Farfetch Limited reported an adjusted Ebitda loss of $30.6 million and a 1.3 percent drop in revenues to $572.1 million for Q2 ended June 30. The net loss at the internet platform for luxury goods was $281.3 million against a profit of $67.7 million. Gross merchandise value (GMV) inched 1.2 percent higher to $1.03 billion, but gross margin declined by 370 basis points to 42.5 percent from 46.2 percent.
In a statement, company CEO José Neves said the London-based company is continuing to adapt to the macro environment as it positions itself for GMV growth, adjusted Ebitda profitability and positive cash flow.
Brand platform GMV fell 41 percent to $63.4 million due to the timing of shipments and a decline in wholesale orders that was partially offset by a European partnership with Reebok that commenced in May. Brand platform gross margin contracted by 20 basis points to 52.5 percent. Digital platform services revenues rose by 9.9 percent to $391.3 million as digital GMV increased by 6.9 percent to $944.3 million. Average order value (AOV) was down 5.9 percent in the channel to $561 as the order contribution margin contracted by 50 basis points to 31.2 percent. Third-party transactions generated 80 percent of the digital platform GMV. During H1, Farfetch signed 30 new e-concession brand partners.
Farfetch’s current FY23 outlook calls for 7.3 percent growth in group GMV to $4.4 billion and an 8.7 percent year-over-year increase in revenue to $2.5 million. Brand platform GMV is forecast to be “broadly flat,” while digital platform GMV is expected to increase by 10 percent year-over-year to $3.85 billion.
