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Global Fashion Group posts 16 percent revenue growth in Q3

By Prachi Singh

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Management

Global Fashion Group (GFG) said that the operating momentum was strong in the third quarter with improving margins across all regions. GFG said, third quarter net revenue grew 16 percent on a constant currency pro-forma basis to 250 million euros (265 million dollars), despite continued macroeconomic challenges in Dafiti, Lamoda and Namshi, increased pricing pressure across many markets and the continued focus on the integration of Kanui and Tricae in Brazil. NMV, which includes marketplace sales, increased 22.2 percent on a constant currency basis to 255 million euros (271 million dollars).

For the nine months period, net revenues grew 28.8 percent and NMV grew 34.1 percent on a constant currency pro-forma basis. As a result of a well-executed inventory transition between seasons, GFG said, it realised year-on-year improved sell-through rates, delivering gross margin improvements in Q3 of 2.8 percentage points. The gross margin increased to 41.4 percent and the adjusted EBITDA margin improved from 27.4 percent in Q3 2015 to 12.9 percent in Q3 2016. Adjusted EBITDA loss improved by 22 million euros (23 million dollars) or approximately 40% between Q3 2015 and Q3 2016.

Posts improved results across marketplaces

Net revenue and NMV growth on a constant currency basis at Lamoda was 33.6 percent and 34.3 percent for Q3 2016 and of 38.5 percent and 39.8 percent for nine months, respectively. These results, the company said, were achieved despite a weak retail environment and strong macroeconomic headwinds that have resulted in continued discounting pressures and higher coupon realisation. Adjusted EBITDA improved by 0.5 million euros (0.53 million dollars) in Q3 and 10.3 million euros (10.9 million dollars) in nine months, which has led to improved adjusted EBITDA margins by 5.1pp to 13.8 percent and 8.1pp to 9 percent, respectively.

Dafiti reported slowdown in like-for-like net revenue and NMV growth on a constant currency basis of 0.9 percent and 6 percent, respectively due to a challenging macroeconomic environment, especially in Brazil and Argentina. For nine months, Dafiti delivered net revenue and NMV growth of 10.4 percent and 16.9 percent, respectively. The platform saw a strong gross margin improvement of 7.9pp to 45.3 percent for Q3 and of 5.9pp to 43.4 percent for nine months. Adjusted EBITDA improved by 11.1 million euros (11.8 million dollars) in Q3 and 38.8 million euros (41 million dollars) in nine months which has led to improvement in adjusted EBITDA margins of 19.8pp to 2.6 percent and 24.8pp to 7 percent, respectively.

Net revenue and NMV growth at Namishi on a constant currency basis was 10.8 percent and 21.6 percent for Q3 and of 35.3 percent and 39.5 percent for 9M 2016, respectively. The company maintained gross margin of 53.8 percent for Q3 and 53.4 percent for nine months and achieved first consecutive quarter of profitability with adjusted EBITDA improving 1.4 million euros in Q3 and by 4 million euros in the nine month period, which led to stronger adjusted EBITDA margins of 4.2pp to 2.9 percent and 4.5pp to 2.5 percent in Q3 and 9M 2016 respectively.

Zalora & Iconic net revenue and NMV like-for-like growth on a constant currency pro-forma basis was 26.1 percent and 33.9 percent for Q3 and of 40.3 percent and 48.9 percent for nine months. Gross margin improved 4.6pp to 39.1 percent in Q3 and 5.1pp to 38.5 percent for nine months, while adjusted EBITDA improved by 10.6 million euros (11 million dollars) in Q3 and 22.5 million euros (23 million dollars) in nine months leading to improved adjusted EBITDA margins by 25.7pp to 23.7 percent and 22.4pp to 24.8 percent, for Q3 and nine months, respectively.

Picture:Namshi.com

Global Fashion Group