Q4 2023 MYT Netherlands Parent BV Earnings Call

Greetings and welcome to the <unk>.

Teresa fourth quarter and full fiscal year 2023 earnings conference call. At this time all participants are in a listen only mode. Today's call is being recorded and we have allocated one hour for prepared remarks and Q&A.

Now my pleasure to introduce.

Your host Martin Dear Mitra Research Chief Financial Officer. Thank you Sir please begin.

Thank you operator, and welcome everyone to my Trapezius Investor Conference call for the fourth quarter and full fiscal year 2023.

With me today is our CEO Michael <unk>.

Before we begin we'd like to remind you that our discussions today will include forward looking statements any comments, we make about expectations are forward looking statements.

Subject to risks and uncertainties, including the risks and uncertainties described in all Android porch.

Any factors could cause actual results to differ materially we are under no duty to update forward looking statements. In addition, we will refer to certain financial measures not reported in accordance with <unk> on this call.

You can find reconciliations of these non <unk> financial measures.

Our earnings press release, which is available on our investor.

Relations website at investors adopt my tree, so dot com I will now turn the call over to Michael.

Thank you Martin also from my side, a very warm welcome to all of you and thank you for joining our call today comment on the results and performance, while the fourth quarter and full year fiscal year 2023.

We are extremely pleased with our excellent results in a very difficult market environment.

With strong double digit growth and continued profitability, we have surpassed the market expectations, both for the fourth quarter and the full fiscal year 2023.

This performance clearly sets us apart and demonstrates the fundamental strengths of the mitral razor business model as well as the superior quality of execution.

Before I speak to some of the key achievements, let me just point out some highlights of the fourth quarter.

We saw high double digit GMB growth in the United States achieved double digit growth in mainland China.

Again, our business with top customers over proportionally.

<unk> maintained profitability, despite some margin pressures.

The current consumer environment is can be characterized by a slowdown of aspirational customer spend.

Increased promotional intensity by many players as well as ongoing economic uncertainties across the world.

Now more than ever before our focus on the highest spending Guangzhou building customer.

Well the highly curated inspirational offer on.

Full price selling.

And on truly money can buy experiences to drive customer engagement is proving to be the superior business strategy.

I want to leave you today with three key messages, allowing you to have a clear view on the strength and health of our business.

First our unique positioning.

Digital platform focusing on big spending what Youre building customers continues to generate.

Mobile growth, even in very challenging economic circumstance.

This is evident in our excellent top customer growth and double digit <unk> expansion across all geographies.

Second the sheer number and quality of brand collaborations as well as the money can buy experiences and activations in the fourth quarter.

It is again.

Significantly increased our brand equity across the globe.

Particularly in the United States.

Sure.

With the successful transition to a completely new technology stack in the fourth quarter and the successful test runs in our new state of the Art distribution Center light fish Airport, we have put in place and almost fully paid the foundations for future multi year growth and service.

Improvements for our business.

<unk> sector, leading growth.

Strong profitability and ongoing investments into the future.

Clearly apart from peers.

Let me now comment in more detail on these three key messages for today.

First in the fourth quarter, we grew our gross merchandise value GMB.

At plus 13% compared to Q4 fiscal year 2020.

For the fiscal year, our GMB growth reached plus 14, 5% compared to fiscal year 2022.

This strong double digit growth is above market expectations and sets us apart.

Our consistent growth momentum in fiscal year 2023, as evidenced also by the high two year growth rate in <unk> of plus 33, 6% in the fourth quarter and up plus 38, 9%.

For the fiscal year 2023 compared to fiscal year 2021.

It is also highly noteworthy that the United States generate again.

An outstanding GMB growth was plus 48% compared to Q4 of fiscal year 2022.

The United States has become a major growth driver for our business despite market slowdown and accounted for 19, 1% of our total business in the fourth quarter of fiscal year 2023.

The driver for these excellent results is our continued focus on the big spending wardrobe building top customer and not be aspirational occasional luxury shopper.

Our top customer base grew by plus 24, 2% compared to Q4 fiscal year 2022.

Average spend per customer in terms of GMB grew by plus three 7% in the fourth quarter of fiscal year 2023.

Overall, the business with top customers grew by plus 28, 7% in terms of GMB.

<unk> Q4 fiscal year 2022.

Over the last three years, we have grown our business with top customers by plus 58, 3% and full fiscal year 2021, plus 26, 8% and full fiscal year 2022 and now.

Plus 31% and full fiscal year 2023.

The share of top customers and our business in terms of GMB has increased from 32, 6% and full year fiscal year 2002, <unk>. So now 38, 5% in fiscal year 2023.

Pretty in line with our focus on big spending customers was the.

Launch in the fourth quarter.

Our exclusive partnership with <unk>, the world's largest luxury watches and jewelry retailer from Switzerland to offer certified pre owned what ships with an international two year warranty and full service.

Package directly from the watch experts.

The offer initially launched in Europe .

And covers the most elevated selection of high end and certified pre owned time pieces from brands such as order might be slightly.

Right link.

EDC Schaffhausen.

CAGR liquids and Omega so far the most expensive much sold on our platform was an 86000 euro or the MA PD.

<unk>.

In line with our high end strategy, our average order value increased by plus four 5% to a record high of 654 Euro for the full fiscal year 2023 compared to fiscal year 2022.

This is not just driven by our continued expansion into new luxury categories, such as the recently and successfully launched home and lifestyle category, but also by the preference of top customers to more expensive items.

Second the fourth quarter saw an unprecedented number of high impact campaigns exclusive product launches and events as well as money can buy experiences.

All of them further increased our brand awareness and brand equity as well as clearly positioned us globally as the leading digital luxury platform.

The fourth quarter, we had the exclusive launch of styles from leaves us powerless <unk> connection.

The launch.

Of an exclusive 84 piece capsule collection from Deutsche Bank.

Only available at micro laser alone.

Launch of an exclusive capsule collection from Zimmerman on my Teresa <unk>.

The exclusive launch of Pink pp styles from Valentino only available at my Teresa.

The exclusive launch of the shark La cowboy boots by <unk> only available at <unk> and the launch of exclusive styles for petrol on mitral. It. Please see our investor presentation for more details on brand collaborations we.

We also hosted again, many exclusive events, while our top customers providing them with money can buy experience examples of events in the fourth quarter include the Dana and party to celebrate the launch of new Avis Polo's <unk> collection with the creative director Jonathan Amazon attending.

At the sheets Goldstein residence in Los Angeles.

A two day experience with top customers in Rome, and partnership has been the zone Valentino, including an exclusive private tour the archives optimism enroll.

As well as events in New York, Stockholm, and Central pit.

The most significant and biggest event ever in terms of global press and social media reach was a three day experience in part <unk> in partnership with Dolce <unk> Gabbana to celebrate the launch of the 84 piece exclusive capsule collection.

Three days included a private cocktail reception by Domenico Deutsche and Stefan will cabana at their home in Portofino.

As well as a one hour fashion show for the capsule collection collect staged at the famous P et cetera, any part tufano for celebrities customers and press exclusively created for micro arrays I buy the two design.

Please see our investor presentation for more details on events in the fourth quarter 2023.

A big focus for our brand building efforts as evidenced by the number of events. We hosted there continues to be the United States, which is a key market to drive growth for <unk>.

In order to engaged and bill personal relationships with high net worth customers. We hosted our first ever fight week pop up in partnership with Flamingo had stayed in east Hampton in the months of July .

We converted the former auto body repair shop in.

<unk> has some a body shop offering a highly curated selection of merchandise as well as hosting was 15 events into location with partners such as Oscar better than Doctor Barb ask.

Luis Miller, the end consumer magazine, as well as featuring Porsche and Ferrari cars.

In total we welcomed over 3200 registered selected guests over five weeks.

Please see our investor presentation for more details on the pop up in East Hampton.

Third to fourth quarter, So again, several key milestones for our business.

Will drive significant future growth service improvements and profitability for <unk>.

<unk>.

And as announced in the last earnings call in April we successfully concluded.

My 18th year project to upgrade our complete ecommerce technology stack, we migrated all our websites tax content management systems merchandising and product information systems to a new service based and highly scalable platform that is managed.

I ask directly aimed and will allow us to improve speed flexibility personalization regionalization and cost of development.

<unk> to the new platform was achieved with minimal disruption to our business, which is a testament.

Two our excellent in house technology capabilities as anyone can tell that has gone through a similar large scale technology upgrade process.

Over the coming months, we will more and more leverage our new technology platform for growth and margin improvements.

With our brokers our partnership will not only entered another luxury category in the fourth quarter offering certified preowned watches, but also onboard at another company successfully to our curated platform model CPM.

This time, even with inventory sitting in the stores of our partner.

In addition, we continue to operate successfully seven fashion brands on the CPM.

And another huge milestone for the company was achieved with the opening of our new distribution centers like CF.

I am happy to announce today.

Struction has been completed.

We start with test operations in the new facility already in August as of Monday September for US, we have actually started shipping customer orders.

This site.

We will ramp up now the operations over the coming months.

Just as a reminder, the new facility was at 55000 square meter of building space will not only provide ample capacity for the future growth of our business, but it will also dramatically improve customer service. Thanks to its unique location and direct adjacency to the international Air freight.

Hub off DHL, we will benefit from significantly later cutoff times for international deliveries additional flight options through the United States and faster return processing from customs destinations.

Already in the second half of fiscal year 2024, we should see that.

Positive impact of the new facility on our business.

All of the milestones mentioned.

With further increase.

High cost variability in our business model Martin will provide in a moment more details on our cost management.

Fight some inflationary cost pressures and how all this translated into our strong bottom line results for the fourth quarter of fiscal year 2023, and the full fiscal year 2023.

With all of the above it should come as no surprise that we are extremely pleased with our excellent performance in the fourth quarter of fiscal year 2023, and the full fiscal year 2023, despite significant macro headwinds, we believe that our results demonstrate the strength and consistency of our business.

Model.

Delivering profitable growth.

We see ourselves as one of the few winners and the expected consolidating luxury E. Commerce space. This also drives our strong confidence in our medium term growth trajectory and profitability levels. Despite the short term uncertainties.

In the current environment.

And now I hand over to Martin to discuss the financial results in detail.

Thank you Michael we are extremely pleased with our excellent performance throughout the fourth quarter and our full fiscal year 'twenty three ending in June 23.

With topline growth exceeding market expectations and additional beats on consensus regarding our profitability.

We continue to grow strongly in all regions of the world.

Outperforming the market.

We successfully continued our path of capturing market share in a consolidating market are profitable.

All top line growth is a clear sign of our superior business model.

And market positioning even in very difficult times like now we.

We will continue to focus on profitable double digit growth.

Which we believe clearly sets us apart from others and to boost our highly valuable top customer base.

Which loves our exclusive and inspiring multi brand offering.

I will now speak to the financial results of the fourth quarter and full fiscal year 'twenty three.

Ended June 32003, and we will provide additional details on certain key developments during the quarter and the full fiscal year.

Unless otherwise stated all numbers refer to euro.

In the fourth quarter of fiscal 2003 running from April to June <unk>.

<unk> increased by double digits, 13%.

$2 $200 2 million as compared to the prior year period of $196 7 million.

With this strong growth, we clearly meet market expectations, delivering again superior growth above peers.

At constant currency <unk>.

<unk> grew by an impressive 12, 1%.

Our growth continues to be driven by expanding our highly valuable top customer base.

The number of top customers grew 24% in the quarter.

And the average spend increased as well by plus 4% of <unk> top customers.

For the full fiscal year 'twenty three.

<unk> grew by 14, 5% to $855 8 million.

As compared to $747 3 million.

In the prior year.

This is also above expectations.

For the full fiscal year.

We grew our top customer base.

25%.

In addition, we also saw a strong increase by <unk> <unk> per top customer by four 3% on average.

And the last three years.

We were able to grow our top customer base by 136%.

Which now generate 38, 5% of.

Of our total revenues.

In fiscal year 'twenty, three we grew our total customer base by nine 6% and achieved a higher performance per customer as reflected by a four 7% growth in <unk> per customer.

Our average order value increased by 28 euros first shipment delivered to a record high of 654 euros.

The continuous increase in <unk> in the past quarters and years.

Clearly improves order economics.

And reflects our successful focus on full price selling.

<unk> operating in the sweet spot of high end luxury.

Total orders shipped during the last 12 months increased by 14%.

Breaking the 2 million Mark for the first time.

Our superior positioning, which is especially attractive to our top customers is also visible in our performance in the U S.

Despite being a highly competitive market the number of our top customers in the U S.

Operator: Greetings and welcome to the Myterisa fourth quarter and full fiscal year 2023 Ernest Conference call. At this time, all participants are in a listen only mode. Today's call is being recorded and we have allocated one hour for prepared remarks and Q&A.

Grew by 64% during the last quarter.

The number of first time buyers in the U S grew by 44%.

The U S. In total grew by 41% <unk> in the quarter and now makes up 19% of our business.

Martin Beer: It is now my pleasure to introduce your host, Martin Beer, Myterisa's Chief Financial Officer. Thank you, sir. Please begin. Thank you, operator, and welcome everyone to Myterisa's Investor Conference call for the fourth quarter and full fiscal year 2023. With me today is our CEO, Michael Kliger. Before we begin, we'd like to remind you that our discussions today will include forward-looking statements. Any comments we make about expectations are forward-looking statements and a subject to risks and uncertainties, including the risks and uncertainties described in our entry report. Many factors could cause actual results to differentarily. We are in no duty to update forward-looking statements. In addition, we will refer to certain financial measures and not report it in accordance with IFS on this call.

We are expanding our leadership position worldwide.

And are continuing to grow in Europe , and other parts of the world.

It is important to note that due to our full price focus.

Asset light business model.

And strict cost management.

We enjoy a similar profitability margins worldwide and benefit from capturing growth opportunities in any region of the world.

We are committed to delivering consistent and robust growth.

Which is unique in the industry.

Our high end and inspiration focused positioning.

Attracting primarily top customers pays off and shields us from slowdown effects of aspirational customers.

Martin Beer: You can find reconfiliations of these non-IFS financial measures in our earnings press release, which is available on our investor relations website at investors.mytreesha.com.

As we face very challenging and uncertain macroeconomic times.

We remain cautiously optimistic for the full fiscal year 2024.

Michael Kliger: I will now turn the call over to Michael. Thank you, Martin.

Which runs until June 24.

Michael Kliger: Also, from my side, a very warm welcome to all of you, and thank you for joining our call. We will today comment on the results and performance of our fourth quarter and full fiscal year 2023. We are extremely pleased with our excellent results in a very difficult market environment. With strong double-digit growth and continued profitability, we have surpassed market expectations both for the fourth quarter and the full fiscal year 2023. This performance clearly sets us apart and demonstrates the fundamental strengths of the MITREA's business model as well as the superior quality of execution.

And expect GMB growth of 8% to 13%.

We also delivered net sales performance above expectations.

For the full fiscal year net sales were at 706 to $8 6 million.

And 11, 4% increase from $689 8 million in the prior year.

As a reminder, we expect ongoing deviations and growth rates of GMB and net sales.

As different brands operate either under the wholesale model or the CPM.

This is because the individual performance of our brands and the overall luxury markets.

May differ each quarter and season independent of the brand operating with us.

Michael Kliger: Before I speak to some of the key achievements, let me just point out some highlights of the fourth quarter. We saw high double-digit GMV growth in the United States, achieved double-digit growth in mainland China, grew again our business with top customers over proportionally and maintained profitability despite some margin pressures. The current consumer environment is clearly characterized by a slowdown of aspirational customers spend, increased promotional intensity by many players as well as ongoing economic uncertainties across the world.

Under the wholesale model all the CPM.

S. Net sales, we only book the commission fee.

Our CPM revenues.

During the quarter from April to June .

Net sales increased by 16, 5%.

To $203 8 million.

As compared to $174 8 million in the prior year period.

The higher growth rate in net sales is.

This is due to several wholesale brands.

Forming better than some individuals CPM brands.

Michael Kliger: Now, more than ever before, our focus on the high-spending wardrobe building customer, on the highly curated inspirational offering, on full-price selling and on truly money can buy experiences to drive custom engagement is proving to be the superior business strategy. I want to leave you today with three key messages allowing you to have a clear view on the strengths and health of our- Business. First, our unique positioning as a digital platform, focusing on big spending, water building customers, continuous to generate global growth even in very challenging economic circumstances.

Remember performance of our wholesale brands.

As to a 100% reflected in <unk> and 100% in net sales.

Performance of our CPM brand.

100% reflected in <unk>.

But only its commission rates as reflected in net sales.

Therefore.

Above average strength of several wholesale brands.

<unk> and net sales growing even faster than GMB.

Going forward, we expect that those growth differences between <unk> and net sales will not be significant.

And therefore for the full fiscal year 'twenty four.

We also expect net sales growth.

In the range of 8% to 13%.

Michael Kliger: This is evident in our excellent top customer growth and double-digit GM re-expansion across all geographies. Second, the sheer number and quality of brand collaborations as well as money can buy experiences and activations in the fourth quarter allowed us again to significantly increase our brand accuracy across the globe, but particularly in the United States. Third, with a successful transition to a completely new technology stack in the fourth quarter and the successful test runs in our new state-of-the-art distribution center at Leipzig Airport, we have put in place and almost fully paid the foundations for future multi-year growth and service improvements for our business. Like the leading growth, strong profitability and ongoing investments into the future sets us clearly apart from peers.

Similar to the GMB growth.

As of Q4 fiscal year 'twenty three.

We have seven major fashion brands operating seamlessly under the CPM.

We provide full flexibility to our brand partners and can offer both models and our collaboration efforts and expect that one or two brands will switch from the wholesale model to CPM each fiscal year.

Gross profit during the quarter.

And for the full fiscal year was above market expectations.

At $99 9 million and $382 6 million respectively.

<unk> at seven 8% for the full fiscal year.

The continuously high gross profit margin of 49% during the quarter.

So a stable of gap in operating gross profit margin of 320 basis points versus last year.

Which we explained already in the quarter before.

Michael Kliger: Let me now comment in more detail on these three key messages for today. First, in the fourth quarter we grew our growth merchandise value GMV at plus 13% compared to Q4 fiscal year 2022. For the full fiscal year, our GMV growth reached plus 14.5% compared to full fiscal year 2022. This strong double-digit growth is above market expectations and sets us apart. Our consistent growth momentum in fiscal year 2023 is evidenced also by the high-to-year growth rate in GMV of plus 33.6% than the fourth quarter and of plus 38.9% for full fiscal year 2023 compared to fiscal year 2021.

If you compare the achieved gross profit GMB for this.

In last year's quarter and exclude technical effects in the margin calculation.

Which I will explain later.

The operator gross profit margin slippage.

Round 330 basis points. This is exactly in line with our forecast and guidance and it indicates that the effects of the heavy promotional environment and our stable and manageable.

We expect this effect to significantly narrow towards the end of calendar year 'twenty three.

Already in the current quarter, we see a decrease in the margin.

An additional 200 basis points gross profit margin decrease.

Michael Kliger: It is also highly noteworthy that the United States generated again an outstanding GMV growth with plus 40.8% compared to Q4 of fiscal year 2022. The United States has become a major growth driver for our business despite the market slowdown and accounted for 19.1% of our total business in the fourth quarter of fiscal year 2023. The driver for these exons results is our continued focus on the big spending water building top customer and not the aspirational occasional luxury shopper.

The reported gross profit margin of last year is a more technical results.

Based on net sales growing stronger than <unk>.

Outlined before.

As the reported gross profit margin is in relation to net sales.

It showed a decline of 520 basis points. This is due to several wholesale brands growing even stronger than some individuals CPM brands and therefore net sales was growing faster than GMB.

Therefore, the CPM share for this quarter is not comparable to the same.

Period last year.

Comparing the gross profits to <unk>.

Michael Kliger: Our top customer base grew by plus 24.2% compared to Q4 of fiscal year 2022. The average spend third-top customer in terms of GMV grew by plus 3.7% than the fourth quarter of fiscal year 2023. Oh, oh, the business with top customers grew by plus 28.7% in terms of GMV compared to Q4 of fiscal year All the last three years we have grown our business with top customers by plus 58.3% and full physical year 2021, plus 26.8% in full physical year 2022 and now plus 30.1% in full physical year 2023.

It gives you a fair view on the margin development here, we saw the 330 basis points margin slippage, which is stable and was expected as noted on our last earnings call.

At the end of the day, the absolute gross profit achieved in the quarter.

Which was at $99 9 million outperformed expectations.

As there will be performance differences of individual brands operating under the wholesale model all the CPM the reported gross profit margin will.

We will be affected from this mathematically in certain quarters.

Our focus remains on growing the absolute gross profit figure.

And for fiscal year 'twenty four.

We expect gross profit to also grow 8% to 13% in line with top line growth.

Michael Kliger: The share of top customers and our business in terms of GMV has increased from 32.6% in full physical year 2021 to now 38.5% in full physical year 2023. For the inline with our focus on big spending customers was the launch and the fourth quarter of our exclusive partnership with the world's largest luxury watches and jewelry retailers in Switzerland to offer 35 pre-owned watches with an international two year warranty and full service package directly from the watch experts of Boehra.

For the full fiscal year 'twenty three.

Gross profit grew by seven 8% to $382.6 million above expectations.

Profit margin is at an industry, leading level of 49, 8%.

Our focus on full price selling combined with our high end positioning.

<unk> unchanged.

The shipping and payment cost ratio in Q4 remained stable at 13, 9% compared to the prior year quarter.

This is a remarkable success, considering we continue to broaden our customer base worldwide.

Michael Kliger: The offer initially launched in Europe and covers the most elevated selection of high-end and certified pre-owned timepieces from brands such as Audemars Piguet, Reitling, Yvc, Charthausen, Yega Le Kultre and Omega. So far the most expensive watch sold on our platform was an 86,000 euro Audemars Piguet Royal Oak Watch. In line with our high-end strategy, our average order value increased by plus 4.5% to a record high of 654 euro for the full physical year 2023 compared to physical year 2022.

<unk> experienced cost pressures.

Our net sales share outside Europe increased from 41% to 44%.

The stability and the cost ratio mirrors, our successful implementation of further cost efficiencies.

While improving our high performing worldwide customer payment and duty setup.

For the full fiscal year 'twenty three is shipping on payment cost ratio increased slightly by 30 basis points to 13, 4%.

Mike Teresa is able to deliver double digit topline growth rates, which is unique for our industry.

Michael Kliger: This is not just driven by our continued expansion into new luxury categories such as the recently and successfully launched home and lifestyle category, but also by the preference of top customers for more expensive items. Second, the fourth quarter saw an unprecedented number of high-impact campaigns, exclusive product launches and events as well as money can buy experiences. All of them further increased our brand awareness and brand equity as well as clearly positioned us globally as a needing digital luxury platform.

And in this environment.

And capturing market share.

And growing our top customer base in Q4, we continued our marketing efforts as we saw successful high potential new customer acquisition and top customer attention.

During Q4 marketing expenses rose by $5 6 million, reaching $32 1 million.

Which led to a 100 basis points increase in our marketing cost ratio.

The increase is also due to a shift effect of customer events held.

As it is comparing against a low comp in the prior year quarter.

Michael Kliger: The fourth quarter, we had the exclusive launch of styles from Louisvus Paula's Ebisa collection, the launch of an exclusive 84-piece capsule collection from Dolce Habana, only available at Myteresa, the launch of an exclusive capsule collection from Zimmerman on Myteresa, the exclusive launch of pink PP styles from Valentino, only available at Myteresa, the exclusive launch of the Shark Lock Cowboy Boots by Givenchy, only available at Myteresa and the launch of exclusive styles from Etro on Myteresa. Please see our investor presentation for more details on brand collaborations.

For the full fiscal year.

Marketing expenses were $112 million.

With an almost stable marketing cost ratio of 13, 1% 20.

20 basis points increase from $12, 9% in the prior year period.

Once again we.

We were able to keep the marketing cost ratio stable.

We continue our successful approach and increasing top customer marketing efforts and events.

While being efficient with online marketing activities geared towards first time buyers.

Our flexible business model allows us to quickly modify our approach.

Michael Kliger: We also host again many exclusive events for our top customers providing them with money and by experience. Examples of events in the fourth quarter include the dinner and party to celebrate the launch of Louisvus Paula's Ebisa collection with the creative director of Jonathan Anderson attending at the Sheets Goldstein Residence in Los A two-day experience for top customers in Rome and partnership with the Nozong Valentino, including an exclusive private tour, the archives of the Nozong in Rome, as well as events in New York, Stockholm, and Central Page.

Especially <unk>.

Looking at our over $100 million marketing spend.

If the macroeconomic environment were to change dramatically.

Adjusted selling general and administrative expenses only grew marginally by $2 2 million to $28 3 million during the fourth quarter adjusted.

Adjusted SG&A as a percentage of GMB.

Decreased significantly down by 60 basis points to 12, 7% as compared to 13, 3% in the prior year quarter, despite cost pressures in the market.

We are diligently looking at cost efficiencies and cost leverage all departments.

Michael Kliger: The most significant and also biggest event ever in terms of global press and social media reach was a three-day experience in Portofino, in partnership with Dolce and Gabbana to celebrate the launch of the 84-piece exclusive capsule collection. The three days included a private cocktail reception by Domainico Dolce and Stefano Gabbana at their home in Portofino, as well as a one-hour fashion show for the capsule collection collect staged at the famous Piappetta in Portofino for celebrities, customers, and press exclusively created for myteries by the two designers.

And we will ensure that <unk> continues its overall profitable growth path, even any unique times like now.

Looking at the full fiscal year adjusted SG&A expenses rose by $18 8 million to $12 2 million with a slight increase of 60 basis points in the SG&A SG&A expense ratio to 13, 1%.

In Q4 fiscal year 'twenty threes adjusted EBITA was.

It was $7 4 million above market expectations with an adjusted EBITDA margin of three 6%.

For the full fiscal year.

Michael Kliger: Please see our investor presentation for more details and events in the four-score-ter 2023. A big focus for our brand-building efforts, as evidenced by the number of events we hosted there, continues to be the United States, which is a key market to drive growth for myteries success. In order to engage and build personal relationships with high net worth customers, we hosted our first ever five-week pop-up in partnership with Flamingo Estate in East Hampton in the months of July.

Adjusted EBITDA was at $41 1 million.

Representing an adjusted EBITDA margin of five 3%.

Our consistent track record of reporting positive adjusted EBITDA.

Simplifies the robustness and resilience of our business model.

We consistently deliver outstanding industry, leading performance.

Both in terms of top and bottom line results.

Setting a unique benchmark in the industry.

Michael Kliger: We converted the former auto-body repair shop into a summer body shop offering a highly created selection of merchandise, as well as hosting over 15 events in the location with partners such as Oscar de la Lenta, Dr. Baba Stone, Louis Miller, the Hampton's magazine as well as featuring Porsche and Ferrari cars. In total, we welcomed over 3,200 registered selected guests over five weeks.

There are no structural barriers and our business model or market positioning to prevent us from achieving the profitability levels, we experienced in the last years over the medium term.

For fiscal 'twenty for <unk>.

Even the current macroeconomic uncertainties.

The extraordinary promotional environment.

We prudently guide towards an EBITA margin of three 5%.

As in the past, we are confident to strike the right balance between strong growth.

Michael Kliger: Please see our investor presentation for more details on the pop-up in East Hampton.

And above market profitability.

Michael Kliger: Third, the four-score-ter saw, again, several key milestones for our business that will drive significant future growth, service improvements and profitability for myteries. As announced in the last earnings call in April, we successfully concluded a multi-year project to upgrade our complete e-commerce technology stack. We migrated all our websites, apps, content management systems, merchandising, and product information systems to a new service-based and highly scalable platform that is managed by us directly in and will allow us to improve speed, flexibility, personalization, regionalization, and cost of IT development.

Our end to end profitability throughout the P&L continues to be visible at both the adjusted operating income and adjusted net income levels and.

Michael Kliger: The position to the new platform was achieved with minimal disruption to our business, which is a testament to our excellent in-house technology capabilities as anyone can tell that has gone through a similar, large-scale technology upgrade process. Over the coming months, we will more and more leverage our new technology platform for growth and margin improvements. With our Bootswara partnership, we not only entered another luxury category in the fourth quarter, offering certified pre-owned watches, but also onboarded another company successfully to our curated platform model, CPM. This time, even this inventory sitting in the stores of a partner. In addition, we continue to operate successfully seven fashion brands on the CPM.

In fiscal year 'twenty, three adjusted operating income amounted to $29 4 million.

With an adjusted operating income margin of three 8%.

Adjusted net income amounted to $20 3 million.

Resulting in an adjusted net income margin of two 6%.

In Q4 of fiscal year 'twenty, three we had a positive operating cash flow of $28 million and a positive free cash flow of $24 million.

This is above previous levels and was achieved despite the continuous ramp up of our new logistics center in Leipzig.

Which more than 75% of Capex has been paid.

We finished the fiscal year with no bank debt no utilization of the $60 million working capital revolver.

$13 million cash on hand.

This gives us a solid financial strength compared to other players in the industry.

Because of our cash and balance sheet strength, we are managing our inventory levels for profit maximization we.

We are not forced into short term cash generation or some other place in the industry.

Which will create manifolds issues for them in the medium term.

Our overarching focus.

Is to attract and retain the right customer cohorts.

With focus on full price being mindful of brand relationships and preventing undo inventory aging.

Michael Kliger: Another huge milestone for the company was achieved with the opening of our new distribution center, Life City Airport. I'm happy to announce today that the construction has been completed and that we started test operations in the new facility already in August. As of Monday, September 4th, we have actually started shipping customer orders from the site. We will ramp up now the operations of the coming months. Just as a reminder, the new facility with a 55,000 square meter of building space will not only provide ample capacity for the future growth of our business, but it will also dramatically improve customer service thanks to its unique location and direct adjacency to the International Air Freight hub of DHL.

With this approach.

And our enacted measures.

We expect to return to normal levels of days inventory outstanding of 260 days.

The current 302 days in the medium term.

The current inventory position does not create any concerns for us because first the June level is elevated due to early deliveries compared to last year.

We have 800 basis points or 20 million euro earlier forward to deliveries compared to last year.

Second previous year is influenced by Merchandised buyback programs with CPM Bratz.

And therefore, there was a unique stock reduction in last year and third.

80% of our inventory covers the current and upcoming seasons.

Michael Kliger: We will benefit from significantly later cut-off times for international deliveries, additional flight options to the United States, and faster return processing from customs destinations. Already, in the second half of fiscal year 2024, we should see the positive impact of the new facility on our business. All the milestones mentioned will further increase the high cost variability in our business model.

With our full price and high end positioning in luxury we are able to achieve the targeted sell through rates over a much longer period than peers. As a reminder, we usually achieved a sell through of 95% over 21 months.

Please also bear in mind that unlike others.

<unk> achieved and continue.

Alright, good double digit growth rates.

Enabling us to clear out additional merchandise.

Michael Kliger: Martin will provide in a moment more details on our cost management despite some inflationary cost pressures and how all this translated into our strong bottom line results for the fourth quarter fiscal year 2023 and the fourth fiscal year 2023. With all the above, it should come as no surprise that we extremely pleased with our excellent performers in the fourth quarter of fiscal year 2023 and the fourth fiscal year 2023, despite significant macro headwinds.

In addition, we operate at an industry, leading gross profit margin of around 50%.

And reported a gross profit margin slippage of only 170 basis points last fiscal year.

We ended the 12 month period of fiscal year, 'twenty, three and a strong financial position with cash and cash equivalents of $30 1 million No bank debt and a total unused availability under the revolving credit facility of $60 million as of June 32003.

Michael Kliger: We believe that our results demonstrate the strengths and consistency of our business model delivering profitable growth. We see ourselves as one of the few winners in the expected consolidating luxury e-commerce space. This also drives our strong confidence in our medium-term growth trajectory and from the busy levels despite the short-term uncertainties in the current and bad.

We have fully paid inventory in our warehouse and the remaining capex of the Leipzig warehouses only around eight to 10 million Euro in 2000 and fits in fiscal year 'twenty four.

In addition to our high free cash flow conversion in our business model with double digit growth rates.

We have a favorable favorable cash cycle with our CPM partners.

As we only pay them weeks after we received the payment from the customer.

Martin Beer: And now I hand over to Martin to discuss the financial results in detail. Thank you, Michael. We are extremely pleased with our excellent performance throughout the fourth quarter and our full fiscal year 23 ending in June 23 with top-line growth, exceeding market expectations and additional beat for consensus regarding our profitability. We continue to grow strongly in all regions of the world outperforming the market. We successfully continue our path of capturing market share in a consolidating market.

And we bear no inventory risks and the CPM model.

We are therefore in a great position.

Our double digit top line growth.

And are able to adjust short term.

If the macroeconomic situation were to change dramatically.

We are proud of our continued profitable growth story, even in a very difficult market environment like now.

We believe that for the full calendar year 2023.

Macroeconomic uncertainties will continue for sure.

With us cautiously optimistic for fiscal year 'twenty four.

Martin Beer: Our profitable top-line growth is a clear sign of our superior business model and market positioning, even in very difficult times like now. We'll continue to focus on profitable double-digit growth, which we believe clearly sets us apart from others and to boost our highly valuable top customer base, which loves our exclusives and inspiring multi-brand offering.

And our guiding.

<unk> net sales growth between 8% to 13%.

Gross profit growth between 8% to 13%.

And an adjusted EBITDA margin.

3% and 5%.

As seen in prior years please.

Please remember that our quarterly performance varies due to seasonality.

Q1, and Q3 of our fiscal year.

Martin Beer: I will now speak to the financial results of the fourth quarter and full fiscal year 23 and June 30, 23, and we'll provide additional details on certain key developments during the quarter and the full fiscal year, unless otherwise stated all numbers refer to euro. In the fourth quarter of fiscal 23, running from April to June, GMV increased by double digits, 13% to 200.2 million as compared to the prior year period of 196.7 million.

A weaker quarters, whereas Q2, and Q4 are usually stronger.

But this year in.

In addition.

We expect a much stronger H two versus HVAC performance.

<unk> already talked about leveraging our new technology platform for growth and margin improvements the.

The benefits of our new Tech stack in terms of improved speed.

Next debility personalization regionalization and cost of development will drive performance in <unk>.

Furthermore, in H two of fiscal year 2024, we will also start to fully benefit from our new distribution center in Leipzig, and direct adjacency to the international Airfreight hub of DHL.

Martin Beer: With this strong growth, we clearly meet market expectations, delivering again superior growth above peers. Also at constant currency, GMV grew by an impressive 12.1%. Our growth continues to be driven by expanding our highly valuable top customer base. The number of top customers grew 24% in the quarter and the average spent increased as well by plus 4% of GMV per top customer. For the full fiscal year 23, GMV grew by 14.5% to 855.8 million as compared to 747.3 million in the prior year.

In terms of speed of delivery and processing efficiencies.

Finally, we're also aware.

With our spring summer 2004 season.

The amount of orders inventory by many players with significantly reduced.

Which will reduce the promotional and margin pressure in <unk>.

Therefore, we expect for each to a topline growth acceleration of 600 to 800 basis points over each one compared to last year figures.

And an adjusted EBITDA margin improvement of 50 250 basis points from H, one to H two.

Martin Beer: This is also above expectations. Over the full fiscal year, we grew our top customer base by 25%. In addition, we also saw a strong increase by of GMV per top customer by 4.3% on average. In the last three years, we were able to grow our top customer base by 136%, which now generates 38.5% of our total revenues. In fiscal year 23, we grew our total customer base by 9.6% and achieved a higher performance per customer as reflected by the 4.7% growth in GMV per customer.

H two will therefore be clearly on the upper end of our guided ranges for fiscal year 'twenty four.

Given the above and due to the current macro headwinds heavy promotional environment. That's still early stages of our new infrastructures.

We expect our Q1 top line performance below the guided range only slightly above prior year.

In the same way, we also expect adjusted EBITDA to be.

Marginally negative in Q1.

This is already reflected in our full year guidance for fiscal year 'twenty four.

Martin Beer: Our average auto value increased by 28 euros, first shipment delivered to a record high of 654 euros. The continuous increase in AOV in the past quarters and years clearly improves auto-economy, and reflects our successful focus on full-press selling and operating in the sweet spot of high-end luxury. Total order shipped during the last 12 months increased by 14%, breaking the 2 million marks for the first time. Our superior positioning, which is especially attractive to our top customers, this is also visible in our performance in the US.

We remain very confident for the medium and long term outlook for our business.

We are currently gaining market share.

We have just completed two major infrastructure milestone.

We will thus benefit over proportionately more quickly.

On the luxury market leaves behind the current economic challenges.

Which it usually does very fast.

Our market position is getting stronger every month.

During this fiscal year.

And beyond you will see a fortification of our leadership position in.

In multi brand luxury.

Building the most successful luxury powerhouse.

Luxury customers and the top luxury brands.

Martin Beer: Despite being a highly competitive market, the number of our top customers in the US grew by 64% during the last quarter. The number of first-time buyers in the US grew by 44%. The US in total grew by 41% GMB in the quarter and now makes up 19% of our business. We are expanding our leadership position worldwide and are continuing to grow in Europe and other parts of the world. It is important to note that due to our full-press focus, asset-like business model and strict cost management, we enjoy similar profitability margins worldwide and benefit from capturing growth opportunities in any region of the world.

I will now turn the call back over to Michael for his concluding remarks.

Thank you Mark we're very pleased with our fourth quarter and full fiscal year 2023 earnings results.

See ourselves well positioned to achieve our fiscal year 2024 guided targets despite challenging macro environment.

We will continue to benefit from the ongoing shift to online luxury spin.

The increasing importance of the big spending customer segment and the desire by brand partners to work with only the best digital platforms in the markets we.

We are confident.

That mitel laser offers high value customers the best multi brand digital shopping experience there is.

Martin Beer: We are committed to delivering consistent and robust growth, which is unique in the industry. Our high-end and inspiration focused positioning, attracting primarily top customers pays off and shields us from slow down effects of aspirational customs. As we face very challenging and uncertain macroeconomic times, we remain cautiously optimistic for the full-fiscal year 2024, which runs until June 24 and expect GMB growth of 8 to 13%. We also delivered net sales performance above expectations.

And with that I'll ask the operator to open.

The line for your questions.

Thank you we ask that you limit yourself to one question and one follow up. Please if you have a question. Please press star one on your telephone keypad, if you wish to remove yourself from the queue simply press Star One again one moment. Please for your first question.

Yes.

Your first question comes from the line of Matthew Boss of Jpmorgan. Your line is open.

Great. Thanks.

Michael could you elaborate on drivers of the regional strength that you saw in the U S and speak to notable demand trends that you've seen so far in the first quarter by region. The bill to your outlook for slight growth.

Martin Beer: For the full-fiscal year, net sales were at 768.6 million and 11.4% increase from 689.8 million in the prior year. As a reminder, we expect ongoing deviations in growth rates of GMB and net sales as different brands operate either under the system. This is because the individual performance of a brand in the overall luxury market may differ each quarter and season, independent of the brand operating with us under the wholesale model of the CPM.

Thank you Matt.

Yes, our growth in the U S was quite extraordinary and we.

We clearly see that our global strategy of focusing on high net worth.

The vigils peak water spenders is paying off also in in this market as cited by the almost 60% increase of customers supply.

Martin we have increased our presence in the market. We have now for some shoppers in the market. We are present at this event.

We are present with styling suites and.

As often mentioned this may sound more like a grass root, but it is a very targeted approach.

Martin Beer: At net sales, we only book the commission fee of our CPM revenues. During the quarter from April to June, net sales increased by 16.5% to 203.8 million as compared to 174.8 million in the prior period. The higher growth rate in net sales is due to several wholesale brands performing better than some individual CPM brands. Remember, performance of a wholesale brand is to 100% reflected in GMB and 100% in net sales. Performance of a CPM brand is 100% reflected in GMB, but only its commission rate is reflected in net sales.

And when you do the right event in Arkansas in Aspen.

In North Carolina in Miami, La and San Francisco. It pays off in addition of course with bigger events like the one we did four five weeks into.

This is what drives this high end of the market.

In regard to Q1.

It is evident that.

The other big trend that has been discussed for a while the endless vacation trend is also affecting a player like us people on vacation.

Not.

Buying as much online and August was a global vacation months not only for U S consumers traveling abroad, but also Chinese consumers starting to travel abroad at least in Asia and somewhat.

Martin Beer: Therefore, above average strength of several wholesale brands results in net sales growing even faster than GMB. Going forward, we expect that those growth differences between GMB and net sales will not be significant. And therefore, for the full fiscal year 24, we also expect net sales growth in the range of 8 to 13% similar to the GMB growth. As of Q4 fiscal year 23, we have seven major fashion brands operating seamlessly under the CPM.

In Europe .

So we continue to see.

The slowness of aspirational consumers, no change that and with <unk>.

The big or amplifications, now ending VLCC the returns.

Hi.

Vendors, but the.

The market is clearly driven by a lot of uncertainties.

You are in a better position, but I, just named Derby Street market in China.

Inflation ongoing inflation in Europe , which may require ongoing interest rates increases the upcoming election in the U S. So while our core consumer.

Martin Beer: We provide full flexibility to our brand partners and can offer both models in our collaboration efforts and expect that one or two brands will switch from the whole fair model to CPM each fiscal year. Growth profit during the quarter and for the full fiscal year with above market expectations at 99.9 million and 382.6 million respectively growing at 7.8% for the full fiscal year. The continuously high growth profit margin of 49% during the quarter saw a stable gap in operating growth profit margin of 320 basis points versus last year, which we explained already in the quarter before.

Absolutely resilient as proven by a quarter, where we grew where other shrank.

We are cautious for the outlook.

What we wanted to rather.

Surprise positively than negatively going forward.

Thanks, and then Martin on the cadence of the year could you just help walk through considerations for top line and gross profit margin.

Bedded in your full year outlook as we break down the first half versus the second half of the year.

Yes happy to do so because there are some some some overlaying.

Affects that I called out I mean first of all.

If you look at the past years and that will also happen in this fiscal year 'twenty for Q1, and Q3 are usually the weaker quarter.

Martin Beer: If you compare the achieved growth profits to GMB for this and last year's quarter and exclude technical effects in the margin calculation, which I will explain later, the operative growth profit margin slippage was around 330 basis points. This is exactly in line with our forecast and guidance and it indicates that the effects of the heavy promotional environment are now stable and manageable. We expect this effect to significantly narrow towards the end of calendar year 23.

Driven by a lower gross profit margin and a lower EBITA margin.

<unk> and a lower gross profit on the EBITA margin in Q2, and Q4 are usually stronger quarters, but this year also as an overlay.

We expect each to to be.

Stronger than H one.

Given given the factors that our two infrastructure projects are really kicking in April may.

We we fully migrated to our new it platform.

With minimal disruptions.

Martin Beer: Already in the current quarter, we see a decrease in the margin gap. In addition, around 200 basis points, growth profit margin decrease compared to the reported growth profit margin of last year is a more technical result based on net sales growing stronger than GMB outlined before. As the reported growth profit margin is in relation to net sales, it showed a decline of 520 basis points. This is due to several wholesale brands growing stronger than some individual CPM brands and therefore net sales was growing faster than GMB.

And then September we are now ramping ramping up or.

Completely new warehouse.

At at the Leipzig Airport, which will also.

Give us a lot of.

Customer benefits and operational efficiencies.

And as we talked about before the spring summer 'twenty four.

Buying that we that we see in the market is.

As a complete different level than that spring summer 'twenty three of <unk> 23 to a certain extent. We're so we are much more optimistic for <unk> and that's why we also and then expect that our topline growth levels are.

Martin Beer: Therefore, the CPM share for this quarter is not comparable to the same period last year, here. Comparing the gross profits to GMV gives you a fair review on the margin development. Here we saw the 330 basis points margin slippage, which is stable and was expected as noted in our last earnings call. At the end of the day, the absolute gross profit achieved in the quarter, which was at 99.9 million outperformed expectations.

Higher in age to 600 related basis points stronger growth in <unk>.

Then H, one and also the bottom.

At the bottom line and therefore, it was important for US also given the endless vacation logic and other factors that we're seeing in the current quarter.

To call out that Q1 will be a weak quarter.

Top line growth in line with.

Martin Beer: As there will be performance differences of individual brands operating under the wholesale model of the STPM, the reported gross profit margin will be affected from this mathematically in certain quarters. Our focus remains on growing the absolute gross profit figure and for fiscal year 24, we expect gross profit to also grow 8 to 13 percent in line with top line growth. For the full fiscal year 23, gross profit grew by 7.8 percent to 382.6 million above expectations.

At the same level as previous year.

And EBITDA.

Adjusted EBITDA marginally negative.

And so.

Q2.

October November December of this calendar year, our Q2 fiscal year.

We will then be stronger but still.

Influenced by.

But we expect still heavy promotional environment, and then Q3 and Q4 starting in January given all.

The information above.

<unk> is then really kicking in and is then the start for us.

Martin Beer: The gross profit margin is at an industry leading level of 49.8 percent. Our focus on full price selling combined with our high end positioning remains unchanged. The shipping and payment cost ratio in Q4 remains stable at 13.9 percent compared to the prior year quarter. This is a remarkable success considering we continue to broaden our customer based worldwide and experienced cost pressures. Our net sales share outside your increase from 41 percent to 44 percent.

Then.

Coming back to top and bottom line.

Formats that we used to.

Just to experience.

Thanks for the color and best of luck.

Your next question comes from the line of Oliver Chen of Cowen. Your line is open.

Hi, Thanks, a lot on your comments on the aspirational consumer what percentage mix approximately and how do you see this evolving in on the context regarding the extraordinary promotional environment. How are you embedding merchandise margins and promotions versus last.

<unk> a lot of this maybe out of your control how competitors, who are less well capitalized may respond so wanted to understand those risk factors.

Martin Beer: The stability and the cost ratio mirrors our successful implementation of further cost efficiencies while improving our high performing worldwide customer payment and duty setup. For the full fiscal year 23, the shipping and payment cost ratio increased slightly by 30 basis points to 13.4 percent.

Have a lot of great momentum in the U S. DC distribution center in the U S seems like a nice opportunity to elevate the customer service and speeds just wondering how that may fit into your roadmap as well. Thank you.

Martin Beer: My Theresa is able to deliver double digit top line growth rates which is unique for our industry and in this environment. We are investing in capturing market share and growing our top customer base. In Q4, we continued our marketing efforts as we saw successful high potential in the new customer acquisition and top customer attention. During Q4, marketing expenses rose by 5.6 million reaching 32.1 million which led to 100 basis points increase in the marketing cost ratio.

Thank you Oliver.

On your first question I mean, our.

Top customers that have sort of fully developed to two top customers data is account for 40% of our business, but of course in the remaining 60.

Also a lot of top customer potential based on our.

Quite good even though not 100% reliable targeting but they haven't fully developed so.

It's our top customer shares over 40% because we.

Martin Beer: The increases also due to a shift effect of customer events held as it is comparing against the low comp in the prior year quarter. For the full fiscal year, marketing expenses were 112 million for an almost stable marketing cost ratio of 13.1 percent, 20 basis points increased from 12.9 percent in the prior year period. Once again, we were able to keep the marketing cost ratio stable. We continue our successful approach in increasing top customer marketing efforts and events while being efficient with online marketing activities geared towards first-time buyers.

Each season each months.

<unk> new cohorts.

The aspirational customer share.

Difficult to guess, but we were out there already with numbers.

At between 25, and 35% up from the customers that buy only once or twice.

This slow down how long will it continue on the aspirational customer it's hard to tell.

Again, I think we are in the cycle here in the fashion cycle overlaid with a strong economic cycle.

Maybe.

Also different by geography.

There are some assumptions that you estimate actually deal.

So we're not out of that cycle, but the main message to remember is because of our.

Martin Beer: Our flexible business model allows us to quickly modify our approach, especially looking at our over 100 million marketing spend is the macroeconomic environment where to change dramatically. Adjusted setting general administrative expenses only grew marginally by 2.2 million to 28.3 million during the fourth quarter. Adjusted SNA as percentage of GMB decreased significantly down by 60 basis points to 12.7% as compared to 13.3% in the prior year quarter, despite plus pressures in the market.

Focus on the high end not just for the last 12 months for four years, which has been our approach we can litigate slowness in that one customer segment.

Strong role because otherwise, we would not be able to deliver double digit growth and also we would not be able.

To deliver a 40% increase in the U S, which is the <unk>.

Market that probably have seen the.

Strongest reversal off off of.

Expiration consumables.

In terms of the margin pressure promotional intensity, yes.

We are expecting that the fall winter season that the Christmas season, we'll be again very promotional heavy.

Martin Beer: We are diligently looking at cost efficiencies and cost leverage in all departments and will ensure that my Theresa continues its overall profitable growth path even in unique times like now. Looking at the full fiscal year, adjusted SNA expenses rose by 18.8 million to 12.2 million with a slight increase of 60 basis points in the SNA expense ratio to 13.1%. In Q4, fiscal year 23 adjusted even though was 7.4 million above market expectations within adjusted EBITDA margin of 3.6%.

We do not believe that there was a lot of inventory correction for fall winter 2003, yet we expect that more for spring Summer 2004. This is also one of the drivers that Martin referred to why we clearly see <unk> being strong.

Sure then H, one and our tactic for that has always been.

We need to focus on the full price we need to to sale as.

As.

Awesome.

<unk> guidance makes sense, we want to attract the right customer a lot of promo intelligent store.

So why we also feel the pressure of the higher promotional intensity as explained by by molten.

Martin Beer: For the full fiscal year, adjusted EBITDA was at 41.1 million, representing an adjusted EBITDA margin of 5.3%. Our consistent track record of reporting positive adjusted EBITDA exemplifies the robustness and resilience of our business model. We consistently deliver outstanding industry leading performance both in terms of top and bottom line results, setting a unique benchmark in the industry. There are no structural barriers in our business model or market positioning to prevent us from achieving the profitability levels we experienced in the last years over the medium term.

We can work with that pressure as we've done the last two quarters and we'll continue to do so for the remainder of this calendar year.

Then.

Hopefully.

We see a better environment.

And we are then in a perfect position because of the continued investments that we can afford with our financial.

<unk> and technology and distribution center to your last point, yes, you're right.

With this new distribution center in Leipzig, hopefully fully up and running.

H two of this fiscal year, we continue on our always outlined drove map that in addition to warehousing in Germany, we will.

Martin Beer: For fiscal year 24, given the current macroeconomic uncertainties and the extraordinary promotional environment, we prudently guide towards an EBITDA margin of 3.5%. As in the past, we are confident to strike the right balance between strong growth and above market profitability. Our end-to-end profitability throughout the P&L continues to be visible at both the adjusted operating income and adjusted net income levels. In fiscal year 23, adjusted operating income amounted to 29.4 million, with an adjusted operating income margin of 3.8%.

Over the course of growth.

Setup regional distribution centers and given that the U S has become the strongest drivers of growth. The U S is a prime candidate for regional distribution centers.

Thanks.

Your next question comes from the line of Kunal.

<unk> of <unk>.

Your line is open.

Alright, Thanks for taking my question.

Quick one on <unk>.

The rest of the year I wanted to understand maybe two into fiscal 'twenty four wanted to understand what your purchases.

Likely to be.

Because sales would be constrained by your strategy.

Martin Beer: Adjusted net income amounted to 20.3 million, resulting in an adjusted net income margin of 2.6%. In Q4 of fiscal year 23, we had a positive operating cash flow of 28 million, and a positive free cash flow of 24 million. This is above previous year levels, and was achieved despite the continuous ramp up of our new logistics center in LifeFig, of which more than 75% of CAPEX has been paid. We finished a fiscal year with no bank debt, no utilization of the 60 million working capability revolver, and 13 million cash from hand.

Full price being brand friendly.

So if steel remains low and understand how we should think about inventory trends.

Our fiscal 'twenty, four and then and how the purchase strategy.

Plays into that.

But Martin do you want to respond.

Martin.

Otherwise I do but.

Oh, sorry, yes, sorry, I was on mute sorry about that obviously happy to happy to answer Kunal I mean as stated last quarter, we have looked early.

At fall Winter 2003 purchase commitments and adjusted.

Martin Beer: This gives us a solid financial strength, compared to other players in the industry. Because of our cash and balance sheet strength, we're managing our immature levels for profit maximization. We're not forced into short-term cash generation as some other players in the industry, which will create manifold issues for them in the medium term. Our overarching focus is to attract and retain the right customer cohorts, with focus on full price, being mindful of brand relationships, and preventing undue inventory aging.

Where appropriate.

Right now.

Over 90% of covered to 'twenty three has already been delivered.

So we have a clear view on forward to deliveries.

And.

And the.

Talked about that the spring summer 'twenty four purchase commitments.

Have been adjusted even stronger and we also expect that from other players that they had reduced.

Spring Summer 'twenty four purchase commitments significantly and that is why we expect the promotional pressure in 2004 to be significant.

Martin Beer: With this approach and our inventory outstanding of around 260 days from the current 302 days in the medium term. The current inventory position does not create any concerns for us, because first, the June level is elevated to early deliveries compared to last year. We have 800 basis points of 20 million euro of earlier fall into deliveries compared to last year. Second, previous year is influenced by merchandise, buyback programs, with CPM brands, and therefore there was a unique stock reduction in last year.

Sure.

And as I called out yes, our.

Days inventory outstanding are elevated at 302 days instead of our targeted.

260 days and we are managing to achieve that number again in the medium term.

And.

We are we're very confident that that.

This will enable us to pursue and remained constant focus on our strategy.

As Michael called out full price, driven and attracting and retaining the right customer cohorts.

Great. Thanks, and then as.

As we look at the growth in the second half and you called out topline growth.

Six to 800 bps incremental or.

Martin Beer: Third, 80% of our inventory covers the current and upcoming seasons. With our full price and high end positioning and luxury, we are able to achieve the target itself rates over a much longer period than peers. As a reminder, we usually achieve a sell-through of 95% over 21 months. Please also bear in mind that unlike others, we are successfully achieved and continue to target double-digit growth rates, enabling us to clear out additional merchandise.

Yeah.

Page two of 23, so each.

We get we get the <unk> and <unk> the comp is so much easier.

You should naturally see some acceleration from Q1 levels, but the comps in the second half are slightly tougher.

What gives you the visibility or the confidence to be able to kind of talk about 6% to 800 points.

Six to 800 bps.

Growth acceleration.

Versus versus.

Martin Beer: In addition, we operate at an industry-leading growth profit margin of around 50% and reported a growth profit margin slippage of only 170 basis points last fiscal year. We ended the 12-month period of fiscal year 23 in a strong financial position with cash and cash prevalence of 30.1 million, no bank debt and a total unused availability under the role of accredited facilities of 60 million as of June 30, 23. We have fully paid inventory in our warehouse, and the remaining capex of the Laptop warehouses is only around 8 to 10 million euro and 50 a 24.

Yes, a quick one I'll happy chance that the 600 to 800 basis points.

Both acceleration was in relation to H one.

So it was not that I am targeting to surpass the H two fiscal year 'twenty three growth in H two fiscal 'twenty four but.

If I look at H, one of fiscal year 'twenty four.

And then obviously during the course of fiscal 'twenty four.

And then obviously the topline growth will accelerate so H two compared to X one over the prior year period.

And that is you can solve that equation.

Specially looking at.

Martin Beer: In addition to our high free cash role conversion in our business model with double-digit growth rates, we have a favorable cash cycle with our CPM partners. As we only pay them weeks after we receive the payment from the customer, and we bear no inventory risk in the CPM model. We are therefore in a great position to fuel our double-digit top-line growth and are able to adjust short-term if the macroeconomic situation were to change dramatically. We are proud of our continued profitable growth story, even in a very difficult market environment like now.

Our past performance.

Double digit growth company.

What is holding us back is the current and an hour perspective.

Short term with the short term focus the effects that have a short term focus driven by excess inventory in the market that is especially focused on calendar year 'twenty three.

And then 'twenty two for calendar year 'twenty four starting with January it will it will have a different perspective on the inventory. In addition to the benefits of the two infrastructure topics that we completed and are now ramping up and with pool have full benefits.

In <unk> fiscal year 2004.

Got it thank you so much.

Martin Beer: We believe that for the full calendar year 2023, macroeconomic uncertainties will continue for sure, with us cautiously optimistic for fiscal year 24, and our guiding GMV net sales growth between 8 to 13 percent, growth of a growth between 8 to 13 percent, and adjusted even the margin between 3 percent and 5 percent. As seen in prior years, please remember that our quarterly performance varies due to seasonality. Q1 and Q3 of our fiscal year are the weaker quarters, whereas Q2 and Q4 are usually stronger.

Thank you.

Your next question comes from the line of Blake Anderson of Jefferies. Your line is open.

Hi, Good morning, I wanted to ask on gross margin apologies, if we missed it but did you say how much margin expansion or contraction youre anticipating for gross margin next year and then if you could talk about.

The gross margin expectations in Q1, as well and maybe the trajectory just looking for a little bit more color on that line item.

Yes.

Happy to do so.

Most profit overall.

In length.

Talked about the gross margin definition and the influence obviously on the.

Denominator on the cross on the GMB versus net sales effect, So cross margin may differ.

Martin Beer: But this year, in addition, we expect a much stronger H2 versus H1 performance. Michael already talked about leveraging our new technology platform for growth and margin improvements. The benefits of our new tech stack, in terms of improved speed, flexibility, personalization, regionalization, and cost of IT development, will drive performance in H2. Furthermore, in H2 of fiscal year 2024, we will also start to fully benefit from our new distribution center in Leipzig in direct adjacency to the international air freight hub of DHL, in terms of speed of delivery and processing efficiencies.

But the overall logic on the gross profit on the absolute gross profit is that we guide that.

The gross profit growth absolute growth per vehicles is fully in line with our topline growth.

The first.

Experience important topic.

And.

In Q1.

If a guide towards a.

Marginally negative EBITDA.

EBITDA as always.

Very much driven in our business model by the gross profit.

Margin, so to say or gross profit.

The absolute gross profit so also in Q1.

We expect.

Gross profit margin.

Martin Beer: Finally, we're also aware that with a spring summer 24 season, the amount of ordered inventory by many players was significantly reduced, which will reduce the promotional margin pressure in H2. Therefore, we expect for H2 a top-line growth acceleration of 600 to 800 basis points over H1 compared to last year figures, and an adjusted EBITDA margin improvement of 50 to 150 basis points from H1 to H2. H2 will therefore be clearly on the upper end of our guided ranges for fiscal year 24.

Slippage that will lead to that marginally.

Negative.

EBITDA so gross profit gross profit.

Is that in line with top line.

Growth in deviations throughout the quarters.

That I that I called out.

Just now.

It will it will fluctuate given also the seasonality of.

What I said about Q1, and Q3 being lower in Q2 for Q2 and Q4 being stronger also on the cost profit margin side.

Adjusted EBITA margin.

Got it and.

Martin Beer: Given the above and due to the current macro headwinds, heavy promotional environment and still early stages of our new infrastructures, we expect our Q1 top line performance below the guided range only slightly above prior year. In the same way, we also expect adjusted EBITDA to be marginally negative in Q1. This is already reflected in our full year guidance for fiscal year 24. We remain very confident for the medium and long-term outlook for our business.

Are you guiding in all by region, just wondering how much you expect the U S region to the momentum there to continue next year, how that might be soccer and <unk> expectations.

We're not guiding on.

On certain regions.

But we don't anticipate any dramatic changes.

As Michael called out the U S will continue and it has been in the last quarters and years.

Top growth.

Top growth region.

China being being spotty and.

A bit a bit unclear how that will come back to normal levels. We are strong in Europe , and we will also see in targeted they're.

Martin Beer: We are currently gaining market share. We have just completed two major infrastructure milestones. We will less benefit over proportionally and more quickly when the luxury market leaves behind the current economic challenges, which it usually does very fast. Our market position is getting stronger every month.

Double digit.

Double digit growth rates so the overall.

Logic that we've seen in Q4 and fiscal year 'twenty. Three is expect is expected to to continue more or less I think right now the U S is very strong.

And.

Michael Kliger: During this fiscal year and beyond, you will see a fortification of our leadership position in multi-brand luxury, building the most successful luxury powerhouse for the top luxury customers and the top luxury brands.

But overall, we don't see.

Immediate shifts and what we what we have been seeing in the last quarters.

Your next.

Comes from the line of <unk> Sinha.

<unk>.

Michael Kliger: I will now turn the call back over to Michael for his concluding remarks. Thank you, Amanda. We are very pleased with our fourth quarter end for the fiscal year 2023 earnings results. We see ourselves well-positioned to achieve our fiscal year 2024 guided targets despite challenging macro environment. We will continue to benefit from the ongoing shift to online mastery spend, increasing importance of the big spending customer segment, and the desire by brand partners to work was only the best digital platforms in the markets. We are confident that Maitreza offers high value customers the best multi-brand digital shopping experience there is.

Your line is open.

Yeah, Hi, Thanks for taking my question just one thing on the on the graph.

And on.

On the inventory you saw on the gross profit you said that by two words by calendar. One at 24, you expect promotional activity to subsidize so.

Vital guide a stable margin in northern expansion. So that's the first one and second is on the inventory I see that it was.

More than 100 million drag on cash flow so how should we.

Look at the inventory for <unk>, four so will it be back to the normal.

250 to 300 million level or any color on that would be very helpful. Thanks.

Yeah.

Yes, hi, I have enough.

Turning to take that up.

Operator: With that, I ask the operator to open the line for your questions. Thank you.

On the on the can you hear me.

Yes.

Yeah, Okay, sorry on the on the inventory side, yes, I mean, we are being mindful of managing our inventory levels not driven by short term.

Operator: We ask that you limit yourself to one question and one follow-up, please. If you have a question, please press star one on your telephone keypad. If you wish to remove yourself from the queue, simply press star one again. One moment, please, for your first question.

Cash flow growth.

But really.

Thinking about attracting and retaining the right customer cohorts.

Thinking about brand relationships, but also obviously, preventing undo inventory aging.

Matthew Boss: Your first question comes from the line of Matthew Boss of JP Morgan. Your line is open. Great, thanks.

And.

That implies that this will not change dramatically short term so we have elevated inventory levels.

Michael Kliger: Michael, could you elaborate on drivers of the regional strengths that you saw in the US and speak to notable demand trends that you've seen so far in the first quarter by region that built to your outlook for slight growth? Thank you, Matt. Our growth in the US was quite extraordinary and we clearly see that our global strategy of focusing on high net-verse individuals and big wardrobe spenders is paying off also in this market as cited by the over 60 percent increase of customers by Martin.

Best measured in inventory days outstanding of 302 days, and we will have to come back to 260 days.

We also called out that the inventory level.

Could you point to is elevated because of early deliveries so that will level out to the end of the season.

But also that the prior year.

It was obviously influenced by by merchandize buyback programs.

And a unique.

Stock reduction because if you look at the cash flow statement of last year.

Michael Kliger: We have increased our presence in the market. We have now personal shoppers in the market. We are present as events. We are present as styling sweeps and as often mentioned, this may sound more like a grassroots, but it is a very targeted communal approach and when you do the right event in Arkansas, in Aspen, in North Carolina, in Miami, in LA, in San Francisco, it pays off. In addition, of course, with bigger events like the one we did for five weeks, we are now at the end of the day.

I mean despite.

Despite the strong growth.

That we had last year, we had a positive cash inflow on inventory so less inventory. So obviously there is a previous year effect in the growth of the inventory levels. If you just look up the look up the share growth.

And also bear in mind, yes, 80% of the inventory is current and upcoming seasons and with our full price approach.

Michael Kliger: We are now at the end of the day, in the hampons. I mean this is what drives this high end of the market. In regard to Q1, it is evident that the other big trend that has been discussed for a while, the endless vacation trend is also affecting the player like us. People on vacation are not buying as much online and August was a global vacation months. Not only for US consumers traveling abroad, but also Chinese consumers starting to travel abroad, at least in Asia and somewhat in Europe.

High end positioning we are able to achieve.

Through rates.

Or has the sell through rates over a much longer period, usually 95% over 21 months.

So the inventory levels will continue to stay elevated.

We're not managing that quarter to quarter, but more on a on a.

On a medium term outlook in a healthy way that is healthy for our positioning and our.

Business model.

Without hurting.

The P&L.

Or our our positioning.

Michael Kliger: So we continue to see the slowness of aspirational consumers, no change that. And with the big or endless vacations now ending, we also see the return of the high big spenders. But the market is clearly driven by a lot of uncertainties. You are in a better position, but I just named the logistic marketing China, the inflation, ongoing inflation in Europe, which may require ongoing interest rates increases the upcoming election. So while our core consumer is absolutely resilient as proven by a quota, where we grew, where other shrank, we are cautious for the outlook and want to rather surprise positively than negatively going forward. Thanks.

Okay.

On a gross profit margin.

Sure.

There we have to see how the gross profit margin will evolve and age and age to select clear guidance as I called out in each one but H two.

<unk> is obviously also on the gross profit margin side better than.

Other than the H one.

And we are very confident on on.

Seeing a positive trend there.

How it will play out.

We have to see.

We I mean.

We are definitely standing true to our high end positioning to a full price focused.

And that is key and everything what we what we do.

Okay.

And just to be sure on the EBITDA you said the two inch 24 will be 50 to 150 basis points higher than one one it's 24 is that correct understanding.

Martin Beer: And then Martin, on the cadence of the year, could you just help walk through considerations for top line and gross profit margin embedded in your full year outlook as we break down the first half versus the second half of the year? Yeah, I'm happy to do so because there's some overlay effects that I called out. I mean, first of all, if you look at the past years and that will also happen in this just year 24, Q1 and Q3 are usually the weaker quarter driven by a lower cost profit margin and lower EBITDA margin, resulting in a lower cost profit and lower EBITDA margin.

Exactly exactly.

Okay Yeah.

Thanks, Mike.

Thank you.

And your last question comes from the line of Jan Gal.

Your line is open.

Thanks for taking my question.

My question is.

Obviously, we achieve a very high.

Physical venues rate despite the promotional pressure and I believe this was mainly due to the strong performance of the top customers and also right.

Martin Beer: And Q2 and Q4 are usually the stronger quarters. But this year, also as an overlay, we expect H2 to be much stronger than H1 given the factors that our two infrastructure projects are really kicking in. April, May, we fully migrate to our new IT platform with minimal disruptions. We, and then September, we are now ramping up our completely new warehouse at the Leipzig airport, which will also give us a lot of customer benefits and operational efficiencies.

Yes.

But in the future, maybe let's say next year as the microenvironment around and other customers, including the aspirational customer might come back and all.

Is that more and more market share.

Even more balance between our top customers and.

Therefore with LIBOR.

That's over the long horn.

Any ballpark numbers with us.

Our margin thank you.

Okay.

Thank you for that.

Yes in principle, you have a correct argument aspirational customers coming back will in the industry probably lower.

Again.

And our logic number one ask.

Operational customer we are unfortunately not.

Martin Beer: And as we talked about before, the spring summer 24, buying that we see in the market is as a complete different level than spring summer 23 following the 23 to certain extent, where. So we are much more optimistic for H2 and that's why we also and expect that our top line growth levels are higher in H2, six on a created basis, points stronger growth in H2, than H1, and also the bottom line.

Still some seasons, maybe away from that so our fiscal year 2000 core is not expecting.

Return of all exploration customers and.

The continuous increase of our <unk> has also been a rich.

<unk> on our continues.

Focus of our whole assortment on the top end customer in terms of additional categories and additional.

More expensive items, so I think the.

Trend off.

Increasing <unk>.

Our long term objective.

Getting our share of top end customers.

Martin Beer: And therefore, it was important for us, also given the end of location, logic, and other factors that we're seeing in the current quarter to call out that Q1 will be a weak quarter. Top line growth in line with, I mean, on the same level as previous year, and even the adjusted EBITDA marginally negative. And so Q2, October, November, December of this calendar year, our Q2 fiscal year will then be stronger, but still influenced by the, but we expect still heavy promotional environment, and then Q3 and Q4 starting in January, given all the information above, is then really kicking in, and is then the start for us to then coming back to top and bottom line performance that we're used to, that we're used to experience.

A big return for Aspira.

Aspirational customers may.

Lower slow down the increase but we don't see a reversal coming and in terms of margin.

The.

As we don't see a decrease.

Lower <unk> in the next years I don't see any impact of <unk> or unit economics of our margin.

On the contrary with the huge investments in technology and the huge investments in the infrastructure like the warehouse and will actually continue to create more efficiencies independent of <unk>, just by being much more productive in operating our business.

Got it thank you.

There are no further questions at this time, we thank you for participating in today's call. This concludes today's conference call you may now disconnect.

[music].

Matthew Boss: Thanks for the color, best of luck.

Oliver Chen: Your next question comes from Lane of Oliver Chen of Cowan. Your line is open. I think so, but on your comments on the aspirational consumer, what percentage mix is that approximately, and how do you see this evolving, and on the context regarding the extraordinary promotional environment? How are you embedding merchandise margins and promotions versus last year? A lot of this may be out of your control how competitors who are less well capitalized may respond, so I wanted to understand those risk factors.

Oliver Chen: You have a lot of great momentum in the U.S. DC distribution center in the U.S, seems like a nice opportunity to elevate the customer service and speed, just wondering how that may fit into your roadmap as well. Thank you. Thank you, Oliver. On your first question, I mean, our food top customers that have sort of fully developed to food to top customer status account for 40% of our business, but of course, in the remaining 60, we have also a lot of top customer potential based on our quite good, even though not 100% reliable targeting, but they have fully developed.

Okay.

[music].

Oliver Chen: So it's our top customer shares over 40% because we have each season, each once we get a new cohort. The aspirational customer share, difficult to guess, but we're out there already with numbers that between 25 and 35% are probably customers that buy only once or twice. This slowdown, how long will it continue on the aspirational customer? It's hard to gauge, I think we are in a cycle here in the fashion cycle.

Okay.

[music].

Oliver Chen: Overlaid was a strong economic cycle. Maybe also different by geography. There are some assumptions that the US may actually be sooner out of that cycle. But the main message to remember is because of our focus on the high end, not just for the last 12 months, for years, this has been our approach. We can litigate the slowness in that one customer segment with strong growth, because otherwise we would not be able to deliver double digit growth.

Oliver Chen: And also we would not be able to deliver 40% increase in the US, which is the market that probably has seen the strongest reversal of. Of the aspiration of consumers. In terms of the margin pressure, promotional intensity, yes, we are expecting that the fall winter season, that the Christmas season will be again very promotional heavy. We do not believe that there was a lot of inventory correction for winter 23 yet. We expect that more for spring summer 24.

Oliver Chen: This is also one of the drivers that Martin referred to why we clearly see H2 being stronger than H1. And our tactic for that has always been we need to focus on the full price. We need to do sale as as as as profit wise guided makes sense. We want to attract the right customer not a formal and pension customer. And so why we also feel the pressure of the higher promotion density as explained by Martin.

Oliver Chen: We can work with that pressure as we've done the last two quarters and will continue to do so for the remainder of this calendar year. And then hopefully we see a better environment and are and we are then in a perfect position because of the continued investments that we can afford with our financial position in technology and in distribution. And to your last point, you have to write with this new distribution center in life. Hopefully fully up and running by H2 of this fiscal year. We continue on our always outlined roadmap that in addition to housing in Germany, we will over the course of growth set up regional distribution center.

Michael Kliger: And given that the U.S, has become the strongest driver for growth, the U.S, is the prime candidate for regional distribution centers. Thank you.

Kunal Madhukar: Your next question comes in line of Kunal Madukar of UBS. Your line is open. Hi, thanks for taking my question. A quick one on on the rest of the year wanted to understand and maybe into into fiscal 24 wanted to understand what your purchases are likely to be because sales would be constrained by your strategy of being full price, being brand friendly. So if sales remains low, help me understand how we should think about inventory trends for fiscal 24 and then, you know, and how the purchase strategy kind of plays into that.

Kunal Madhukar: Martin, do you want to respond? Martin? Otherwise, I do. Sorry, yeah, sorry, I was on mute. Sorry about that. Obviously, happy to answer, Kunal. I mean, as stated last quarter, we have looked early at fall into 23 purchase commitments and adjusted where appropriate. I mean, right now, over 90 percent of fall into 23 has already been delivered. So we have a clear view on fall into deliveries and the talk about the spring 724 purchase commitments have been adjusted even stronger and we also expect that from other players that they had reduced their spring 724 purchase commitments significantly.

Kunal Madhukar: And that is why we expect the promotional pressure in 24 to be significantly lower. And as I called out, yes, our days inventory outstanding are elevated at 300 days instead of our targeted 260 days and we are managing to achieve that number again in the medium term. And we are very confident that this will enable us to pursue and remain constant focus on our strategy, as Michael called out, full price driven and attracting and retraining right customer cores.

Martin Beer: Great, thanks. And then as we look at the growth in the second half, and you called out top line growth in the 6 to 800 BIPs, incremental over H2 of 23. So we get the 1Q and 2Q, the comp is so much easier. You should naturally see some acceleration from Q1 levels. But the comps in the second half are slightly tougher. What gives you the visibility or the confidence to be able to kind of talk about 6 to 800 points, 6 to 800 BIPs growth acceleration versus yeah.

Martin Beer: Yeah, I could for a happy chance that the 6 to 800 BIPs growth acceleration was in relation to H1. So it was not that I am targeting to surpass the H2 physically at 23 growth in H2 physical 24. But if I look at H1 of physical 24, and then obviously during the course of physical 24, then obviously the top line growth will accelerate. So H2 compared to H1 over the prior year period.

Martin Beer: And that is, you can solve that equation especially looking at our past performance. We are at double digit growth. Company. What is holding us back is the current in our perspective, short-term with a short-term focus, the attacks that have a short-term focus driven by access inventory in the market that is especially focused on calendar year 23, and then 24 calendar year 24, starting with January, it will have a different perspective on the inventory in addition to the benefits of the two infrastructure topics that we completed and are now ramping up, and with full benefits in age 2, fiscal year 24.

Kunal Madhukar: Roger, thank you so much.

Blake Anderson: Thank you. Your next question comes from the line of Blake Anderson of Jeffries. Your line is open.

Blake Anderson: Hi, good morning. I wanted to ask on gross margin apologies if we missed it, but did you say how much margin expansion or contraction you're anticipating for gross margin next year, and then if you could talk about the gross margin expectations in Q1 as well, and maybe the trajectory, just looking for a little bit more color on that line item. Yeah, I'm happy to do so. Gross profit overall and length talked about the gross margin definition and the influence, obviously, on the denominator on the gross, on the GMV versus net sales effect, so gross margin may differ, but the overall logic on the gross profit of the absolute gross profit is that we guide that the gross profit growth, absolute gross profit growth is fully in line with our top line growth.

Blake Anderson: This is the first and utmost important topic, and in Q1, if I guide towards a marginally negative EBITDA, EBITDA is always very much driven in our business model by the gross profit margin, so to say, or gross profit, the absolute gross profit, so also in Q1, we expect a gross profit margin slippage that will lead to that marginally negative EBITDA, so gross profit profit is then in line with top line growth and deviations throughout the quarters that I called out just now, so it will fluctuate, given also the seasonality of what I said about Q1 and Q3 being lower and Q24, Q2 and Q4 being being stronger also on the cost of the margin side and the adjusted EBITDA margin.

Blake Anderson: Got it. Are you guiding in all by region, just wondering how much you expect the US region to the momentum there to continue next year, how that might be factored in near GMV expectations? We're not guiding on certain regions, but we don't anticipate any dramatic changes, I mean, so as Microsoft called out, the US will continue and has been in the last quarters and years, Top Growth Region, China being spotty and a bit unclear how that will come back to normal levels.

Blake Anderson: We are strong in Europe and we'll also see a target there, double digit growth rates. The overall logic that we've seen in Q4 in Fiscalia 23 is expected to continue more or less. Right now, the US is very strong but on the overall, we don't see immediate shift in what we have been seeing in the last quarters.

Abhinav Sinha: Your next question comes from the line of Abhinav Sinha, Sir of Société, General. Your line is open. Hi, thanks for taking my question.

Abhinav Sinha: Just one thing on the growth profit and on the inventory. On the growth profit, you said that by calendar 1-8-24, you expect the promotional activity to subsidize. Why do you guide a stable margin and not an expansion? That's the first one.

Martin Beer: Second is, on the inventory, I see that it was more than 100 million drag on your cash flow. So, how should we look at the inventory for 20-24? Will it be back to the normal 250-300 million level or any color on that will be very helpful? Yeah, Abhinav, happy to take that. Can you hear me? Yeah, yeah. Sorry. On the inventory side, yes. I mean, we are being mindful of managing our inventory levels, not driven by short-term cash focus, but really thinking about attacking and retaining the right customer cohorts, thinking about brand relationships, but also obviously preventing undo inventory aging.

Martin Beer: And that implies that this will not change dramatically short-term. So, we have elevated inventory levels, best measured in inventory days, outstanding 300-2 days, and we'll have to come back 20-60 days. We also call out that the inventory level that you point to is elevated because of early deliveries, so that will leverage out to the end of the season. But also that the prior year was obviously influenced by merchandise buyback programs and a unique stock reduction.

Martin Beer: Because if you look at the cash flow statement of last year, there was, I mean, despite the strong growth that we had last year, we had a positive cash inflow on inventory, so less inventory. So, obviously, there is a previous year effect in the growth of the inventory levels if you just look at the, look at the share growth. And also bear in mind, yeah, 80% of the inventory is current and upcoming seasons and with our full price approach.

Martin Beer: Okay, and high end positioning, we are able to, to achieve cell-through rates over healthy cell-through rates over a much longer period, usually 95% over 21 months. So the inventory levels will continue to stay elevated. We are not managing that quarter to quarter, but more on a medium-term outlook in a healthy way that is healthy for our positioning and our business model without hurting the P&L or our positioning. On a growth-profit margin, we have to see how the growth-profit margin will evolve in H2.

Martin Beer: So a clear guidance is, I call it out in H1, but H2 is obviously also on the cost-profit margin side, better than H1, and we are very confident on seeing a positive trend there, how it will play out. If we have to see, we are definitely standing through our high end positioning, to our full-price focus, and that is key in everything what we do. And just to be sure, on the EBITDA, you said the 2-H24 will be 50 to 150 basis points higher than 1-H24. Is that the correct understanding? Exactly, exactly. Thanks, Martin. Thank you.

Yawen Gao: And your last question comes from one of the H1Gao, CICC. Your line is open. Thanks for taking my question. So my question is our AORI. Obviously, we achieved a very high of the physical turners rig, despite the promotional pressure, and I believe this was managed due to the strong performers of the top customers, and also that they are increasing share of the sets sales. But in the future, maybe I say, next year, as a micro-evalent turns around, and other customers, including the aspirational customer come back, and also the term is done more at the moment of the year, or the self-employment may be more balanced between the top customers and others.

Michael Kliger: So you're full of which level of AORI's impact over the long term, just could you share any ballpark members with us, and how they impact our margin? Thank you. Thank you for that. Yes, in principle, you have a correct argument. The aspirational customers coming back will in the industry probably lower the AORB again. In our logic number one, aspirational customer, we are unfortunately not. We're still some seasons maybe away from that.

Michael Kliger: So our 50 or 24 is non-expecting sudden return of all aspirational customers. And the continuous increase of our AORB has also been a reflection of our continuous focus of our whole assortment on the top end customer in terms of additional categories and additional more expensive items. So I think the trend of increasing AORB is our long term objective in increasing our share of top end customers. A big return from aspirational customers may.

Michael Kliger: Lower, Slovda, how they increase, but we don't see a reversal coming. And in terms of margin, as we don't see what they could lower AOV in the next years, I don't see any impact of AOV economics and our margin on the contrary, with the huge investments and technology and the huge investments in the infrastructure like the warehouse, we will actually continue to create more efficiencies. These independent of AOV just by being much more productive and operating our business. Thank you. There are no further questions at this time. We thank you for participating in today's call. This concludes today's conference call. You may now disconnect.