What happened
Shares of Farfetch Limited (FTCH -1.03%), a luxury fashion e-commerce platform, spiked today after the company reported a better-than-expected loss in the first quarter.
Farfetch's stock skyrocketed by 30.1% as of 1:59 p.m. ET.
So what
Farfetch reported an adjusted loss per share of $0.24 in the first quarter, which was down from a loss of $0.22 per share in the year-ago quarter but ahead of analysts' average estimate of a loss of $0.28 per share.
Image source: Getty Images.
The company reported first-quarter sales of $514.8 million, up 6% from the year-ago quarter but below Wall Street's consensus estimate of $560.3 million.
"Our core business remains very strong, in spite of the macro events in China and ceasing operations in Russia, which impacted our performance and outlook," José Neves, Farfetch's founder and CEO, said in a press release.
Investors didn't seem to mind the revenue miss, though. Instead, they focused their attention on the company posting a better-than-expected loss.
Now what
Even with Farfetch's massive share price jump today, its stock is still down 72% over the past six months.
That drop comes as investors have grown increasingly worried that aggressive interest rate hikes by the Federal Reserve, aimed at reducing inflation, could end up slowing down the economy too much.
Retail stocks could be pinched further if companies have to contend with a potential recession in addition to high inflation and rising material costs. All of which means that Farfetch shareholders should continue to keep a close eye on how the company's management responds to the shifting economic environment.
