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Farfetch Limited has announced its preliminary financial results for the first quarter ended March 31, 2020. The luxury ecommerce giant has said it expects a strong general merchandise value (GMV) growth, supported by the performance of the China region, which has continued to grow faster than the rest of the world.
Since February 1, 2020, growth has accelerated in China compared to the same period in 2019 in the region, Farfetch said in a statement released yesterday. The company plans to generate adjusted EBITDA profitability for 2021 as planned.
Commenting on activity in the first quarter, José Neves, founder, CEO and co-president of Farfetch, said: “We have continued to focus on executing on our strategic and financial objectives. We launched our #SupportBoutiques initiative to harness the power of our community to meaningfully help the hundreds of boutiques across our seller base, the majority of which are small businesses. With current retail store closures, travel restrictions, and shifting consumer preference and shopping habits, I expect to see an acceleration of this secular shift to online. We believe our preliminary first quarter 2020 results reflect the strength of our business model in a changing environment.”
Farfetch expects to deliver Q1 results in line with expectations
The company expects digital platform order contribution margin to be in line with fourth quarter 2019, and exceed its targeted minimum of 30 percent.
In addition, the digital platform is also expected to deliver a GMV of around $ 105 million, in line with expectations.
Farfetch expects negative adjusted EBITDA of $ 21 million to $ 25 million and a year-over-year improvement in absolute amount.
Towards the end of the quarter, the company added that it had seen a slowdown in growth in its most important markets in Europe and North America, while various countries continued to implement containment policies.
The company estimates that the current environment will accelerate sales on online channels which will return to normalized levels of activity in 2021. In terms of liquidity, Farfetch plans to end the first quarter of 2020 with cash and cash equivalents about 420 million dollars.
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Featured photo: © Courtesy of Farfetch[/vc_column_text][/vc_column][/vc_row]
