What happened
Shares of Farfetch (FTCH 3.33%) were moving higher today after the luxury fashion e-commerce marketplace posted better-than-expected results in its first-quarter earnings report, showing the stock is starting to make a recovery after crashing during much of 2021 and 2022.
As of 12:39 p.m. ET on Friday, the stock was up 20.1%.
So what
After a surge in demand during the pandemic, Farfetch's growth slowed significantly last year. But revenue began to reaccelerate in the first quarter this year with the top line growing 8%, or 12% in constant-currency terms, to $556.4 million, which easily beat estimates at $512.7 million.
Gross merchandise value (GMV), or the total value of goods sold on the platform, was up just 0.1%, or 4% in constant-currency terms, to $931.7 million. Brand platform GMV, which reflects the brands it owns, increased 10%, while its digital marketplace GMV fell 1%.
On the bottom line, its loss based on adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved slightly to $34.7 million, and its adjusted loss per share narrowed from $0.24 to $0.16, which also topped the analyst consensus for a loss of $0.42.
CEO José Neves said, "Our sequential improvement in GMV growth in the U.S. and China, our two largest markets, as well as in orders across the Farfetch Marketplace, indicate the strength and resilience of our core business."
Now what
Farfetch's guidance also indicated a continuing rebound as it sees full-year GMV of $4.9 billion, up 16% from a year ago, and an adjusted EBITDA margin of 1% to 3%.
Both of those forecasts show the momentum in the business is continuing to build. And with the stock still down more than 90% from its peak, any improvement in the business is going to give it a lift.
