Farfetch has reported declining sales and profit, “primarily driven by a 42.2% decrease in brand platform revenue”.
In a trading update for the second quarter ending June 2023, Farfetch reported a 1.3% decrease in revenue to $572.1m (£450.1m) compared with the $579.3m (£455.7m) the business reported during the same period last year.
Gross profit decreased by 9.3% year on year to $242.9m (£191.1m) in the second quarter of 2023 compared with the $267.7m (£210.6m) reported in 2022.
As well as the decrease in brand platform revenue to $67.4m (£53m), the luxury retailer highlighted a 15.1% decrease in in-store revenue to $22.7mn (£17.8m). These figures were partially offset by an increase in digital platform revenue of 10.5% to $482.0m (£379.2m).
José Neves, Farfetch founder, chair and chief executive, 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 gross merchandise value growth, adjusted EBITDA profitability and positive free cash flow. All the while we remain steadfast on delivering our strategic vision of becoming the global platform for luxury.”
Elliot Jordan, Farfetch chief financial officer, said: “I’m pleased with our second quarter performance, which demonstrates our progress towards delivering profitable growth and positive free cash flow in 2023.
“Our digital platform has performed particularly well, returning to growth while maintaining a stable order contribution margin.
“This, coupled with significant savings in the cost base across all areas of the business, means our digital platform is more profitable than last year. We enter the second half well positioned to achieve faster levels of growth, with a lower cost base and strong liquidity.”
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