Farfetch climbs on narrower loss in fourth quarter, first positive annual EBITDA
By Dhirendra Tripathi
Investing.com – Farfetch (NYSE:) stock soared 38% on Friday after the company posted a much smaller-than-expected quarterly loss, benefiting from increased luxury buying as restrictions eased and that people tried to please themselves.
It was also the first full year of earnings before interest, tax, depreciation and amortization on an adjusted basis for the luxury online retailer.
The rally helped recoup some of the stock’s losses, which have fallen more than 77% in the past year.
The online luxury boutique market posted a quarterly loss of 3 cents per share as analysts estimated it would report a 25 cent loss per share.
Farfetch said it ended 2021 with higher market share.
Quarterly gross merchandise value jumped 22% year-on-year to $1.28 billion. The GMV digital platform was $1.14 billion in the quarter. The company expects this to increase by 28% to 32% over the course of the year.
GMV defines the total value of goods and services sold on an online platform.
Transactions with third parties generated 85% of the digital platform’s GMV.
Adjusted revenue increased 23% to $571 million in the quarter.
The company also expanded its media solutions business and partnered with more brands to attract more visitors to its online platform. This included the Balmain X Netflix (NASDAQ:) collaboration coinciding with the release of “The Harder They Fall” movie.
The company is targeting an adjusted EBITDA margin of 1% to 2% for the year.