Shares of Farfetch Ltd plunged 22% on Friday and were set to post their biggest percentage drop in more than two years after the online luxury retailer cut a key growth forecast, blaming cooling demand for high-end fashion.

Farfetch, which sells everything from Fendi belts to Versace shirts, said it had overestimated how strong demand would be during the third quarter.

"Our results fell short of our forecast as the extraordinary full price growth rates we had seen through the first part of the quarter shifted to what were still very high levels, but lower than what we had seen exiting Q2 and during the first part of Q3," Chief Executive Officer Jose Neves said.

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Most luxury goods companies have reported big jumps in quarterly sales over the last few weeks helped by a rebound in demand after coronavirus-led restrictions were eased.

Farfetch reported gross merchandise value (GMV) growth, an e-commerce measure of transaction volumes, of about 23%, below its earlier forecast for a 30% growth.

It lowered its full-year GMV growth forecast to about 33%, from 35% to 40% earlier.

The London-based retailer also reported a bigger-than-expected quarterly loss citing higher shipping costs and investments into new marketing methods to counter changes in Apple Inc's privacy policy that have limited advertisers' ability to attract new customers.

J.P. Morgan cut its price target by $2 to $51, saying the company's shares will likely be in the "the penalty box for a little while". However, the brokerage was optimistic about demand improving in the holiday quarter.

Farfetch's shares fell to $35.50 in premarket trading and were set to give up all the gains made since Nov. 12, when the company said it was in talks with Cartier-owner Richemont about buying a minority stake in Richemont's online business.