GFG lifts 2024 forecast on better margins and demand

LUXEMBOURG - On Wednesday, Global Fashion Group S.A. (GFG) announced an increase in its full-year 2024 guidance, expecting to surpass the previously set Adjusted EBITDA targets. This optimistic revision is attributed to enhanced operational efficiencies that have bolstered the company's performance, in addition to favorable consumer demand trends. These factors have contributed to a substantial rise in the Adjusted EBITDA margin for the third quarter.

GFG now anticipates a year-over-year decrease in Net Merchandise Value (NMV) ranging from 8% to 12% on a constant currency basis, an improvement from the earlier forecast of a 5% to 15% decline. Consequently, the projected NMV for 2024 is between €1,100 million and €1,160 million, taking into account the current impact of exchange rates, as opposed to the previous estimate of €1,100 million to €1,200 million. The company also improved its Adjusted EBITDA outlook to a range of €(16) million to €(28) million, revised from the former range of €(25) million to €(45) million.

Preliminary data for the third quarter of 2024 indicates that GFG's NMV dropped by 4% year-over-year to €264 million, signaling a deceleration in the rate of decline compared to previous quarters. The decrease in NMV was region-specific, with a 1% fall in LATAM, a 12% drop in SEA, and a 1% decrease in ANZ. Revenue for the quarter was reported at €174 million, a 3% year-over-year decrease. Both NMV and Revenue were calculated on a constant currency basis.

The third quarter also saw GFG's Adjusted EBITDA margin improve by 5 percentage points year-over-year to (5)%, amounting to €(8) million. The quarter concluded with the company holding €189 million in Pro-Forma Cash and €128 million in Pro-Forma Net Cash, after accounting for convertible bond debt and minor third-party loans.

All figures mentioned are preliminary and unaudited, with the final Q3 2024 numbers subject to potential adjustments. GFG is set to release its confirmed third-quarter results on November 14, 2024.

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