FTCH - Earnings call transcript Q3 2021

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Operator

Good afternoon. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Farfetch Third Quarter 2021 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. like of the Investor now Alice over I’d VP Ryder, Relations. Instructions] to call turn to [Operator Ms. Ryder, you may begin your conference.

Alice Ryder

Hello. third And quarter XXXX conference Farfetch’s welcome call. to

Joining Officer. our Chief José Officer; and results and me our Executive Financial discuss Chief Phair, Founder, Customer Chief Jordan, our Chairman are Elliot Officer; Stephanie today to Neves; our

forward-looking materially today forward-looking statements. and Actual Before we to made like forward-looking include would statements indicated remind you the could obligation revise only will expectations differ from publicly speak begin, we that those in them. our We update or to discussions of as today results to undertake statements, our no today.

Factors of actual Form XX-F section that some discussion on important the filed could with a the results risk X, please cause differ, SEC XXXX. factors Risk of For to March our of the see

financial In not call. addition, measures on reported in to will this refer with IFRS we certain accordance

non-IFRS our the IFRS reconciliations now the financial I'd farfetchinvestors.com. You to of And both presentation, like our slide press can earnings available website of which at turn to call these Jose. find over on measures the are in release to measures financial and

José Neves

Group we're planning XXXX. a of unit, Luxury some date QX. business quick stronger initiatives cover Digital our today. in and growth the you extended a share market exciting of to up Alice, capture I our QX, Platform market as including you, has from a GMV the how for to e-tailers, demonstrate joining to continuing We in In No with strategic significant trends stack tremendous our call, On XX% results Platform reported us you XX% rate QX, QX. QX. for of delivering seeing growth. aggressive give developments our Retail share And X-year on also our XX% company, record are target. all GMV I year-on-year. navigated will QX Thank the fast XX% increased review year-on-year an we're provide than our this XX% fashion vision will we CAGR New in Digital QX finally, and quarter, GMV FPS such for over accelerated faster of in dynamics overview thank and capture. Starting Farfetch and well share touch luxury we with track as at-scale at the

words, Autumn-Winter we than demand expected shift levels from macro growth fell the short The as search QX comps higher shifted shown this to of at what to at with forecast our of later While XX% through of a seen the QX. had our signs growth recovery year-on-year with IDFA, in then price indicates we September. in reality to saw high as 'XX very In of Autumn-Winter it's what At Google strong products season. impact of level, in into to has first predict quarter in price and combined full-price but explosive since still unprecedented of the forecast market what unrivaled, the our had slower results shifted which extraordinary QX. industry-wide, price growth was lower October. we luxury September, QX, start high costs full resulting demand, year-on-year was for through growth hyper than QX the against exiting sales is, we Trends the were The 'XX both the the environment. as month rate our quarter. the very hyper levels of growth in In other had hard part exiting growth had we growth QX, In profitability part was full for seen evolution well XX% first to crucial full during what in sales of generation an XXXX the lower sales contributed exiting

XX% have order the and our in this previous profitability we're delighted back of invested how six market QX learn in I'm the strong teams share to to period, to capture. macro to test date, to our that During Through first environment. while weeks levels of navigate And we which continuing QX, Digital share on month this a puts Day to improvements have regular X-year U.S., circa to translates deliver on XX% Overall, XX% in earlier our China Platform this market, growth largest the of event us this strong. track seen Singles in to QX, and stack. growth GMV was

to the CAC meaningful face pressures delivered to improvements. learn use generation to IDFA of our ratios decision our LTV QX how and demand profitable has already adapt and Our other inflation test in over strategies media

And in QX. so contribution seen and on generation percentage have recovery as sales, demand QX, XX% be a in of is to far we a in XX% track order to

Farfetch New more was our Luxury where a and We to developments. Retail strategic have just Moving than FPS some segments, we said marketplace. always key

and Retail And We to expand We believe shopping. unlock a the for potential on global believe build New FPS the are will I modes merger of or experience. the for significant seamless XXXX LNR, luxury be and a where Farfetch. revolutionized mission will of Luxury online this both the platform be offline to call year of going physical is luxury. digitization We by

leveraged many be ways. in can platform Our

Harrods suite Our of product where end-to-end e-commerce solutions, clients. as other FPS count we SaaS current XX over and companies the is flagship luxury

reiterate describes guarantee You and FPS completed. be Maisons of potential will is suite, Richemont, Marketplace. will successfully for as which our both deal read from there this Richemont have their want Maisons adoption joining as any end-to-end well YNAP, no announcement the the to that I

to post has on continue of been enterprise acceleration other the pipeline and these seen conversations, we've the COVID-XX of While an a of we clients, we pandemic stabilizing. now have phase strong discussions that work progressing FPS lockdown

CuriosityChina service clients that in a brands, the luxury Browne and of our we China a year what's me through One, best-in-class expertise including are of solution, win-win with can a The for and into the changes growing achieved brands this are e-concessions, our the this Piguet is launched distribution. which powered we for luxury brands, getting in of to transforms they X incredibly streamline products nearly the to Armani, revolutionary BROWNS Let of retailers e-Concessions launch about team retailers customers retailers and Audemars year-on-year major that among their XX Three, Two, enhanced Gucci and FPS. If product offers technology already has and circa have where the month connected suite XXX work. and luxury and do China a the with CHANEL, e-concessions harrods.com our e-Concession. triple-digits tune launch. allows minimal experience results The this by of excited extraordinary was FPS this brands luxury with Moncler. marketplaces walk they sales you Burberry, from digital truly Cucinelli, retail, presence Brunello milestone Zegna have store. at and Thom for fundamentally as since for our

as to as harrods.com. a Gucci more available Harrods SKUs Xx than previously were result, on As access many has

Looking for reaching companies more retailers TAM like SaaS marketplaces, or booming the status. into broadly, marketplace [Viracle] even is solutions, multibillion-dollar convert brands with which

believe Companies has E] and at-scale in luxury, markets capabilities our China, the of industry. payments in the not in Farfetch general. than area XXX at least, sell, like [Global receive have clients very in and, as business others term, the few in I logistics a this have unique with SaaS of credentials other two And handle believe term. of fashion the offering are and standalone East, stronger for uniquely SaaS compelling crucial dollar luxury. multibillion this only but Middle such, logistics one in standalone a are presence, one with and marketplace as And unrivaled we I out but in Farfetch potential shown module. of solutions my We also And also will alliances a but proposition key view, in very of the large long countries global Russia FPS for FPS and fashion these for sizable the for we that out a building to enable payments here, Latin represent the opportunity box. aim long America, last companies expertise

end-to-end to by way our I opportunity. believe, quicker of for represent, While use FPS. space. year these offering FPS will platform is of luxury sales Watch to expanding multibillion solutions to be There a our be to these modularize company and with which summarize, And day way. to market. of the each our cycles more modules of their us these pivotal very their think TAM of expand is segments X LNR To many of to But in in a the for continue a own. our further, suite, on interested vision for expands are and powerful will of other lot really broaden platform or we the for prospects we the dollar a great future. as FPS vision maintain one this this believe plan also to others allow offer XXXX platform which initiate that we're I XXXX, appeal I new using modules, a our a done, from in potential our this preferring are In

I'd been, our XXXX and we all that to provide As in all believe our impact in the regions. next how what fact, powerful strategic the the stronger am expected our marketplace. long-term X than To recent marketplace. I envisioning highlight of were of and a we've hardest key close terms X I'd of particular deliver like start, business initiatives the dynamics focused like also importance kick bets year, of history to with off areas for will preview the XXXX longer-term exit years of to to to are XXXX of in incredibly we And now for XXXX, of are luxury, we approach in the I on and ever year.

exciting First, you on to consumers. a crossover on this with present our Stephanie update partners will proposition next year luxury beauty to track launch further initiative. is compelling for

investing to range business QX, be further media the behind from market. with we team years. we to wide building in solutions over brand advertising and meaningful Prada solutions X another to quarter opportunity a to our Margiela a beauty new ad X develop partners will others. next record advertising beauty Second, Armani, enter Balenciaga, among the out enormous to for working see posted Also, of campaigns many brands with Media tech our in

reducing our over I now Stephanie and brand our with U.S., we volume years. This XXXX, will region. let on EU down be our a distribution costs the to centers fulfillment update customer. things, in in factor few boosting and all double and the long-term we ship Farfetch you by from initiatives will in on next will many major logistics Third, boost China the order contribution

Stephanie Phair

José. Thank you,

of resilience our industry-leading Our backdrop market ability X-year to in shifting continue QX business. to and a against the demonstrates deliver growth strength

areas share delighted the take key me to the building continued million. demand base, third, Customers customers. that of our in QX on our generation demand strength we in and you has brand high-quality Let to joining growth side: exhibited grow consumers QX have, growing our spend and XX% through high-quality customer active efforts. our per Crucially, X I'm First, higher focus year-over-year of continuing QX; since XXXX strategy this secondly, on customers; to average, delivered X.X continued customer. our

of addition, price retention and the upgrading around personalization. This customers XXXX, focus on full and been tracking marketing In faster targeted sales, ahead customer than our tiers their benefits ACCESS is of predecessors. have new demonstrates efforts

Fashion in GMV from exceeding We growth And tier, October, year-on-year performance has differentiated the highest for demonstrates our strong QX. year-on-year The our customer On number sale. QX. benefits new transaction, valuable are customer highly most a of This demand marketplace transactions ever quadrupled momentum $XXX,XXX whose in our a generation. coveted in also approach private with setting our our outpaced million $X.X the seeing supported Concierge clients, to these serving team record of a strong customers.

order our strong gives IDFA learn new in and to our this made strategic to LTV environment. QX, growth CAC we in confidence demand acquisition with spend when and customer decision payback coupled of exiting quarter the to navigate back us test which to ratio, expectations the our invest to in the how appropriate, headroom generation On X-months flex

which Our planned of for investing QX for in number due inflation, demand magnified percentage bidding then generation, PPC of channels, to funnel than in conversion lower-than-expected lower as revenue, was IDFA; additionally, marketing sales, further to capabilities, our to customers by declined longer rate period. a X likely continue strategic a an have higher participants on made full-price September payback main and when initially greater-than-expected was factors: we due the increased mid-funnel most decision behind which

By measures. share improved is are generation learning already testing already Digital we of combination our focusing broadening on up a and demand to the through funnel, seeing and of revenue. am Platform generating marketing delighted period percentage that as in this results I personalization lower Importantly, of level of QX, mix, a funnel moving an Services

on a us offers key Moving Building brand. to brand X strong benefits. the

First, navigate through data where value changing rigor drive as to channels. performance these brand fast through applying as we resources continue this the continue we expertise have will to into gained as we environment, investment our well are marketing

partnerships we an as a luxury connection it our for collections more over turn, are which in work relevant media to invest it And and, emotional business affect in light with our and and in to Second, IDFA privacy mid- stories plan on important This traction term. XXXX in their more longer and in partner key solutions, recent products consumers, much this greater media value in us with available our further inventory believe customers. even is brands drives third, offering significantly on for enable and making products them comes we of as launching the and the to well. ever, audiences it channels. on brands offers than compelling in efficiency strong our builds that provisions first-party growth all to brand data high-margin strengthens time solutions placing stronger when of target capabilities expand and potential, our Based helping them

care building exciting and space, of on brands to this makeup that capabilities excited ramp as on the fact carry skin conversations we technology we by for both are continue the and the Finally, large our will and we offer in beauty, up mix indie opportunity.

As you fashion, performance. unrivaled through fashion have an innovation Farfetch let to that, intend appeal with me consumer the Only to in way. to Elliot in in and over way, a On very our between mentioned beauty generating storytelling we financial we past, take enter compelling beauty excitement with proposition, hand an lovers to And through to

Elliot Jordan

Thank have QX The quarter-to-date, Platform have by you, ahead demonstrating particular, in million. Digital XXXX, the which of compound within and our share a and I'd bought QX $XXX longer-term GMV order grew at year-on-year XXXX. X-year capture. recent seen XX% QX in level year-on-year, with touch last with cost margin quarter on XX%, the The accelerated target to of significant performance drivers rate QX XXXX. the strategies growth take over and Starting Stephanie, the already substantially in XX factors just to margin to Platform third contribution in a was to impacting XXX% X-year like also year-on-year and we quarter and GMV, on $X annual and adjusted key XX% billion. that contribution billion. for loss Digital the the record through our basis equates which I'll hello, XX% third GMV to to GMV strong growth financial market a quarter over profitability months to you of of operating our This everyone. $X EBITDA strong significant order growth XX% our revenue, and in leverage from grew QX compared above of a start the

in came Platform part Our versus XX% original, achieved growth grew season year-over-year price growth which products, Digital demand due in to guidance GMV our year-on-year full in collection new and below Guards first-party and GMV. lower-than-expected across Autumn-Winter XX% for QX, because XX% for business, September. ‘XX brand first-party Browns in was we at a circa due strong growth includes third-party XX% New demand to

Palm brand, to growth as to Off-White million the great continued brand have to strong season Platform, due year-on-year well appeal. new to from we its demand Brand Angels range products the very high as as products for Within demand for the $XXX GMV XX% in product continues broaden achieved

grown into In to QX addition, QX stretched year Platform with last delivery we Brand Year-to-date, have XX% compressed deliveries QX. has window the Autumn-Winter year-on-year. the 'XX compared across and this year

Angels Group contribution Miami, on its basis of channels see Platform grew operated in XX% X-year by in grew $XX the openings full media of year-over-year year-over-year Armani, across us a to of Digital Prada, or New Florida. Farfetch our on pleased total strong million, thanks GMV revenues third-party XXX% the This accelerate including in-store enabled Guards XXX% including strong our a year-on-year others. rate on at and make has for brands, a revenue directly XX% basis. by XX% The Platform, a overall for profitability. to all this the many to Palm range brands, I'm campaigns wide and to level XX.X%. grew of store Finally, solutions meaningful revenue in and business store from the new XXX% first Group growth Adjusted quarter in to growth growth take brand, now driven to control Brand revenue a Balenciaga of highest revenue among the a and achieve GMV first-party with X-year

Turning our XX% year-on-year Digital cost compared XXXX. to to factors: The in GMV high over relation continued in compared of is in global to and QX have QX XX% X XX% margin, primarily grew increased to which Digital was the Platform. Platform duties, movement inflation we which XX% to contribution order to year-on-year, see growth attributed shipping First,

put some growth, the absorbing for gross costs. is This of in by The which inflation. the first continued increase by revenue consumers this Platform. margins cost reduces the evidenced have was We XX% Digital difference to associated below fulfillment

to the this impact demand Platform engine stepped the in inflation including where a XX% to a factors period. pleased percentage various Secondly, are mid-funnel from to QX from longer XX.X% last margin, search to XX% successfully a balancing number markdown to of margins And sales expense of that as demand gross increasing and particular, XX.X% XXXX. is of outlined within first-party across year. generation year IDFA, report actions we percentage activity XX% digital has third, between change, marketing expected revenue which payback Digital generation Stephanie QX. in teams business Services up In Platform within declined improve engagement to marketing the has contributing of be this XX% our cost order contribution to expense, have with taken reduced channels I'm as which of cost channels. use

near of our no duties is revised these that shipping, increased quarters at charging processing. in reversing or strategy the have clear It all. multiple indications for and costs have We over payment with term

As by sharing closely practices the to with full increases on such, operators be these more and full year XXXX. order with of begun The have changes align of in other platform. will for our felt the we contribution margin consumers sellers these effect

QX, to leverage. substantial we relation cost have in Finally, operating achieved

of would you of carefully the driven XXXX. As by revenue and The cost within investments to technology are operations, XX% in improvement with environment. expect, particularly adjusted current scale being to is totaled we G&A reversal the of related the extremely stronger year-to-date costs, and managing platform cost minimal Also the date the in drive XX% growth in expenses leverage customer the compared executive and accrued incremental platform bonuses. a services technology. to our of base of QX partial to areas is This operating

Alibaba relation an We the million $X.X with venture. strong the aggregate to of billion following in joint also liquidity quarter from the China receipt of closed of Farfetch formation and the Richemont $XXX

we a I'm Day sales. positions the deliver contributing Pavilion quarter. fourth to last critical started for store on China full is trade year-to-date record-breaking as year was through our that to $XX Tmall's QX Luxury our report and year, and pleased of which app million well. to EBITDA, us has with ahead And both stronger profitability planned, positive success well EBITDA, as Our the Singles

price X by seen growth first full of also 'XX improvements market demand the U.S. regular QX, weeks through driven consumer the We in Autumn-Winter have collections. for

and levels We stock be centered in stock a enter expect China. with QX with fourth consumer weeks overall on week is across of heavily marketplace, the growth X offering all Autumn-Winter GMV of Black trading SKU the depth GMV above 'XX from XX% $X.X growth worth week of to to this lines start critical to value still holiday the expected contribution of our grow In season. quarter stock Platform Brand XX% circa trading then is particular, to of XX% expect in are editorial. the million. XX% year-on-year, period product be brand QX and XX% to season Average would margin selling have XX% dependent we our to EBITDA expect campaigns X-year represent as of finally, us. at more ever biggest which partners offering ahead strong of for We expect and the which we XX% platform up 'XX year-on-year XX% between XX%. deliver for back XX XX%. next QX. year-on-year, Digital high has achieve consideration, XX% circa noting KOL digital we QX. into next the the Platform between year-on-year on up to quarter-to-date, is around with positive holiday to Friday holiday the Mainland that It's adjusted our means top of billion to $XX Taking key increased order much And we margin

impact we performance XXXX the set margin X% to adjusted in margins our Union. $X XXXX this dollar as original target cost shipping the to the of impact the Platform year expect ourselves. full and pressures longer-term Digital prolonged EBITDA platform guidance taxes, year X% the year around million. to of to be and of is to for is such due withdrawal a Full This multimillion GMV due from unprecedented growth to below within ahead the full UK's initial We services target result digital expected European

help providing mitigate the contribution next call our a the forward at long-term profitability will guidance be at early and order year. expected moving the Brexit you in with XXXX José? level, GMV of more at XXXX of XX% XXXX fulfillment sustained the specific UK improved Farfetch QX from target these to growth Our on with look adjusted to EBITDA year of earnings versus volumes I level. forwards. the to growth migration least is by costs Netherlands line

José Neves

global our there navigate market, September, of exciting. sum QX track. To Elliot. shifts strategic XXXX are unchanged Clearly, the we some very you, in but had and Thank up, initiatives our direction since online is on and back period as XX destination largest were this particularly pandemic in luxury fastest-growing COVID-XX where travel to for is restrictions. with brought Crucially, QX store marks X.X closures the consumers million consumers. months global and exit the for brands on travel fashion go, follow. We active

with to increased for has XXX% strong, in thank goes market today. XX period. A XX%, Our listings growth e-concession been has of listening our same huge top started to for tripling first continue brand a holiday since non-NGG initiatives. efforts for year. and platform by season for In more more with these capture at brands partners growth profitability the you long-term than Thank we since least outlook. I'm while very Farfetchers solidifying of over our extreme throughout IPO you confidence. quarter investing XXXX, share looking our X,XXX contributions direct-to-consumer a We resulted all out targeted at XXXX. our will CAGR and with sales I This the higher-margin their which our margins believe QX than positive XXXX and and approach the

be happy questions. to now will We your take

Alice Ryder

you Thank questions. for your

deal for possible might Farfetch? a synergies José, Chen first why you are deal? Oliver What parameters What maybe Richemont-Farfetch for the Cowen today question a options And first Securities. be this more you. question on comes the for highlight The of the evaluating or attractive? less is could from main

José Neves

for I week. won't Oliver, the more we've commentary statement than you, really Thank offer last made questions. the

of Maisons YNAP, Richemont joining Marketplace. will read be is announcement You I no the there deal FPS to describes our that want end-to-end potential suite, successfully well completed. which the any their as as for Richemont, have from and our reiterate Maisons adoption both the will guarantee

we progress to you and when we be. may will front keep in it in negotiations, So as

Alice Ryder

you expected? you what also a Why take this season Stephanie, risk ahead to are previously on? of ahead, on, And changes happened factors in what’s the there the the the focused spending later And start term, if regarding could than you're the the was question, and/or what one, funnel and Near channels please. you are second new September? part IDFA

Stephanie Phair

Yes. Oliver. Thanks that question, for

So factor industry engages marketing Farfetch And it I'll ongoing of is tracking. take the that changing landscape. everyone that this And is the know, and that online as really, in beyond in IDFA retarget has IDFA an to affects using in But piece ability you deal first. specifically first macro not had sort time to impacts customers marketing. the with It third-party the changing changes. We've navigating XX I these worth we've very been that over to landscape. of And years. to continue well believe navigate years’ And changes in we're placed for built expertise and marketing. performance that efficiency, We've data the helps our huge first-party invested a amount make use and drive our engines really of bidding robust can use in data. automation we and

are of for doing these the I'll at marketing. other that's, subject take to bit little what are we to is of IDFA. things some more factors? example, And about approach there And so are specifically, not And IDFA are that it you our asked One broadening broadly, and a mid-funnel that thinking channels about X. significance

building. up many ways, and our been big I've is brand talking about now, of this a the while this chapter own Apple's which with a is very platform those. X exciting example, the seeing marketing for very example, results. for part because, of search moving really expect, as is other, And thinking about But really might Farfetch. you brand notifications, good funnel. push and fits it in growing And I For then one stated, for as was is

what that rigor so Farfetch And combining exciting our brand performance doing it's that has and really again, is built we're because over applying marketing building and our years.

for but it's YouTube, our a with sort We've channel. transactional seen, has not as well example, audiences. also in focusing which about us way one it. much larger storytelling expertise to lookalike It it influencer payback, closer transactions. the been of marketing, part it data doing use for is And a to invested you've really acquiring the and with and our fact done high-quality in think this is new. again we've lot business, so Again, then do customer. And into by a plays but is also that App links of, And on work of lot we're it customer. We've high-quality is a, while. a We're evidenced but a content, our longer allows prospecting that lot piece. app downloads a that content

through us I'm of So we've them, exiting in a pleased all that generation the spend being percent. of really And this. a the of hit recent our the towards IDFA and already pace how team I'm quarter been line very demand of we're of really and factors, back number we're and navigating in more this in learn, end the proud one seeing the quarter. despite with that QX test good

Alice Ryder

Next Maisons expand the Doug take business rate you second XXXX think the in you your in for JPMorgan. bit add long-term about question the a more? talk advertising about advertising the prosperity can then to all recent José, how And much you're time? question, focused is could regulation Anmuth brands whether little recent shifted trends on and in at to investments that outlook about how the to China and comes And has of from GMV due and initiatives. the

José Ferreira

market well about luxury luxury the be the there's China. China, tremendous, In and It goods world, largest second market already world. is market largest largest for the tremendous we Farfetch, bullish Farfetch. as the for our extremely in remain opportunity Yes. second in will a It goods

cities are is pandemic major I there restrictions, means consumption, which think large which to here and X, China. Tier customers. therefore, way of was of to tens as there repatriation Tier X cities. the the travel of millions Tier a a literally in the customers scattered paramount extent, reach in are hundreds of to stay because channels these And online luxury is X, digital I think They're with

Here, Farfetch unique e-commerce a market large very business scale position. at only the has We're the Western unique really capabilities a already. playing in and with luxury

and I opportunity Alibaba We capitalize and think have executing see strength that really with effect. we incredible market, Richemont, we an the alliance to and in on we're that to an have

in than specifically are faster reported I these marketplace. that hypothetical the Mainland at much, position stronger, we have there You such again, tailwinds tailwinds than tremendous And will just grew tailwinds. the secular online the just strong, incredible still noticed very in about China. today, side remain trends that much the But are, luxury that mentioned you've very, I And that an have winds any so China as moment, that your bullish competitive and question we think China are hypothetical. are

tens for very X.X Regarding the I most that have unique have million most have Well across thing. is we things: prime AOV note millions the This territory store the brands. $XXX. high-quality important we is This the thing We of fronts. of unique a visitors important to of luxury media the now multiple have we active audience; audience clients; our of the is solutions first business, X an with north think

universe, most solutions to we're luxurious media So solutions, with launch that's want from advertising beauty number larger there's have there. two, partnerships super one. the media to quarter the opening the do advertising, where opportunity appetite with another in a brands. spend using campaigns, essentially And to right, us. do capsules, obviously, tremendous brands with Number We dollars beauty the and we to for the to brands advertising QX record-breaking us. these already had The

the ad business. will and to expanding investments team and this really drive inventory our the in tech, be the app around across website So really also

the have audience. we So

about also that tremendous the experience can it's of sellers and And exponentially, elevated as be team if to talking to We here, is Stephanie think build, brands. what have well. from it What you think, develop not? a if And as is certainly long business this the line. profitable our because consumer the term, through platform. and enhance extrapolate, almost a build could I it very the a years, an can experience why a develop going obviously we the now to talked inventory need about, appetite similar going is the very, think be at build I you marketplace, giving next curated ad sales. to in sizeable any you short in of endemic on very how we're I'm a X look is and meaningful way. the to X course very flowing you largely segment, But for GMV the advertising bottom We in share I our Amazon, market about if X% of very in term of target the think not scale, their the business at

we because consideration building very So and between that's experience space. into the how we're consumer what balance advertiser it, taking luxury the a the nice offer we're in

Alice Ryder

question Great, head then for The And you the your any Keybanc. the thanks inventory about can or and second is seeing limitations on the Elliot, José. you Ed outbound? and delays, how inbound feel into position not from next QX? do we whether any talk we're question receipts as about both comes of from Fall-Winter holiday, Yruma

Elliot Jordan

Yes. Thanks, Ed, for the question.

inventory it probably XX% And multi-brand of time the earlier level year. is the our first-party towards available between going the QX that more there, majority product from talk actually, into now we break stock at have the than to think hand up to And $X.X way third-party on, e-concession in the platform inventory available value said on to direct customers. I maybe vast that marketplace marketplace on sort partners. from the we've partners that's I And has if direct stock of billion. is through coming now. as sell I on value to of growth same versus the e-concession about got terms and coming highest best the inventory retailers That's last on shifted of start year-on-year

from in the going bit brands. here count, stock a lines the the SKU good key also broad various very a also as well. into of selling terms So of year-on-year it's increased And season that's

key into are buy lot season. of items a get consumers likely we have the those we as to So more holiday

September don't think we as full good a sell. whereas here of significant through necessarily of bit picked through on I sit October, down to We So now wasn't lower for so in -- focused that's there. of delays terms really, stock. much coming in sort there's not saw stock consumers back the to we're winter really demand. any in up campaign, was a us on really maybe terms coming in place quarter-to-date. just That That's September growth with in Clearly, stronger

markdown of for activity the some did first-party the we in In terms quarter. Spring-Summer take inventory,

year-on-year. you a margin have will contributor step So gross contribution overall. That was order margins to the first-party back the lower seen

to close last So first-party year. XX.X% time last gross or XX% margins this QX year, were versus

of So good Fall-Winter. therefore And to on the activity ahead is we good a again, rid very clearance and and focused Spring-Summer markdown stock get enter in place. Browns' very the season

XX% really see primarily That's on by New is Guards' on sheet balance something the stock year-on-year. stock retail driven like hand for up, will partners. the You

So very the deliveries ahead positions to sell. really, quarter for ready and Browns' the good,

the key fantastic really In we're terms it Farfetch And from of as period. now. we customers more warehouse it of of the just just although say towards of product on a our the by for really the product into knock up year, speed as has part trading the warehouse Browns pleased a in throughout the Netherlands actually outbound that to as sort the metrics to the and ramped bit selling slower touch shift lot of sending first first-party getting to terms out strategy, well, get of that. Netherlands I'm was part fulfillment of

the warehouse. across really, to pleased So that really with transition

So QX. to set us for through ideally trade everything is

Alice Ryder

Suisse. isn't your like outlined questions Stephen around Pavilion Sure. top The XXXX Ju your your when Credit key of initiative, efforts seemed set you Luxury next X. comes from of it José, strategic

deprioritized? So that does indicate that it's being

José Neves

already It a meaningful Pavilion a part at It Mainland that is. has China business. already of great said front be start Luxury not all. will We been No, our can The graduate. success.

For that really we example, of X in our app. reaching the saw X, -- that out Singles Tier see don't Tier to we platform, in normally cities that power customers Day,

fulfill the it's and luxury China. for in a So opportunity we China a really audience being our think platform tremendous reach in to wider dream of

But of the take approach app our is sales China. course, a place. multichannel we in majority Of have our where

Retail moving We which we're picked for hours about are evolution of coming channel meaningful have we're other opened. Tmall lab have fact, our course, that Luxury world. if more And business with next doing term. WeChat, initiatives of a -- particularly opportunities, Luxury And It's the right? important on New that's going and -- delighted the channels. terms with of it’s I on up ideas earnings that a store talking had things that be to e-commerce everything that the X to I I as you the guys earnings China marketplace long last them. but media, the in most us, to do time with We social the in think constantly of have But for told we in part we're talking Alibaba. lab, call we've in the as are But around on other It's growing why doing cooperation we as Retail our obviously interesting more really other needle our about will about been business our It's initiatives fast. enabled call, and a elsewhere. medium in be China. I was the the I'd as New and an But announcement. and usual, it's also with is you for to absolutely

Alice Ryder

guidance. is is seems -- which question to being the fourth second for that quarter, at Stephen that's relates implies strongest, the Perfect. And it implying the from Elliot, it historical guidance despite lows. And it you, velocity the transactional seasonally

Stephen are a like to factors bit more whether So that would it's underlying activity understand factors. or just guidance, about little promotional what the other

Elliot Jordan

question. It's great Yes. a

the single-digits. I think year-on-year. the in AOV as QX, you've moved hasn't low substantially It's seen head

So the is growth seeing driving volume we're in that the GMV.

we against with year because look pandemic. a always when the very look that at it's the position. with to to to XX% numbers, growth. we've that's basis, And numbers X-year fast the the like quarter. guided you happy numbers And XX% QX, that I'm phenomenally X-year key If X-year annualizing something are is XX% we on to the last the to at I XX% -- for And X-year again of back think important

of doing key good Black been Luxury ever has top as we've our China will price the America of going the biggest ever, Day actually As that, Tmall's also season, earlier Singles X for Pavilion, on, of for full a week, the pickup into biggest then seen on performance in Singles well. Farfetch, week course, of for a we but trading it store China coming Fall-Winter And weeks the us, North or the I ever the started by as particularly biggest market be X first week over out helped QX. next Friday. said On obviously Day its app the obviously, of

start as September. go as which, key it's trades said, in around December. you the out of mix very slow full over strong I activity see offering, a And So holiday has season will promotional a of how picked underlying these that up events, some price into we QX then

year, seeing, annual of growth from growth, So of ahead be our volume deliver target would XX% rate. X-year we're strong very that annualizing growth last that which a to obviously, longer-term it growth is compound

So very with doing pleased what we QX. for are

Alice Ryder

from Goldman Louise of The next Singlehurst questions Sachs. of set comes

expecting of that The to and slower the first the for get we've past. the What rate is context question confidence discussed about growth are there, the in XX% pace the run in that and QX? building GMV we're blocks our especially

Elliot Jordan

base annual next be growth year, of certainly we fantastic through to ahead and the And the the ahead at we the it's into a expect -- active entered customer of are I we've as XX%. always that And that pandemic look consumers. Louise, already post a in year next we compound think to million move rate of on normalized marketplace, exiting sort suppose, Yes. where see X.X we have pandemic. growth important to the more, I FPS, as year got

through Stephanie able for As of out next coming of side through on, activity we on having sellers and since earlier the retention said marketplace model believe the where of will the rates. that's higher XXXX terms on the obviously play the achieve FPS per pipeline we and in been what dynamics We've consumer the levels strong consumer at value the year better business. out is can to

guidance basis modeling because year next for XX%. of you the I So wouldn't go as XX% I are the ahead on when to you think X-year take it’s actually, the a QX of midpoint

very can we move next for as year we XX% we're forward. So deliver confident that

Alice Ryder

Louise from for question you, follow-up a then Elliot. And

positive bit and pressures. EBITDA, In the guidance contribution $X that a XXXX there Is it's given the a under-invest adjusted elsewhere? a million of may -- year for we're of inflationary level of modest, full risk terms we higher aiming facing

Elliot Jordan

is Look, of the year. to focused now beyond adjusted for up lies the priority I business, and primary investing costs. the date already little achieving to leverage between that opportunity a term guidance and full key for year think goal ahead opposed always as of previous operating of that the a The this the estimated delivering but not this back for the we've based GMV see long weeks. level going trade for to quarter adjusted us. for us, fact order X% profitability the sort next But on balance we've year to had the last by profitability down of X% believe year, right cost teams in continued only focus The And contribution the XX% revenue. that above to that longer at not million and unprecedented to on to seen. we course, cost the and handful but the strong QX, And into incremental trajectory us. growth operating are we're we that's on it's year-on-year And we is the throughout pressure pressure stepped We is than for we really with XX% quarter, that the on thought over of that XX% $X now be as put us. head

continue you we line. the of year full to invest. and continue within little but the profitability achieve incremental saw can course, as technology particularly We Of $X operating million to cost, invest

balance right. just the we've So got

Alice Ryder

I Geoffroy America. from contracts, the how about De we our FPS? come Mendez that'll and generally José, question. And of Bank they P&L? work then from of talk you can EBITDA last one for time of on margin have existing indication And any take-rate FPS think

José Neves

it's FPS. I sensitive it EBITDA an level, obviously Maybe out in terms not that Geoffroy, you but one full level. take the actually so do, with practice, at we currently as don't on it's well rates. is of the share P&L profitable will and commercially and break can we day

profitable a is there's enormous it So here. potential think I business unit already. And

which say, very, and the global Thom very, with have companies is outlined, brands you retailers one of this then very traction e-tailers such developed and one features only I Browns capabilities connected and retail, or as Browne. of As Also, FPS, do payments see and getting and logistics. Unique and we Chanel implemented excited. that

comes you sell the was able in run into China, like FPS, when the closures, East, So continue the we of to that's of Middle in they because -- on box customers apologies, to if FPS. launched COVID Russia, with my very in because very out when were we large number FPS it launched Harrods timely it to due

doing $XX are and logistics cap that, companies out there payments doing Now that global companies. just market just there billion-plus are

the are sales We think sell a model it's modularize do next we solution cycles. year. to offer going Now Obviously, quicker full is modularization a -- sell that to to going to speed than up end-to-end. to that

Another win is Marketplace as a service.

companies of a service You saw a see FPS valuation. customer Again, if cap Gucci as marketplace that multibillion model, you that becoming want, with you'll a only solution. there, do other market

them is FPS does of And we'll in exciting all So we for of way. things pipeline business. very these tremendous. do the have potential out and a box, that modularized the

of I will impact it But have term. you. a course, So long we the think to medium will update in tremendous

as then P&L. We our you flows will completed, and keep and contracts pace as these at through signed it are

will that done part not our area IPO, And and is this is much, that we're opportunity. tremendous Luxury further think business visibility very, and exciting a on very get to of FPS. vision vision. to the the that of we're been as luxury, marketplace -- progress really a of be make is it about And I this goes since if beyond which on IPO stated totally marketplace. excited as said, it's I platform very The for company I global New it track vision think So Retail we hasn't an mission, I the Since the A new. I'm honest.

for a be businesses. synergy. marketplace that and we marketplace will it's for the expanding continue the the But have and to capabilities And we capturing platform We also open other market share. a we develop can

is started [Clantana] Harrods, And this holistic luxury an example FPS, not example, You value owners the right? units. -- customer. working these joined provides as start Marketplace long [Clantana], business vision and connected Harrods call that a and [Clantana] the the relationships then for with of on This provides of runway the its what So over a retail are flywheel develop is for now part indoor, owned of same that disparate a with future, really have we industry. to just we're

Alice Ryder

Well, thank you.

next I year in speaking for for in think that wraps quarter. forward this our up our call for to And year-end Thanks, everyone, tonight. call. we you dialing to look early

Farfetch (FTCHQ) 19 Nov 212021 Q3 Earnings call transcript