Global Fashion Group sales continued to rise in Q3
Global Fashion Group's (GFG) Q3 results on Thursday showed continued growth, despite wider fashion demand still not yet having recovered to pre-pandemic levels in the markets in which it operates.
The company managed to outperform that wider market with an 11% increase in order frequency and double-digit growth in both net merchandise value (NMV) and active customers.
And its co-CEOs said: “In a market with over a billion potential consumers where e-commerce adaptation continues at pace, we remain confident of the opportunity ahead.”
The company targets growth markets in regions such as Latin America, Asia and Eastern Europe (CIS) and said that its Q3 revenue rose to €366.2 million from €336.5 million. That was an increase of 8.5% in constant currency.
NMV rose to €572.2 million from €503.4 million, or an increase of 12.4% constant currency. And gross profit was up to €167.6 million from €149.5 million. However, EBIT was a wider loss of €29.5 million after only an €8.3 million loss this time last year. And adjusted EBITDA was a loss of €7.5 million after a profit of €10.3 million last time.
The owner of the Dafiti, Lamoda, Zalora and The Iconic platforms reaffirmed its guidance for the full year and said it expects to grow NMV by more than 25%, delivering between €2.3 billion and €2.4 billion in this area, with €1.5 billion of revenue. It continues to expect a modest improvement in adjusted EBITDA compared to the €16 million reported a year ago.
Looking in more detail at the quarterly performance, the company said NMV may only have been up just over 12% year-on-year but it was 51% higher on a two-year basis. This was driven by an increase in orders and average order value, “as loyal customers continued to spend more across GFG’s platforms. With 17 million Active Customers order frequency increased by 11% and NMV per Active Customer [was] up 15% to €131.50”.
Q3 performance in Latin America was affected by the exceptionally strong comparative and a weaker macroeconomic environment. In CIS, NMV grew 31% reflecting the success of its premium proposition and customer initiatives. NMV growth in Southeast Asia and Australia-New Zealand remained strong (despite Covid restrictions) at 16% and 29%, respectively.
It also said Marketplace grew by 28% in Q3, with participation reaching 40% of NMV. This alongside GFG’s stable retail margin helped to deliver an increase in gross margin of 1.4pps to 46%.
GFG continued to broaden its assortment by adding new brands to its growing portfolio οf global and local brands. In Southeast Asia, the company extended its partnership with H&M Group to include COS and Monki as well as adding Old Navy from Gap Inc. Australian brand PE Nation, a longstanding partner, was exclusively launched in CIS.
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