Farfetch, the luxury fashion e-commerce platform, has released its second-quarter results for 2023, which showed a mix of positive and negative outcomes. While there was growth in important metrics like digital platform GMV and digital platform services revenue, the overall revenue and adjusted revenue experienced a decline. The company also reported a net loss for the quarter.

In terms of growth, Farfetch saw a 7% increase in digital platform GMV and a 10% increase in digital platform services revenue compared to the same period last year. The company also achieved a record number of active consumers, reaching a total of 4.1 million, which is a 7% increase year-on-year.

However, alongside these positive developments, there were areas of concern. Despite a rise in total group GMV to $1.32 billion from $1.02 billion, the overall revenue dropped to $572 million from $579 million. In addition, adjusted revenue also witnessed a decline, falling to $481 million from $499 million. One contributing factor to this decline was a significant decrease in brand platform revenue, which dropped by 42.2% to $67 million. Furthermore, revenue generated in-store also experienced a decline of 15.1% to $23 million.

Farfetch’s gross profit for the quarter was $242.87 million, down from $267.67 million, and the gross profit margin decreased to 42.5% from 46.2%. The company reported a net loss after tax of $281.3 million, compared to a profit of $67.6 million for the same period last year.

Despite these challenges, there were positive indicators for the company. Third-party transactions on the core digital platform accounted for 80% of GMV, reflecting strong demand and growth. The number of stock units supplied by both multi-brand retailers and e-concession partners also increased by over 40% year-on-year, reaching almost seventeen million. Additionally, Farfetch signed over 30 new e-concession brand partners in the first half of the year.

The increase in active consumers can be attributed to a higher utilization of personalized communications, which have shown higher conversion rates. Farfetch also introduced a feature that enables consumers to shop in their preferred language, regardless of their location, which could have contributed to the growth in active users.

Looking forward, Farfetch expects group GMV for the year to reach approximately $4.4 billion, up from $4.1 billion in 2022. Digital platform GMV is projected to be around $3.85 billion, an increase from $3.5 billion the previous year. Brand platform GMV is predicted to remain relatively flat at approximately $0.45 billion compared to 2022, while revenue is anticipated to reach around $2.5 billion, up from $2.3 billion.

Chairman and CEO José Neves expressed optimism about the future, highlighting the company’s growth, improved efficiency, and execution of strategic priorities. He also mentioned that Farfetch has taken measures to adapt to the macro environment of the past 18 months. Neves expects 2023 to be a strong year for the company, with significant GMV growth, improved profitability, and positive free cash flow.

CFO Elliot Jordan echoed Neves’ sentiments and emphasized the company’s progress towards achieving profitable growth and positive free cash flow in 2023. Jordan highlighted the strong performance of the digital platform, which has returned to growth while maintaining a stable order contribution margin. He also mentioned significant cost savings across all areas of the business, contributing to increased profitability compared to the previous year. With a lower cost base and strong liquidity, Farfetch is well-positioned for faster growth in the second half of the year.

Overall, Farfetch’s Q2 results demonstrate a combination of growth and challenges. While there were positive developments in important areas such as digital platform performance and active consumer growth, the decline in revenue and net loss point to areas for improvement. With its strategic initiatives and adaptability to the changing macro environment, Farfetch aims to achieve stronger growth and profitability in the future.

Useful links:
– [Farfetch Official Website](https://www.farfetch.com/)
– [Farfetch Q2 2023 Earnings Report](https://www.farfetchinvestors.com/news-and-events/hubs/landing-pages/q2-2023-landing-page?utm_source=referral&utm_medium=advertising&utm_campaign=earningsq2)