Farfetch Slumps as Revenue Falls Short, Guidance Cut

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Farfetch Slumps as Revenue Falls Short, Guidance Cut
Credit: © Reuters.

By Dhirendra Tripathi

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

Gross merchandise value of goods sold rose 28% to exceed $1 billion for the second consecutive quarter.

GMV is the most commonly used barometer to determine the size and health of an e-commerce site and signifies the total value of products and services sold on the platform.

Revenue rose 33% year-over-year to $583 million as supply from both multi-brand retailers and other partners continued to increase.

GMV had risen 40% and revenue 43% year-on-year in the second quarter.

Revenue was lower than expectations, however, and the company attributed the slowing pace to strong comparative growth delivered in the third quarter of 2020.

Farfetch closed September with 3.5 million active consumers compared to 2.7 million at the end of the same month in 2020.

The adjusted loss of 14 cents narrowed from last time and was ahead of estimates.

The retailer now expects its digital platform GMV to grow by 33%, down from the 35% to 40% growth forecast it had put out just three months back.

Digital platform GMV in the third quarter rose 23%, to $829 million.

Last week, Farfetch confirmed it is in talks to take a minority stake in Cartier-owner Richemont 's (SIX: CFR ) luxury ecommerce platform Yoox (MI: YNAP ). A Reuters report quoted Prada (HK: 1913 ) 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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