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Farfetch Slumps as Revenue Falls Short, Guidance Cut -Breaking

by Mike Robinson

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© Reuters.

By Dhirendra Tripathi

Investing.com – Farfetch stock (NYSE:) slumped 8% Friday as the luxury retailer’s third-quarter sales disappointed and it lowered its guidance.

The second quarter saw a 28% increase in gross merchandise value, surpassing $1 billion.

GMV, which is the most widely used barometer for determining the health and size of an ecommerce website, signifies the total amount of services and products sold.

As supply continued to grow from multi-brand retailers as well as other partners, revenue rose 33% to $583 Million.

GMV rose 40%, and revenue was 43% in the second quarter.

However, revenue was less than expected. The company attributes the slower pace of growth to the strong comparative performance in the third quarter 2020.

Farfetch finished September with 3.5million active users, as compared to 2.75 million in the month of 2020.

The loss adjusted of 14 cents was lower than last time, and it was higher than estimates.

Now, the retailer expects that its GMV digital platform will grow by 33%. This is a decrease from the forecast of 35% to 40% it gave just three months ago.

The digital platform GMV grew 23% to $829 Million in the third quarter.

Last week, Farfetch confirmed it is in talks to take a minority stake in Cartier-owner Richemont Yoox (MI), a premium ecommerce platform for luxury brands, is (SIX): A Reuters report quoted Prada (HK:) marketing chief Lorenzo Bertelli as saying the Italian luxury brand expects to join Richemont-Farfetch talks over a joint online platform. 

 

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