Farfetch shares rise 15% after tumultuous week of results
Luxury e-commerce retailer Farfetch saw shares rise 15 per cent during extended trading on Thursday, after its third quarter results quelled investor concerns.
Shares in the luxury fashion platform were hit earlier this week when a research note from Bernstein warned Farfetch “burns cash too fast”.
The note went on to detail how Farfetch is “no Uber of luxury goods distribution: most of the luxury goods brands worth their salt already have limousines of their own.”
Founded by Jose Neves in 2007, Farfetch sells luxury fashion and clothing by acting as a technology platform which takes a commission from designers’ sales.
Despite floating at $6.2 billion in New York last year, shares have slumped by more than half amid scepticism over the company’s future.
“The more we look at it… the more this feels like the task of redesigning a malfunctioning aircraft while you are flying on it: there is very little time and margin for error,” said Bernstein analyst Luca Solca.
What’s more, Farfetch is yet to turn a profit and is now facing legal action over whether it misled investors with overly ambitious claims when it was listed.
Thursdays’s third quarter report managed to put some investors at ease.
Farfetch reported a loss of $85.5 million, compared with a loss of $77.2 million for the same time a year before.
Revenue rose to $255.5 million from $134.5 million for the year before in the three months to September 30.
For the final quarter, Farfetch said it expects a loss between $21 million and $31 million.
“I am very pleased with our continued progress in building the global platform for luxury. We had a fantastic Q3, beating all our expectations, and continuing to capture market share at a rapid pace,” said Neves.
“We had a fantastic Q3, beating all our expectations, and continuing to capture market share at a rapid pace,” he added.
Later on Thursday shares rose 15 per cent on the back of the announcement.