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Reflecting the lower demand environment, GFG delivered NMV of €452.3 million in Q4, down (6.9) percent YoY, with an 18.2 percent decrease in order volume and a 16.5 percent decrease in active customers. This decline was offset by a 13.8 percent increase in average order value, driven by four drivers: increased items per order, country mix, category mix and price inflation net of discount. Revenue for the quarter was down 8.5 percent.
GFG delivered broadly stable gross margin performance of 42.8 percent in the fourth quarter of FY22, despite pricing activity from lower demand. However, profit was impacted by cost reductions and additional costs due to savings from lower marketing investment in the Australia-New Zealand fulfillment center, resulting in an adjustment. EBITDA margin (1.3) per cent.
In Q4, GFG’s marketplace share increased by 2.1% YoY to 34.8% of NMV. While Southeast Asia grew the marketplace materially, ANZ’s focus on higher-margin own brands resulted in a slight loss of share. In Latin America, marketplace sellers were intentionally rationalized to improve the customer experience. Overall, the marketplace continued to grow in absolute terms. The group focused on its platform services and generated higher revenue from its marketing by GFG, operations by GFG and data by GFG offerings, the company said in a press release.
“2022 played out very differently than we expected and I am proud of how the team has been able to adapt to the rapidly changing environment across all of our markets. We continued to focus on executing on our strategy, which helped us navigate a volatile market and ultimately deliver €1.6bn in NMV last year while maintaining a strong gross margin. Looking ahead, we will prioritize profit and cash flow in the near term while continuing to make select investments for the future, ensuring we are well positioned when growth returns. Christoph Barchevitz, CEO of GFGSaid.
The outlook reflects the near-term priority of a demand environment and growth to protect cash flow and improve profitability. In 2023, GFG is expected to deliver NMV growth of (5)-0 percent, c.€1.5-1.6 billion in NMV, and c.€1.0 billion in revenue, all on a constant currency basis. Adjusted EBITDA margin is expected to be (3)-(1) percent, driven by year-over-year profitability improvement while actively managing costs. Capex investment will be c.€35 million. The group is expected to acquire Adj. EBITDA break even in 2024.
Fibre2Fashion News Desk (RR)