The listed online platform for luxury fashion, Farfetch Limited, was able to increase sales by 1.9 percent to 593.4 million US dollars in the third quarter of the current fiscal year, or by 14.1 percent after adjusting for currency effects. At the same time, however, earnings fell: While Farfetch was able to post an after-tax profit of $769 million in the same period of 2021, the company made a loss after tax of $274.9 million in the third quarter of 2022. The quarter ended on September 30th.
Gross merchandise value (GMV) also fell 4.9 percent year-over-year, but increased 4.2 percent in constant currency to $967.4 million. Similarly, the digital platform saw its GMV fall 5 percent to $787.4 million, but grew 2.6 percent in constant currency. Brand platform GMV also fell 10.4 percent to $148.1 million and increased 4.9 percent year-over-year on a constant currency basis.
The digital platform’s GMV performance in Q3 2022 reflects continued headwinds from trading suspensions in Russia, where trading has been halted since March 2022, and in mainland China, where regional COVID-19 restrictions have hampered trading continue to affect.
Unprecedented macroeconomic environment
Elliot Jordan, CFO of Farfetch, commented, “Our third quarter results show that Farfetch is successfully navigating an unprecedented macro environment, with currency-neutral GMV and revenue growth, significant improvements in gross margin and contribution margin on orders in the Compared to last year and the first financial benefits of our recent initiatives to rationalize our cost base, which are ongoing. As we continue to battle our way through the current environment, we remain well capitalized to execute on our long-term vision and I am confident that we will return to profitable growth in 2023.”
Commenting on the company’s overall evolution over the past few years, José Neves, Farfetch Founder, Chairman and CEO said, “Luxury is an incredible industry that has proven to be resilient and Farfetch’s global luxury platform is on track to largely doubling in size within three years despite undergoing a series of unprecedented global events. Throughout, we have remained focused on our mission to be the global platform for luxury goods, while seizing the opportunity to fundamentally restructure our organization and streamline our cost base. The result is that Farfetch is better positioned to capitalize on the announced milestones and future opportunities, and to emerge from this period as an even stronger company capable of delivering profitability and free cash flow.”