- Prachi Singh |
Farfetch Limited, for the third quarter ended September 30, 2019, reported revenue increase of 121 million dollars to 255.5 million dollars, representing growth of 89.9 percent. Gross Merchandise Value (GMV) for the quarter increased by 182 million dollars to 492 million dollars, representing year-over-year growth of 58.7 percent. The company’s loss after tax increased by 8.2 million dollars or 10.6 percent to 85.5 million dollars.
Commenting on the company’s performance, José Neves, Farfetch Founder, CEO and Co-Chair said in a statement: “We had a fantastic Q3, beating all our expectations, and continuing to capture market share at a rapid pace. We also remain focused on driving the cultural relevance of the Farfetch brand, and in that context I am delighted with our initial progress in integrating New Guards Group.”
Review of Farfetch’s Q3 trading update
The company said, revenue increase was primarily driven by 44 percent growth in digital platform services revenue to 156.5 million dollars and the addition of brand platform revenue from New Guards Group. In-store revenue increased by 121.9 percent to 9.1 million dollars due to the addition of revenue from New Guards Group’s directly-operated stores and growth in Browns stores. The increase in digital platform services revenue was driven by 37.4 percent growth in digital platform GMV, offset by a decline in third-party take rate to 31.2 percent. The company added that digital platform services revenue was also boosted by growth in first-party GMV, which nearly doubled year-on-year and is included in digital platform services revenue at 100 percent of the GMV.
The company further said that digital platform GMV increased by 114.4 million dollars to 420.3 million dollars, representing year-over-year growth of 37.4 percent, reflecting growth in digital platform GMV and the addition of 62.7 million dollars from New Guards Group which was acquired in August 2019. The increase in digital platform GMV, the company said, was driven by increases in active consumers to 1.9 million and average number of orders, partially offset by decreases in average order values.
Farfetch’s Q3 gross profit increases by 70.9 percent
Gross profit for the quarter increased by 47.8 million dollars or 70.9 percent year-over-year to 115.1 million dollars in third quarter 2019, due to the growth in digital platform services revenue and the addition of New Guards Group’s brand platform operations. Gross profit margin decreased from 50.1 percent to 45.1 percent year-over-year.
Adjusted EBITDA loss increased by 3.3 million dollars or 10.3 percent to 35.6 million dollars, while adjusted EBITDA margin improved from negative 28.7 percent to negative 15.6 percent over the same period.
For the fourth quarter, Farfetch expects digital platform GMV growth of 30 percent to 35 percent, brand platform GMV of 80 million dollars to 90 million dollars and adjusted EBITDA loss of approximately 21 million dollars to 31 million dollars.