Farfetch sees revenue and profit drop in Q2
Farfetch has reported drop in revenue for the second quarter ending 30 June 2023, despite a rise in active consumers.
The company's revenue decreased £5.7 million ($7.3 million) year-on-year to £449 million ($572.1 million).
This was driven by a 42.2% decline in brand platform revenue and 15.1% drop in in-store revenue, partially offset by a 10.5% rise in digital platform revenue.
Gross profit was down to £190 million ($242 million) and gross profit margin totalled 42.5% against 46.2% the previous year, driven by the decline in Farfetch's digital platform division.
However, supply from multi-brand retailers and e-concession partners increased over 40% year-on-year to nearly 17 million total stock units.
Farfetch also saw active consumers grow to 4.1 million, supported by a higher mix of personalised communications demonstrating higher conversion.
Looking ahead, the company expects revenue of approximately £1.9 billion ($2.5 billion) for FY23 against £1.8 billion ($2.3 billion) in 2022.
Elliot Jordan, CFO at Farfetch, said: "I’m pleased with our second quarter performance, which demonstrates our progress towards delivering profitable growth and positive free cash flow in 2023.
"Our Digital Platform has performed particularly well, returning to growth while maintaining a stable order contribution margin. This, coupled with significant savings in the cost base across all areas of the business, means our digital platform is more profitable than last year.
"We enter the second half well positioned to achieve faster levels of growth, with a lower cost base and strong liquidity."
The trading update follows the recent shutter of Farfetch's beauty division, following its entry into the category last year.
The online retailer entered the beauty category in April 2022, welcoming over 100 brands across makeup, skincare, haircare, fragrance and grooming.