Farfetch stock bounces on mixed results
Online fashion platform Farfetch saw its share price rocket up then back down again sharply as it released results this week. The reason for that spike was the mixed nature of the results in question. No one expected it to be a profitable quarter for the stock, but earnings still came in lower than analysts had hoped – meanwhile, the company beat on both the amount of business it did and how much revenue it bought in. The result? Profoundly conflicted investors.
Farfetch’s share price bounced on the back of results, but is still up 26% year to date
Source: Yahoo Finance
Farfetch was expected to lose 16 cents per share for the quarter just gone – in fact, earnings came in at negative 22 cents per share. However, the company saw a higher-than-3expected gross merchandise volume move through its platform ($419 million against the Street’s predictions of $407 million) as well as higher revenue (consensus estimates were for revenues of $171.1 million – the actual figure came in at $174.1 million).
The company’s founder, CEO, and co-chair, Jose Neves, said: “Farfetch enjoyed excellent growth in first quarter 2019, with Platform GMV rising 44% to $415 million, or approximately 50% growth on a constant currency basis. This outpaced both our expectations and, by some distance, growth in the online personal luxury goods sector as we continued to gain market share.
In addition to strong operational execution, we reached some important strategic milestones that position us for continued strong growth in 2020 and beyond. This included launching the Augmented Retail pilot in Chanel’s new Paris flagship boutique at 19 Rue Cambon. We are also thrilled to be entering the sneaker resale market, and launching Farfetch on JD.com’s platform through our recent acquisitions of Stadium Goods and Toplife, both of which are on pace to be operationally integrated ahead of schedule.
Overall, we are very well-positioned to continue capturing share of the significant opportunity in the online personal luxury goods market.”
Dominion holds Farfetch in its Global Trends Luxury Fund.
If you would you like to receive the Newsfeeds daily, please click here to sign up now!Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
- Click here to print this story: Print
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.