What happened
Shares of Farfetch (NYSE: FTCH) surged 26% on Friday after the luxury fashion platform reported second-quarter financial results that were better than many investors expected.
So what
Farfetch's revenue rose 10.7% year over year to $579.3 million. Excluding the negative impact of foreign exchange fluctuations, the e-commerce company's sales jumped 20.7%.
That topped Wall Street's forecast. Analysts had projected revenue of $561.1 million.
"We are navigating a volatile macro environment adeptly, continuing to post growth compounding on what has been a tremendous 3-year run for Farfetch, a period that saw our business double as measured by our GMV," founder and CEO Neves said in a press release.
GMV, or gross merchandise volume, is the total dollar value of sales facilitated by Farfetch's platform. Its GMV inched up 1.3% in the second quarter -- and 7.6% at constant currency rates -- to $1 billion.
Farfetch's digital platform GMV growth was dented by the suspension of operations in Russia and coronavirus-related closures in China. Yet its brand platform GMV climbed 47.3%, as New Guards brands' Autumn-Winter 2022 collections proved popular among shoppers.
Still, Farfetch generated an operating loss of $167.6 million, as the company's growth investments weighed on its profitability. However, its adjusted loss per share of $0.21 was better than the $0.30 per-share loss analysts expected.
Now what
Farfetch wants to be the leading e-commerce destination for luxury fashion. On Wednesday, it announced its plans to purchase a 47.5% stake in rival online fashion retailer Yoox Net-a-Porter. The deal is designed to strengthen Farfetch's position within the high-end retail market and boost its ability to fend off intensifying competition from the likes of Amazon.com.
"At Farfetch our mission is to be THE Global Platform for Luxury," Neves said. "This week we celebrated a major step toward that mission."
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