Sparks - Global Fashion Group

Global Fashion Group’s H126 results are notable as the company has reported its first H126 adjusted EBITDA with the current footprint despite the pressures on consumers in its markets. While the revenue trends between its three main regions remain mixed, each region has delivered an adjusted EBITDA profit in the period, and all improved year-on-year. The improvement in profitability fed through to positive normalised free cash flow so that on a last 12-months basis, it has improved by €28m to -€19m. Reflecting the more challenging macroeconomic environment, management has tightened its FY26 guidance for constant currency net merchandise value (NMV) to a range of -4% to 0% versus FY25 from -4% to +4% previously. Despite the narrowing of NMV guidance to the lower end, management has narrowed upwards its adjusted EBITDA guidance to €18–25m from €15–25m, previously. Overall foreign currency rates appear more favourable from a translation perspective, especially in its two largest markets, Australia and Brazil.

On a constant currency basis, NMV declined by 0.6% in Q226 (better than Q126’s -3.0%), and revenue declined by 2.9% (better than Q126’s -4.3%). The gross margin was stable, and adjusted EBITDA saw a good improvement to €6.1m from €3.0m in Q225, which represented a good increase in margin from 1.8% to 3.6%.

Australia and New Zealand continued to see good growth in active customers, which drove further gains in constant currency and NMV and revenue, and gross margin improved following Q126’s dip.

LatAm continued to experience softness in active customers, which led to constant currency declines in NMV and revenue and a dip in gross margin.

SouthEast Asia continues to experience weak trends in active customers giving double-digit constant currency declines in NMV and revenue. Despite the weak top-line trends, gross profit improved versus Q225.