter 2023, while basic and diluted EPS was negative 68 cents.
Adjusted EBITDA decreased 6.3 million dollars to a loss of 30.6 million dollars, a 26.2 percent decline compared to second quarter 2022. Adjusted EBITDA Margin decreased by 150 bps to negative 6.4 percent.
