Farfetch posts increase in Q2 GMV and sales, books profit

Farfetch Limited GMV increased by 286.5 million dollars in the second quarter to 1,007.8 million dollars, representing year-over-year growth of 39.7 percent. The company’s digital platform GMV increased by 262.3 million dollars to 913.4 million dollars, growth of 40.3 percent. Excluding the impact of changes in foreign exchange rates, the company said, digital platform GMV would have increased by 33.3 percent.

The company’s revenue increased by 158.6 million dollars to 523.3 million dollars in the second quarter, representing growth of 43.5 percent. The company said that the increase was primarily driven by 47.1 percent growth in digital platform revenue to 433 million dollars with overall growth impacted by comparatively lower brand platform revenue growth of 9.6 percent.

Commenting on the second quarter results, José Neves, Farfetch founder, chairman and CEO said in a statement: “I am very proud that Farfetch was a close partner for both retailers and brands in this time, delivering strong growth to our sellers, and as a result doubling our GMV in the last 24 months.”

Review of Farfetch’s Q2 performance

The company added that the increase in GMV primarily reflects the growth in digital platform GMV driven by order growth and an increase in marketplace AOV from 493 dollars to 599 dollars. During the second quarter, the company also saw year-over-year growth in transactions through websites managed by Farfetch platform solutions, primarily driven by growth within first-party businesses, including Off—White.com, and BrownsFashion.com.

The company further said that the increase in digital platform services revenue of 46.9 percent was driven by 40.3 percent overall growth in digital platform GMV with digital platform services first-party GMV, increasing 63.9 percent to 140.5 million dollars. The company’s digital platform fulfilment revenue increased 47.6 percent, above digital platform GMV growth of 40.3 percent.

In-store revenue increased by 349.2 percent to 17.6 million dollars and was primarily driven by revenue from additional New Guards portfolio brand stores opened within the last twelve months, as well as strong year-over-year growth due to temporary store closures in second quarter 2020, related to Covid-19 restrictions.

Farfetch returns to profitability in Q2

Farfetch gross profit increased by 70.7 million dollars or 44.4 percent to 230.1 million dollars in second quarter 2021. Gross profit margin increased 30 bps to 44 percent from 43.7 percent, due to digital platform services first-party and in-store growth.

Profit after tax increased by 523.8 million dollars from a loss of 435.9 million dollars to a profit of 87.9 million dollars in the second quarter 2021. Second quarter basic EPS was 24 cents and diluted EPS was negative 31 cents.

Adjusted EBITDA improved by 4.6 million dollars to negative 20.6 million dollars in the second quarter, while adjusted EBITDA margin improved from negative 8.2 percent to negative 4.7 percent.

For the full year, Farfetch expects digital platform GMV growth of 35 percent to 40 percent and adjusted EBITDA margin of 1 percent to 2 percent.

For the third quarter, the company anticipates digital platform GMV growth of approximately 30 percent, brand platform GMV growth of approximately 45 percent and adjusted EBITDA of approximately 10 million dollars.