- Prachi Singh |
Gross merchandise value at Farfetch for the third quarter increased by 305.8 million dollars 797.8 million dollars, representing year-over-year growth of 62.2 percent. The company said in a statement that digital platform GMV increased by 253.8 million dollars to 674.1 million dollars, growth of 60.4 percent. Revenue for the quarter increased by 182.2 million dollars to 437.7 million dollars, rise of 71.3 percent, which was driven by 68.1 percent growth in digital platform services revenue to 263 million dollars, plus the impact of the acquisition of New Guards during third quarter 2019.
Commenting on the company’s performance, José Neves, Farfetch Founder, Chairman and CEO said: “The Farfetch platform continued to accelerate in third quarter 2020, setting another quarterly GMV record and further indicating we are witnessing a paradigm shift in favour of online luxury. What we are seeing is the acceleration of the secular trend of online adoption in luxury – an industry that is still very underpenetrated.”
Highlights of Farfetch’s Q3 trading results
The company added that in-store revenue increased by 25.8 percent to 11.4 million dollars, driven by the acquisition of New Guards retail stores in August 2019, as well as the opening of new stores throughout the year, partially offset by reduced foot traffic across our retail store network as a result of Covid-19 restrictions.
The increase in digital platform services revenue of 68.1 percent, Farfetch said, was driven by 60.4 percent overall growth in digital platform GMV. Digital platform services first-party GMV increased 113.9 percent to 105.9 million dollars, driven by the integration of New Guards to the Farfetch Marketplace during fourth quarter 2019, as well as growth in Browns, primarily driven by a higher sell-through of full-price products. In third quarter 2020, digital platform fulfilment revenue increased 86.8 percent, due to a reduced number of Farfetch-funded promotions year-over-year.
Gross profit for the quarter increased by 93.9 million dollars or 81.6 percent to 209 million dollars in third quarter 2020, primarily due to growth in digital platform services revenue and the addition of New Guards gross profit starting from August 2019, while gross profit margin increased from 45.1 percent to 47.8 percent. The company further said that adjusted EBITDA improved by 25.3 million dollars to negative 10.3 million dollars in third quarter 2020, while adjusted EBITDA margin improved from negative 15.6 percent to negative 2.7 percent over the same prior year period. Loss after tax increased by 446.5 million dollars to 537 million dollars in third quarter 2020.
For the fourth quarter, Farfetch expects digital platform GMV of 880 million dollars to 910 million dollars, representing growth of 40 percent to 45 percent year-over-year, brand platform GMV of 85 million dollars to 90 million dollars and positive adjusted EBITDA.