The shares of U.K.-based luxury goods retailer Farfetch (NYSE:FTCH) have been losing momentum despite impressive revenue growth in the last quarter. Given the company’s solid growth prospects and strong market presence, should investors buy the dip in the stock? Read more to find out.Headquartered in London, U.K. Farfetch Limited (FTCH) is an online luxury fashion goods seller. It operates internationally through three segments—Digital Platform; Brand Platform; and In-Store. Amid strong revenge spending, the company witnessed stellar revenue growth in its fiscal second quarter (ended June 30). Its revenues for the quarter increased 43% year-over-year to $523 million.
However, with the rapid spread of the COVID-19 Delta variant and decelerating economic growth, the demand for FTCH’s products is expected to decline. In July, retail sales in the U.S. declined 1.1% month-over-month, missing analysts’ estimates of a 0.3% retreat. In addition, online sales declined 3.1% from the prior month.
Consequently, investors have been pulling out of this luxury goods stock. Shares of FTCH have declined 32.3% in price year-to-date and 9% over the past month. It is currently trading below its 50-day moving average of $46.53.