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Farfetch Ltd Class A FTCH

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Farfetch's Revenue and Profits Below Own Guidance as Growth Moderates, Cuts Outlook; Shares Rich

Jelena Sokolova, CFA Senior Equity Analyst

Analyst Note

| Jelena Sokolova, CFA |

We don’t expect to significantly alter our fair value estimate for Farfetch as the company reported third-quarter results below its guidance. Digital platform gross merchandize value, or GMV, growth came in at 23% versus company guidance for a 30% increase; brand platform GMV was up by 47% slightly ahead of 45% guidance. Adjusted EBITDA came in at $5.3 million, short of $10 million guidance. While growing revenue continued to scale positively against operating costs, leading to profitability, gross margin declined year on year from 47.8% to 43.3%.

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Company Profile

Business Description

Farfetch is an online platform connecting sellers and buyers of personal luxury goods. It was founded in 2008. The company partners with over 1,000 luxury goods sellers to offer their inventory on the platform. When making the retailers' stock available to almost a million active customers, the company charges a cut of around 30% (third-party take rate). Geographically, Europe, the Middle East, and Africa account for 37% of the company’s sales, the Asia-Pacific 36%, and the Americas 27%. The company operates digital marketplace platform Farfetch, Browns stores and acquired branded company New Guard Group.

Contact
The Bower, 211 Old Street
London, EC1V 9NR, United Kingdom
T +44 2075495400
Sector Consumer Cyclical
Industry Internet Retail
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 5,441