Farfetch revenue and profit decline in Q4, CFO to step down

Farfetch announced Thursday that revenue decreased 36.5 million dollars to 629.2 million dollars in the fourth quarter of 2022, down 5.5 percent.

Revenue for the full year was up 3 percent to 2.3 billion dollars, up 12 percent at constant currency.

The fourth quarter revenue decline was driven by a 3.7 percent drop in digital platform revenue to 506.4 million dollars and a 16.2 percent decrease in brand platform revenue to 98.2 million dollars, which were partially offset by a 9.3 percent increase in in-store revenue to 24.5 million dollars.

The company’s GMV decreased 11.6 percent to 1.14 billion dollars in the fourth quarter, while Digital platform GMV decreased 11.7 percent to 1.01 billion dollars. For the full year, GMV decreased 4 percent to 4.06 billion dollars - or increased 2 percent at constant currency.

Farfetch also announced that after more than eight years as chief financial officer, Elliot Jordan will step down by the end of 2023.

Commenting on the results and CFO departure, José Neves, Farfetch founder, chairman and CEO, said in a release: “I am proud to report Farfetch adeptly navigated unprecedented macro headwinds throughout 2022 to deliver growth on a constant currency basis, with full year GMV of 4.1 billion dollars. Elliot has been a fantastic CFO, and I very much appreciate his continued commitment to the business until the end of the year.”

Highlights of Farfetch’s Q4 results

The company said digital platform services revenue decreased 2.1 percent driven by third-party revenue. Digital platform services first-party revenue increased 11.5 percent as compared to the previous year, while digital platform services third-party revenue decreased year-over-year by 10.2 percent.

Digital platform fulfilment revenue decreased 11 percent, while brand platform revenue decreased 16.2 percent.

The company swung to a loss after tax of 176.7 million dollars from a profit of 96.9 million dollars a year earlier. Fourth quarter basic EPS was negative 44 cents and diluted EPS was negative 66 cents.

Adjusted EBITDA loss was 34.6 million dollars from a profit of 36.1 million dollars a year earlier. EBITDA Margin declined from 6.3 percent to negative 6.3 percent in fourth quarter 2022.

For the fiscal year 2023, Farfetch expects Group GMV of approximately 4.9 billion dollars, digital platform GMV of approximately 4.2 billion dollars, brand platform GMV of approximately 0.6 billion dollars, and adjusted EBITDA margin of 1 percent to 3 percent.