Global Fashion Group expects a second profitable quarter on an adjusted EBITDA basis, as well as its first cash flow-positive three months. It’s expecting the second quarter to end with net merchandise value (NMV) growth on a constant currency basis of above 20%, despite the virus impact in April, driven by more than two million new customers.
The company operates webstores such as The Iconic, Zalora, Dafiti and La Moda in Asia Pacific, Latin America and Eastern Europe. They sell own labels, as well as major brand names under partnership deals from Mango to Dorothy Perkins, Lee, Topshop, Guess and many more.
It’s predicting its adjusted EBITDA profitability will be due to a strong gross margin and “significantly better marketing efficiency”.
The company also said it has seen improved Marketplace share of more than 30% (up from 19% in Q2 2019) and around 90% Marketplace NMV growth “as a result of category mix shift and increased Marketplace SKU share”.
The company added that profitability, alongside disciplined working capital management and capital expenditure, resulted in strong cash generation and a pro-forma cash balance at 30 June of around €260m, up €50m from the end of March.