Investors can contact the law firm at no cost to learn more about recovering their losses
LOS ANGELES, Nov. 28, 2023 (GLOBE NEWSWIRE) -- The Portnoy Law Firm advises Farfetch Limited ("Farfetch" or the "Company") (NYSE: FTCH) investors that a lawsuit filed on behalf of investors that purchased Farfetch securities between March 9, 2023 and August 17, 2023, inclusive (the “Class Period”)
Investors are encouraged to contact attorney Lesley F. Portnoy, by phone 844-767-8529 or email: lesley@portnoylaw.com, to discuss their legal rights, or click here to join the case via www.portnoylaw.com. The Portnoy Law Firm can provide a complimentary case evaluation and discuss investors’ options for pursuing claims to recover their losses.
Farfetch, along with its subsidiaries, operates a global platform within the luxury fashion industry. Apart from revenue, one of Farfetch's critical financial metrics is gross merchandise value ("GMV"), defined as the total dollar value of orders processed, encompassing product value, shipping, and duty, while deducting returns, value-added taxes, and cancellations. Farfetch maintains that GMV closely correlates with its revenue.
The primary markets for Farfetch include the United States ("U.S.") and the People's Republic of China ("China"). Despite recent weakness in these markets, the company reassured investors during the Class Period that by the first quarter ("Q1") of 2023, these markets had either rebounded or were in the process of recovery. They were expected to be the driving force behind future revenue and GMV growth, especially in the second quarter ("Q2") of 2023.
In May 2023, Farfetch announced the official launch of its European partnership with the footwear and clothing brand Reebok International Limited ("Reebok"). Authentic Brands Group, the owner of Reebok, had joined forces with Farfetch in 2022 to manage its European business operations, revamp its European e-commerce platforms, and expand the brand's luxury collaboration offerings globally.
The complaint alleges that throughout the Class Period, Defendants engaged in materially false and misleading statements regarding the Company's business, operations, and prospects. Specifically, the allegations include:
1. Farfetch was experiencing a significant growth slowdown in the U.S. and China.
2. The company encountered onboarding challenges that affected the launch of its Reebok partnership.
3. Farfetch downplayed the difficulties it faced in managing its supply chain and inventory, or overstated its capability to manage these issues.
4. All of the above had a substantial adverse impact on Farfetch's revenue and GMV growth.
5. Consequently, Farfetch was unlikely to meet market expectations for its Q2 2023 financial results or its own FY 2023 revenue guidance.
6. As a result, the Company's public statements were materially false and misleading during the relevant periods.
On August 17, 2023, Farfetch released a press statement announcing its Q2 2023 financial results. Among other disclosures, the company reported revenue of approximately $572 million, significantly below the market consensus of $650.71 million. Additionally, Farfetch provided an FY 2023 revenue forecast of about $2.5 billion, in contrast to the average analyst estimate of $2.8 billion and the Company's prior FY 2023 revenue forecast of $2.9 billion.
On the same day, Farfetch conducted a conference call with investors and analysts to discuss its Q2 2023 results. During the call, Company management disclosed that significant slowdowns in growth in the U.S. and China, onboarding challenges affecting the Reebok partnership launch, and issues with inventory and shipping had negatively impacted Farfetch's revenue and GMV for the quarter. This led the Company to revise its expectations for FY 2023 downward.
Subsequently, on August 18, 2023, media reports emerged stating that several analysts had downgraded Farfetch due to its disappointing Q2 2023 results and reduced guidance for FY 2023.
Following these developments, the Class A ordinary share price of Farfetch declined by $2.15 per share, equating to a 45.17% decrease, closing at $2.61 per share on August 18, 2023.
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The Portnoy Law Firm represents investors in pursuing claims caused by corporate wrongdoing. The Firm’s founding partner has recovered over $5.5 billion for aggrieved investors. Attorney advertising. Prior results do not guarantee similar outcomes.
Lesley F. Portnoy, Esq.
Admitted CA and NY Bar
lesley@portnoylaw.com
310-692-8883
www.portnoylaw.com
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