Farfetch Limited reported gross merchandise value (GMV) increase of 317.1 million dollars to 1,057 million dollars in fourth quarter 2020, representing year-over-year growth of 42.8 percent. The company said in a statement that digital platform GMV increased by 310.8 million dollars to 939.4 million dollars in the fourth quarter, representing growth of 49.4 percent. The company’s revenue increased by 157.9 million dollars to 540.1 million dollars, representing growth of 41.3 percent. The company’s loss after tax increased by 2,170.9 million dollars year-over-year to 2,281 million dollars, while adjusted EBITDA improved by 28.3 million dollars to 10.4 million dollars and adjusted EBITDA margin improved from negative 5.3 percent to 2.2 percent.
Commenting on the trading update, José Neves, Farfetch Founder, Chairman and CEO said: “2020 put the Farfetch platform to the test, but thanks to our robust capabilities, resilient operations and utmost perseverance from our more than 5,000 Farfetchers, we rose to the challenge and enabled our nearly 1,400 Marketplace sellers and Farfetch Platform Solutions clients to continually serve millions of luxury consumers across the globe.”
Review of Farfetch’s financial performance
The company added that the revenue increase was driven by 56 percent growth in digital platform revenue to 422.6 million dollars. Brand platform revenue increased by 2.3 percent. The increase in digital platform services revenue of 53.4 percent was driven by 49.4 percent overall growth in digital platform GMV, which had an increased mix of digital platform services first-party GMV.
The company further said that digital platform services first-party revenue increased 96.1 percent year-over-year to 138 million dollars, driven by a strategic focus on increasing New Guards’ direct-to-consumer distribution since acquiring the business in August 2019. Growth in Browns digital sales, primarily driven by higher sell-through of full-price products also contributed to this increase.
In the fourth quarter, digital platform fulfilment revenue increased 69.1 percent, while in-store revenue increased by 39.6 percent to 13.7 million dollars and was primarily driven by the opening of New Guards stores throughout the year, partially offset by store closures and reduced foot traffic across our retail store network as a result of Covid-19 restrictions.
Gross profit increased by 73 million dollars or 41.5 percent in line with revenue growth to 249.1 million dollars in the fourth quarter of 2020. As a result, gross profit margin remained stable at 46.1 percent.
Farfetch expects 2021 GMV growth of 30 to 35 percent
For the full year 2021, Farfetch expects digital platform GMV of 3.6 billion dollars to 3.7 billion dollars, representing growth of 30 percent to 35 percent, adjusted EBITDA margin of 1 percent to 2 percent. For the first quarter, the company expects digital platform GMV of 740 million dollars to 770 million dollars, representing growth of 50 percent to 55 percent, brand platform GMV of 95 million dollars to 105 million dollars and adjusted EBITDA of negative 19 million dollars to negative 21 million dollars.