Farfetch Ltd (NYSE: FTCH) stock rose 7.34% on September 11th, 2019 and continued to be bullish rising over 0.6% on 12th September, 2019 (as of 9:57 am GMT-4; Source: Google finance).
Yahoo Japan Corp said it will take over Japan’s biggest online fashion retailer Zozo Inc for 400 billion yen ($3.7 billion), seeking to breathe fresh life into the business and compete better against the likes of Amazon.com . The deal offers Yahoo Japan a chance to take the lead in Japan’s 1.8 trillion yen online fashion space where Amazon and Rakuten Inc have struggled to make headway, and where Zozo’s mall Zozotown controls around 50% of the market for mid- to high-end fashion.
On the other hand, FTCH’s revenue had grown by $62.6 million year-over-year from $146.7 million in second quarter 2018 to $209.3 million in second quarter 2019, representing growth of 42.7%. The increase was primarily driven by 52.8% growth in Platform Services Revenue to $176.5 million. In-Store revenue increased by 33.1% to $4.2 million. The increase in Platform Services Revenue of 52.8% was driven by 44.4% growth in Platform GMV, boosted by growth in first-party GMV which more than doubled year-on-year and which is included in Platform Services Revenue at 100% of the GMV. Gross Merchandise Value (“GMV”) increased by $149.9 million from $338.5 million in second quarter 2018 to $488.5 million in second quarter 2019, representing year-over-year growth of 44.3%. Platform GMV increased by $148.9 million from $335.4 million in second quarter 2018 to $484.3 million in second quarter 2019, representing year-over-year growth of 44.4%.
Moreover, the loss after tax increased by $71.9 million, or 406.9% year-over-year, in second quarter 2019 to $89.6 million. This was largely driven by a year-over-year increase in the operating loss from $36.8 million to $95.8 million partially offset by a decrease in unrealized foreign exchange losses on revaluation of non-United States Dollar denominated receivables and payables. Adjusted EBITDA loss increased by $12.2 million, or 47.8%, year-over-year in second quarter 2019, to $37.6 million. Adjusted EBITDA Margin improved from (21.4)% to (20.8)% over the same period.
For the third quarter 2019, the company expects Platform GMV growth to be of 30% to 35% year-over-year. Third quarter Adjusted EBITDA Loss Margin to be of approximately (18)% to (20)% of Adjusted Revenue
For full year 2019, the company expects GMV to be of approximately $2.10 billion, representing approximately 50% year-over-year growth. Platform GMV to be in the range of $1.91 to $1.95 billion, representing approximately 37-40% year-over-year growth. Adjusted EBITDA Loss to be of $(135) to $(145) million, representing Adjusted EBITDA Loss Margin of approximately (15)% to (17)% of Adjusted Revenue