Classification of NuWays AG to Global Fashion Group S.A.

Company Name:	Global Fashion Group S.A.
ISIN:	LU2010095458
Reason for the research:	Update
Recommendation:	BUY
Target price:	EUR 1.0
Target price on sight of:	12 months
Last rating change:
Analyst:	Christian Sandherr

Q1 results confirm the positive margin trajectory; BUY

GFG reported Q1 group NMV of € 215m, down 3% yoy on constant currency. Sales of € 138m were down 4.3% yoy (cc). While the top line remains soft, broadly in line with our cautious H1 expectations on the back of a muted consumer sentiment in ANZ and Brazil, the margin story is the real takeaway in our view. The group delivered an adjusted EBITDA margin of -3.8% vs. -7.3% in Q1 2025, a 3.5pp improvement driven by cost discipline and a gross margin of 46.5% (+0.5pp). This clearly underpins the company’s positive bottom-line momentum.

Customers: quality over quantity. Active customers declined 4.8% yoy to 7.2 million, but order frequency rose 1.9% and average order value increased 5.2%. This is a familiar and healthy pattern as GFG is shedding low-value shoppers while its engaged base spends more per visit. The KPI mix is consistent with a maturing marketplace model where marketplace take-rates and platform services increasingly drive economics, rather than sheer volume.

Gross margin expansion continues. At 46.5% in Q1, gross margin is up meaningfully yoy and above the FY24 level of 44.9%. This reflects the ongoing mix shift toward asset-light marketplace (which reached 42% of NMV at end-Q1 2026), reduced discounting, and a leaner inventory profile. With the marketplace share likely to continue growing through 2026, further gross margin improvement is structurally embedded, in our view.

Regional divergence persists. In Q1, ANZ remains the growth engine, delivering +3.5% cc NMV growth with active customers up 3.7% yoy to 2.0m. LATAM (NMV -4.3% cc) was impacted by a weaker consumer sentiment in the regions key market, Brazil. SEA continues to be the drag, with NMV down 12.3% cc and active customers falling 15.1% to 1.8m, still the most challenged part of the portfolio, though the rate of decline continues to gradually ease. Importantly, GFG has already implemented several measures (e.g. streamlined product and brand assortment, increased marketplace and service revenues and sharpened customer proposition), which should allow the region to return to profitable growth within the next one to two years.

Management reaffirmed its FY26 guidance for cc NMV growth in the range of -4% to +4% yoy (eNuW: 0.8%) and adjusted EBITDA of € 15-25m (eNuW: € 19m). The guidance had been set with an explicit acknowledgement of softer H1 trading, meaning Q1 has come in as expected. A materially positive H2 remains the base case and is unaffected by today’s release.

Thesis intact, re-rating catalysts in sight. The investment case of GFG is based on three pillars: (1) a structural margin improvement driven by marketplace mix shift and cost rightsizing, (2) a return to top-line growth creating operating leverage and (3) a achieving positive NFCF. Importantly, all three pillars are already in motion; FY25 was the first year with positive adj. EBITDA, cash burn was significantly decreased and growth has returned in two out of three regions.

With € 86m in net cash and a negative enterprise value, the market continues to price in an outcome that the operational data simply does not support. We hence confirm our BUY rating with an unchanged € 1.00 PT based on DCF.

You can download the research here: global-fashion-group-sa-2026-04-30-previewreview-en-7acc4
For additional information visit our website: https://www.nuways-ag.com/research-feed

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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