The British fashion retailer Farfetch Limited announced surprisingly strong sales growth in the first quarter of the 2023 financial year on Thursday evening. As a result, the company’s share price immediately rose by more than twenty percent.
For the January-March period, Farfetch had consolidated revenues of $556.4 million (EUR 515.7 million), up 8 percent (up 12 percent at constant currency) from the same quarter last year. However, gross merchandise volume (GMV), which also includes the sales of partner brands on the online platform, grew by only 0.1 percent (+3.6 percent at constant currency) to USD 931.7 million. The company blamed the discontinuation of business in Russia last year and the still noticeable consequences of the pandemic-related weakness in demand in China.
Adjusted for special effects, loss before interest, taxes, depreciation and amortization (EBITDA) was slightly lower than in the same quarter of the previous year: it fell by 2.9 percent to 34.7 million US dollars. The bottom line was a net loss of US$174.3 million (€161.5 million) after a surplus of US$728.8 million in the same period last year. The significant change resulted primarily from the revaluation of various financial instruments.
The company did not change its forecast for the full fiscal year. Management continues to target an increase in GMV to approximately $4.9 billion. The EBITDA margin adjusted for special effects, which was -4.9 percent in 2022, is to be improved to between +1 and +3 percent.