Farfetch stock price was cut nearly in half on Friday: explore why

August 18, 2023 06:43 AM PDT | By Invezz

Farfetch stock price was cut nearly in half on Friday: explore why — Image source: Invezz

Farfetch stock tanks on lowered guidance

The stock is being punished this morning also because the luxury fashion company trimmed its guidance for the value of orders processed.

Farfetch now forecasts $4.4 billion in gross merchandise value this year versus $4.9 billion it had guided for earlier. Still, its CEO Jose Neves said in a press release today:

Farfetch is growing, becoming more efficient, and executing on our key strategic priorities. We have also taken decisive action to adapt to the macro environment of the last 18 months.

Farfetch stock is now down close to 65% versus its year-to-date high in early February.

Notable figures in Farfetch Q2 earnings release

Lost $281 million versus the year ago $68 million
Per-share loss also climbed from 50 cents to 68 cents
Adjusted loss printed at 21 cents on a per-share basis
Revenue declined just over 1.0% to $572 million
Consensus was 28 cents loss on $650 million revenue

Despite Q2 weakness, the management expects to turn positive in terms of free cash flow this year, as per the earnings press release. Still, KeyBanc analysts downgraded Farfetch stock today to “sector weight” citing:

Decreased confidence in execution and the timeline to profitability. Though we view cost rationalisation initiatives positively, reduced guidance implies fairly tough 2H hurdle given softer trends.

The post Farfetch stock price was cut nearly in half on Friday: explore why appeared first on Invezz.

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