Shares were down 24 percent in after-hours trading, after the luxury marketplace reported a 33 percent increase in revenue to $583 million in the three months ending September 20, 2021, short of the average analyst forecast for $591 million.

During the quarter, gross merchandise volume (or the value of goods sold on the Farfetch platform) increased 28 percent to $1 billion. The company said it remains on track to end the fiscal year with positive adjusted EBITDA for the first time, and also reported positive adjusted EBIDTA in the quarter.

Founder and chief executive officer José Neves brushed off the lower than expected growth.

“We did the best we could to forecast, and what we saw was very high growth faster than anyone,” he said. “We went from hyper-growth to very high growth. That’s all that happened.”

Challenges from the quarter include higher shipping costs as well as higher marketing costs. “Demand generation expense,” or customer acquisition costs, increased 60 percent due to increased marketing spend, which was impacted by Apple’s recent privacy measures, which allowed customers to opt-out of tracking by advertisers. The company also reported inflation in search engine marketing costs. Chief customer officer Stephanie Phair said Farfetch had already controlled its demand generation expense in the first weeks of the fourth quarter by employing other strategies, including more influencer marketing, investing in higher funnel brand campaigns and increasing push notifications.

Neves declined to comment any further on a potential deal with Richemont. Last week both companies confirmed they were in talks to partner in a number of ways, including by having Farfetch provide the technology for Richemont’s brand e-commerce sites and investing in and providing technology services for Yoox Net-a-Porter. Neves said, “2022 will be a pivotal year of our platform vision.”

Next year will also bring the launch of Farfetch’s beauty marketplace and an expansion in its advertising revenue. Neves said its “marketing solutions” business is one of its fastest-growing segments thanks to interest from the brands and its large customer audience, and that the company could turn it into a sizeable business akin to Amazon’s by investing in the team and available inventory across its channels.

“It is conceivable that Farfetch may face organic headwinds at this point, as consumers resume some of the old physical retail shopping habits, while Farfetch has to deal with lower promotion intensity,” said Bernstein analyst Luca Solca in a note.

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