Farfetch stock price was cut nearly in half on Friday: explore why

Farfetch Ltd (NYSE: FTCH) opened more than 40% down on Friday after coming in well below Street estimates for revenue in its second financial quarter.

Farfetch stock tanks on lowered guidance

The stock is being punished this morning also because the luxury fashion company trimmed its guidance for the value of orders processed.

Farfetch now forecasts $4.4 billion in gross merchandise value this year versus $4.9 billion it had guided for earlier. Still, its CEO Jose Neves said in a press release today:

Farfetch stock is now down close to 65% versus its year-to-date high in early February.

Notable figures in Farfetch Q2 earnings release

• Lost $281 million versus the year ago $68 million
• Per-share loss also climbed from 50 cents to 68 cents
• Adjusted loss printed at 21 cents on a per-share basis
• Revenue declined just over 1.0% to $572 million
• Consensus was 28 cents loss on $650 million revenue

Despite Q2 weakness, the management expects to turn positive in terms of free cash flow this year, as per the earnings press release. Still, KeyBanc analysts downgraded Farfetch stock today to “sector weight” citing: