Global Fashion Group S.A. Sees Positive Trends Amid Challenges

Global Fashion Group S.A. (GFG) has shown signs of resilience in its Q2 results, with improvements in top line metrics and margins. The company's net merchandise value (NMV) remained stable year-over-year at €249 million in constant currency, despite a decline of 8% due to foreign exchange effects. Notably, regions such as Latin America and Australia/New Zealand demonstrated strong recoveries, offsetting declines in Southeast Asia.

Despite a 1.2% year-over-year decrease in Q2 sales, GFG's strategic shift towards Marketplace and Platform services contributed to a rise in gross margin by 2.9 percentage points. Adjustments in overheads and more cost-efficient operations led to a significant improvement in adjusted EBITDA margins, resulting in a €3 million EBITDA for Q2, compared to a negative result in the previous year.

With a pro-forma net cash position of €97.2 million, GFG is well-positioned to manage its ongoing restructuring efforts, particularly in Southeast Asia. Given these factors, NuWays AG has reiterated a "buy" recommendation for GFG, with a target price of €0.80, highlighting the company's undervaluation amid positive free cash flows on the horizon.