Q4 2024 MYT Netherlands Parent BV Earnings Call

Okay.

Operator: Greetings, and welcome to the Mysteries of Fourth Quarter and Full Fiscal 2024 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.

Greetings and welcome to the my trace of fourth quarter and full fiscal 2024 earnings conference call.

Speaker Change: 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.

Operator: I would like to ask, if you would like to ask a question, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

Speaker Change: I would like to ask if he would like to ask a question simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star one again, thank you.

Operator: It is now my pleasure to do introduce your host, Martin Beer, Mysteries' Chief Financial Officer. Thank you, sir. Please begin.

Speaker Change: It is now my pleasure to do introduce your host Bart in beer, My Teresa as Chief Financial Officer.

Speaker Change: Thank you Sir please begin.

Martin Beer: Thank you, operator, and welcome everyone to Mysteries' Invest Conference call for the fourth quarter and full fiscal year 2024. 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 are subject to risks and uncertainties, including the risks and uncertainties described in our annual report. Many factors could cause actual results to differ materially. We are on a no-duty to update forward-looking statements.

Speaker Change: Thank you operator, and welcome everyone to <unk> conference call for the fourth quarter and full fiscal year 2024.

Michael <unk>: With me today is our CEO Michael <unk>.

Speaker Change: 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 are subject to risks and uncertainties, including the risks and uncertainties described in our annual report many factors could cause actual results to differ materially.

Speaker Change: We are under no duty to update forward looking statements.

Martin Beer: In addition, we will refer to certain financial measures not reported in accordance with IFRS on this call. You can find reconciliations of these non-IFRS financial measures in our earnings press release. Which is available on our Investor Relations website at investors.mytreesa.com.

Speaker Change: Additionally, we will refer to certain financial measures not reported in accordance with I have to ask them to.

Speaker Change: Call you can find reconciliations of these non <unk> financial measures in our earnings press release, which is available on our Investor Relations website.

Speaker Change: S investors thought my Teresa Dot com.

Michael Kliger: 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. We will today comment on the results and performance of our fourth quarter and the full fiscal year 2024. We are very pleased with our results in a still challenging macro-environment. With strong revenue growth and positive adjusted EVPA at the fourth quarter, we continue our very positive business momentum from the third quarter and have achieved a significant step up in financial performance in H2 compared to H1 of fiscal year 2024.

Speaker Change: I will now turn the call over to Michael.

Martin: Thank you Martin.

Also from my side, a very warm welcome to all of you and thank you for joining our call today.

Michael <unk>: We will today comment on the results and performance of our fourth quarter and between fiscal year 2024.

We are very pleased with our results in a still challenging macro environment with strong revenue growth and positive adjusted EBITDA in the fourth quarter. We continued our very positive business momentum from the third quarter and have achieved a significant step up in financial performance in Asia.

Michael <unk>: <unk> two compared to <unk>, one fiscal year 2024.

Michael Kliger: We have reaffirmed our leadership position in a clearly consolidating sector. We still see slower demand from aspirational customers and promotion intensity in the market by competitors, but our clear focus on the high spending, wardrobe building top customers allows us to win market share and growth. Strong top customer growth, a record high average quarter rate, and excellent customer satisfaction scores demonstrate our relentless customer focus, which is a key success factor for my Theresa. We clearly see ourselves as one of the few winners in the consolidating luxury digital space.

Michael <unk>: We have reaffirmed our leadership position and then clearly consolidating sector.

Michael <unk>: We still see slower demand from aspirational customers.

Speaker Change: And promotional intensity in the market by competitors, but I want to see a focus on the highest spending wardrobe building top customers allows us to win market share and growth.

Speaker Change: Strong top customer growth a record high average quarter and excellent customer satisfaction scores demonstrate our relentless customer focus which is a key success factor for mitel.

Speaker Change: We clearly see ourselves as one of the few witness in the consolidating luxury and digital space.

Michael Kliger: I wish to highlight today's three key messages to you that make us stand out in the fourth quarter and demonstrate the strengths of the My Theresa business despite ongoing macro concern. First, we see clear evidence that after a difficult period last autumn, our business is back on track for strong, profitable growth. Our business fundamentals have further improved, and the United States continues to be a strong driver of our growth. Second, our core value of building a community for luxury insubiants and creating desirability with digital and physical experiences is paying off greatly. Our success with top customers is very evident in our results, and our focus on big spending water building top customers continues to drive the desire for luxury brands to partner with us for exclusive activations.

Speaker Change: I wish to highlight today's three key messages to you, but make us stand out in the fourth quarter and demonstrate the strength of the mitel business despite ongoing macro uncertainties.

Speaker Change: Sure.

Speaker Change: We see clear evidence that after a difficult period last autumn our business is back on track for strong profitable growth.

Speaker Change: Fundamentals has further improved in the United States continues to be a strong driver of our growth.

Speaker Change: Second our core baby or building a community or luxury enthusiasts.

Speaker Change: And creating desirability with digital and physical experiences is paying off greatly.

Speaker Change: Our success with top customers is very evident in our results and our focus on big spending water building top customers continues to drive the desire for luxury brands to partner with us for exclusive Activations.

Michael Kliger: Third, our very resilient and consistent business model allowed us to significantly improve our business compared to Q4 of fiscal year 2023. Outstanding customer satisfaction, record high average order rate, decreasing customer acquisition costs, and stable operating cost ratios where again, high life in the four quarter. In summary, we have accelerated our top line growth and profitability. We have reinforced our unique positioning with top customers, and we have delivered excellent business KPIs in the fourth quarter of fiscal year 2024.

Speaker Change: Our very resilient and consistent.

Speaker Change: Consistent business model allowed us to significantly improve our business compared to Q4 of fiscal year 2023.

Speaker Change: Outstanding customer satisfaction record high average order values, increasing customer acquisition costs and stable operating cost ratios.

Speaker Change: Again highlights in the fourth quarter.

Speaker Change: In summary, we have accelerated our top line growth and profitability we have reinforced.

Speaker Change: Our unique positioning with top customers and we have.

Speaker Change: Excellent business Kpis in the fourth quarter of fiscal year 2024.

Michael Kliger: Let me now comment in more detail on these three messages. First, let's look at the continued improvement in top and bottom line. We grew our growth merchandise value GMV by plus 7.8% in Q4 of fiscal year 2024 compared to Q4 of fiscal year 2023, leading to a double-digit GMV growth of plus 11.4% in the second half of fiscal year 2024 as compared to plus 2.5% in the first half. For the full fiscal year, our GMV growth reached plus 7.1% compared to full fiscal year 2023. The United States continues to be a significant growth driver of our business, generating an outstanding growth of plus 22.8% in full fiscal year 2024 compared to fiscal year 2023, and with a growth of plus 25.2% in the second half of full fiscal year 2024.

Speaker Change: Let me now comment in more detail on these three messages.

Speaker Change: First let's look at the continued improvement in top and bottom line.

Through our gross merchandise value <unk> by plus seven 8% in Q4 fiscal year 2024, compared to Q4 fiscal year 2023.

Speaker Change: Leading to a double digit GMB growth of plus 11, 4% in the second half of fiscal year 2024, as compared to plus two 5% in the first half.

Speaker Change: For the full fiscal year, our GMB growth reached plus seven 1% compared to previous fiscal year 2023.

Yes, I can states continues to be a significant growth driver for our business generating an outstanding growth plus 22, 8% in 46 to <unk> 24 compared to fiscal year 'twenty three.

Speaker Change: And with a growth of plus 25, 2% in the second half of 'twenty four.

Michael Kliger: Also, for the full fiscal year, the US accounted for 19.9% of the GMV of our total business. It is clear that our highly curated selection of true luxury brands resonates very well with the big spending US luxury customers looking for multi brand inspiration. We've also experienced net sales growth in Europe in the fourth quarter, with plus at 3.2% compared to Q4 of fiscal year 2020. China and Asia continue to be impacted by ongoing macro headwinds and uncertainties. The fourth quarter, we also continued our improvement that adjusted the BDA margin with plus 4.7%. In the second half of fiscal year 24, we thus achieved an adjusted BDA margin of 4.3% versus 1.7% in the first half of fiscal year 24 and versus 2.3% in age 2 of fiscal year 23.

Also for the forces near the U S accounted for $19, 90% of the <unk> of our total business.

Speaker Change: It is clear that our highly curated selection of true luxury brands resonates very well with the big spending U S luxury customers looking for multi brand inspiration.

Speaker Change: We also experienced net sales growth in Europe in the fourth quarter with plus two.

Speaker Change: <unk>, 2% compared to Q4.

Speaker Change: China and Asia continued to be impacted by ongoing macro headwinds and uncertainties.

Speaker Change: The fourth quarter. We also continued our improvement in adjusted EBITDA margin was plus four 7%.

Speaker Change: In the second half of fiscal year 'twenty for me that's achieved an adjusted EBITDA margin of four 3% versus one 7% in the first half of fiscal year, 'twenty, four and versus two 3% in H two of fiscal year 'twenty suite.

Michael Kliger: Our strong double digit growth and almost doubling of profitability in age 2 of fiscal year 24 is clearly demonstrating the strengths and the consistency of our business model, delivering profit of the growth despite ongoing macroeconomic headwinds.

Speaker Change: Our strong double digit growth and almost doubling of profitability in H two of fiscal year 'twenty four is clearly demonstrating the strength and the consistency of our business model.

Speaker Change: Nuvaring profitable growth despite ongoing macroeconomic headwinds.

Speaker Change: Second.

Michael Kliger: Second, our essence of building a community for luxury enthusiasts and creating desirability through digital and physical experiences is paying off greatly and is also driving the desire for luxury brands to partner with us with exclusive activations. Our top customer base grew by plus 3.4% in the fourth quarter, and in addition, the average spend the top customer grew at plus 4.6% in Q4, 24 versus Q4, 23. Overall, the share of top customers in our business in terms of GME has increased from 32.6% in full fiscal year 21 to now 39.2% in full fiscal year 24. A continuous growth over the past four years.

Our essence of building a community for luxury enthusiasm and creating desirability through digital and physical experiences is paying off great and is also driving the desire for luxury brands to partner with us with exclusive activations.

Speaker Change: Our top customer base grew by plus three 4% in the fourth quarter and in addition, the average spend per customer grew at plus four 6% in Q4 24 versus Q4 'twenty three.

Speaker Change: Overall, the share of top customers and our business in terms of DMV.

Speaker Change: <unk> increased from 32, 6% in fiscal year 'twenty, one to now 39, 2% for fiscal year 'twenty four.

Speaker Change: <unk> growth over the past four years.

Michael Kliger: The positive result of our top customer focus is also reflected in the growth of our US top customer base that grew by plus 39.4% in fiscal year 24 compared to fiscal year 23. Our successfully growing global top customer base and our unique access to such big spending, wardrobe building customers makes us a highly desired platform for luxury brands seeking partnerships. In the fourth quarter of fiscal year 24, we saw again many high-impact campaigns and exclusive product launches, underlining our strong relationships and the sustained support from our brand partners. We launched an exclusive capsule connection with Deutsche Gabbana, a woman's wear and kids wear with over 50 styles and exclusive Misoni capsule connection featuring women's wear beach wear styles and home lifestyle products, as well as capsule collections with Valentino and Girochi, only available at Myteresa.

Speaker Change: The positive results of our top customer focus is also reflected in the growth of our U S customer base that grew by.

Speaker Change: 39, 4% in fiscal year, 'twenty, four compared to fiscal year 'twenty three.

Speaker Change: Our successfully grow global top customer base and our unique access to such big spending wardrobe building customers makes us a highly desired platform for luxury brands.

Speaker Change: King partnerships in the fourth quarter of fiscal year 'twenty four we saw again, mainly high impact campaigns and exclusive product launches underlining, our strong relationships and the sustained support from our brand partners.

We launched an exclusive capsule collection with Deutsche to Gabon, a women's wear and kits.

Speaker Change: Over 50 sites and exclusively Sony capsule collection, featuring women's wear beachwear styles and home lifestyle products as well as capsule collections with Valentino and Gmail sheet only available at my Teresa.

Michael Kliger: We also launched exclusive styles from Nureve on, only available at Mytheresa and were exclusive pre-launch partner for collections from Sonervant, Tox, Doro, Etro, and Gucci, providing Mytheresa customers exclusive first access to these products. In addition to creating desire ability for our top customers with highly exclusive digital campaigns and product launches, we also bring together our top customers for amazing physical experience. The fourth quarter we hosted various VIC events for our top customers across the globe. We invited a group of top customers to go Doosh and Gabana Beach Club in Santrope, welcome top customers to the Wulgari, a town event in Rome, and the San Laurent Geopunti cocktail at San Lone de Mobile in Milan.

Speaker Change: We also launched exclusive styles from the wave on only available with <unk> and we're exclusive prelaunch partner for collections from some of them towards the role petrol and Gucci, providing mitel as our customers exclusive first access to these products.

Speaker Change: In addition to creating desirability for our top customers was highly exclusive digital campaigns and product launches. We also bring together our top customers who are amazing physical experience.

Speaker Change: The fourth quarter, we hosted various VIP events for our top customers across the globe.

Speaker Change: We invited a group of top customers too bullish in Gabon, a beach club in Santo <unk> welcome top customers to the <unk> <unk>.

Speaker Change: That event in Rome, and the Sun Longhaul Geopolitic cocktail at Salone del mobile at Needham.

Michael Kliger: We hosted further events in London, Stockholm, New York, Connecticut, Shenzhen, Chaman, and Singapore. Please see our investor presentation for more details on top customer events.

Speaker Change: The host of further events in London stock quote in New York.

Speaker Change: <unk> connect script trends in Shanghai and Singapore. Please.

Please see our investor presentation for more details on top customer EBIT.

Michael Kliger: The essence of my Theresa is the Beta Community, the luxury enthusiast through physical money and by experience. The fourth quarter we hosted several unique multi-day experiences and partnership with luxury brands. On such outstanding highlight was a two-day Italian experience we created together with Bruno Cuccinelli at Lake Dorter, including an intimate dinner and picnic joined by Bruno Cuccinelli himself. Only a few weeks later, we hosted another beautiful event together with Dolce and Gabbana in the form of a two-day car pre-experience on the Pictures Island to also celebrate the launch of the exclusive Dolce and Gabbana capsule collection only available to My Theresa customers.

Speaker Change: Yes since of my Teresa is the basic community for luxury it seems yes.

Speaker Change: True physical money can buy experience.

Speaker Change: The fourth quarter, we hosted several unique multi day experiences in partnership with luxury brands.

Speaker Change: One such outstanding highlight was a two day Italian experience, we created together with <unk> liquid Shelley at Lake daughter, including an intimate dinner and picnic joined by Brunello Cuccinelli himself.

Speaker Change: Only a few weeks later, we hosted another beautiful event together with Deutsche and Cabana in the form of a two day Copley experience on the pictures Ireland to also celebrate the launch of the exclusive doors in Gabon, a capsule collection only available to <unk> customers.

Michael Kliger: The third highlight in collaboration with Valentino was a private dinner and cruise on board of the iconic Cristina Ouyot along the French Riviera, the launch of the Valentino Escape 2024 capsule collection. In addition to engaging with our top customers, such events also create global brand awareness for My Theresa through press and global social media amplification.

Speaker Change: The third highlight in collaboration with <unk> was a private dinner.

Speaker Change: Crews on board of the iconic Christina Oh yards, along the French review around the launch of the Valentina escape 2024 capsule collection.

Speaker Change: In addition to engaging with our top customers such events also create global brand awareness, where mitel lays out through press and global social media amplification.

Michael Kliger: Please see our investor presentation for more details on these unique money can't buy experiences.

Speaker Change: Please see our investor presentation for more details on these unique money can buy experiences.

Michael Kliger: As you guys continue to be a key driver for our growth, we also continue to strengthen our brand building efforts here. Following the success from last year, my Theresa and partnership with Flamingo Estate created another eight-week shopping pop-up experience to inspire and then detain our guests with an immersive physical luxury shopping destination in East Hampton. The highly successful immersive physical luxury shopping experience attracted over 6000 registered guests, offering them programming each week, including monogramming and embroidering with Missoni, Eto, Globetrotta, Ananya, Ruslan Bajinsky, Zavet and Joseph Altuzarra. Our cooperation partner Porsche displayed their not yet on the market, Macan and Taycan electric cars for clients to test drive.

Speaker Change: As the U S continues to be a key driver for our growth. We also continue to strengthen our brand building efforts here.

Speaker Change: Growing the success from last year My Teresa in partnership with Flamingo as states created another eight week shopping pop up experience to inspire and entertain our guests with an immersive physical luxury shopping destination in east Hampton.

Speaker Change: The highly successful immersive physical luxury shopping expands attracted over 6000 registered guests.

Speaker Change: Rang them programming, each week, including monarch, ramming and Embroidering was Missoni April globetrotter.

Speaker Change: Our non yacht.

Speaker Change: <unk>.

Speaker Change: And Joseph <unk>.

Speaker Change: Our cooperation partner Porsche.

Speaker Change: Plate theyre not yet on the market, Mark Hahn and Thaicom electric cars for clients to test drive.

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

Speaker Change: Please see our investor presentation for more details on the pop up experience in East Tennessee.

Michael Kliger: Let me conclude my statement by commenting on the third accomplishment in the fourth quarter. Our very resilient and consistent business model allowed us to significantly improve our business. Martin will talk in a few minutes about the details of our bottom line results for the fourth quarter of his year of 2024, but let me provide you with some key operational highlights. Our customer satisfaction, which we measure by our internal net promoter score, reached an outstanding 83% Q4 fiscal year 24, showcasing the consistent excellence of our customer services. Our average order value increased to a new record high of 703 euros, underlining the success of our focus on selling high and luxury products.

Speaker Change: Let me conclude my statement by commenting on the third accomplishment in the fourth quarter.

Our very resilient and consistent business model allowed us to significantly improve our business portfolio.

Speaker Change: Martin will talk in a few minutes about the details of our bottom line results for the fourth quarter of fiscal year 2024, but let me provide you with some key operational highlights.

Martin: Our customer satisfaction, which we measure by our internal net promoter score reached an outstanding 83% Q4 fiscal year 'twenty for showcasing the consistent excellence of our customer services.

Speaker Change: Our average order value increased to a new record high of 703 euros underlining the success focus on selling high end luxury products.

Michael Kliger: Finally, our customer acquisition cost decreased by 2.5% in the fourth quarter of this year 2024. This shows our continued ability to unlock efficiencies in our proprietary customer targeting algorithms. We also successfully continued the ramp up of our operations at our distribution center like Tsuk, with more than 80% of all customer orders already processed at the end of July. As part of our strategic focus on global growth, operational excellence, and continued profitability, we have made the decision to close our legacy distribution center at Heimstein. We expect that this will result in increased customer satisfaction and cost efficiencies, thanks to the unique location of all the above.

Speaker Change: Our customer acquisition costs decreased by two 5% in the fourth quarter of fiscal year 2024. This shows our continued ability to unlock efficiencies in our <unk>.

Speaker Change: Prior Tory customer targeting algorithms.

Speaker Change: We also successfully continued the ramp up of operations at our distribution center licenses.

Speaker Change: With more than 80% of all customer orders already processed at the end of July.

Speaker Change: As part of our strategic focus on global growth operational excellence and continued profitability. We have made the decision to close our legacy distribution Center homestead.

Speaker Change: Expect that this will result in increased customer satisfaction and cost efficiencies. Thanks to the unique location of the Leipzig distribution center at the airport, allowing for much faster international shipping.

Speaker Change: With all of the above it should come as no surprise that we are very pleased with our performance in the fourth quarter of fiscal year 2024.

Michael Kliger: It should come as no surprise that we are very pleased with our performance in the fourth quarter of this year 2024 and the full fiscal year 2024. We believe that our results demonstrate the strengths and consistency of our business model, delivering profitable growth. The results also demonstrate what we believe is a superior market positioning, clearly focused on the big spending top customers. We see ourselves as a clear winner in the consolidating luxury e-commerce space. We are extremely well positioned to benefit from the tremendous growth prospects as market conditions continue to improve globally. To capitalize on these prospects, we are actively evaluating opportunities to support and accelerate our investments in future business growth.

Speaker Change: And the full fiscal year 2024.

Speaker Change: We believe that our results demonstrate the strength and consistency of our business model delivering profitable growth.

Speaker Change: The results also demonstrate what we believe is a superior market positioning nearly focused on the big spending top customers <unk>.

Speaker Change: Ourselves as a clear winner in the consolidating luxury e-commerce space.

Speaker Change: We are extremely well positioned to benefit from the tremendous growth prospects as market conditions continue to improve globally.

To capitalize on these prospects, we are actively evaluating opportunities to support and accelerate our investments in future business growth.

Michael Kliger: This also supports our strong confidence in our medium-term growth trajectory and profitability levels, despite the ongoing short-term uncertainties in the market environment right now.

Speaker Change: This also supports our strong confidence in our medium term growth trajectory and profitability levels. Despite the ongoing short term uncertainties in the macro environment right now.

Martin Beer: And now I hand over to Martin to discuss the financial results in detail. Thank you, Michael. We are very pleased with our plus 13.8 percent net sales growth in H2 of fiscal year 24 and almost doubling profitability on adjusted even our margin level in H2, all in line with our previous guidance. Our growth profit margin slippage in Q4 of fiscal year 24 reduced further. to just 150 basis points, standing at a strong 47.4% growth profit margin. We are continuing to successfully work through our inventory levels, are now below a DIO of 300 days and expect to achieve the targeted DIO of 260 days in the next nine months.

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

Michael <unk>: Thank you Michael.

Martin: We are very pleased with our plus 13, 8% net sales growth in H two of fiscal year, 'twenty, four and almost doubling profitability on adjusted EBITDA margin level in H two all in line with our previous guidance.

Speaker Change: Our gross profit margin slippage in Q4 of fiscal year 'twenty four reduced further to.

Speaker Change: To just 150 basis points.

Speaker Change: Standing at a strong 47, 4% gross profit margin.

Speaker Change: We are continuing to successfully work through our inventory levels are now below of the Io off 300 days and expect to achieve the targeted CIO of 260 days.

Speaker Change: The next nine months.

Martin Beer: For the full fiscal year of 24, we had a positive operating cash flow and no bank debt in our balance sheet. I will now review the financial results for the fourth quarter, second half, and full fiscal year 24 ended June 30, 2024, and will provide guidance for the fiscal year ahead of us. Met sales increased 13.8% in H2 of fiscal year 24 to 456.8 million, with a solid Q4 growth at 9.7%. For the full year, we achieved net sales of 840.9 million, a growth of 9.8%. GMV for the full fiscal year was at 913.6 million, a growth of 7.1% year over year.

Speaker Change: For the full fiscal year 'twenty four we had a positive operating cash flow and no bank debt and our balance sheet.

Speaker Change: I will now review the financial results for the fourth quarter second half and full fiscal year 'twenty four ended June 30.

Speaker Change: 2024, and we will provide guidance for the fiscal year ahead of us.

Speaker Change: Net sales increased 13, 8% in H two of fiscal year 'twenty four to $456 8 million with a solid Q4 growth at nine 7%.

For the full year, we achieved net sales of $840 9 million.

Speaker Change: The growth of nine 8%.

Speaker Change: <unk> for the full fiscal year was at $913 6 million.

Both of seven 1% year over year.

Martin Beer: Our growth is driven by a strong and loyal customer base. Our top customer base is expanding continuously, as the top 3.7% of our customers drive 39.2% of our total revenues in fiscal year 24. During the fourth quarter of fiscal year 24, GMV top customer increased by plus 4.6% and plus 7.4% per all customers. Our ALV increased by 49 euros per order delivered to an industry-leading 703 euros in the fourth quarter of fiscal year 24 on an LTN basis. The continuous growth of our ALV clearly improves our order economics and truly underlines our successful focus on full price selling, as well as our unique and superior positioning at the very high end of luxury.

Speaker Change: Our growth is driven by a strong and loyal customer base.

Speaker Change: Our top customer base is expanding continuously as today the top three 7% of our customers drive 39, 2%.

Speaker Change: Of our total revenues in fiscal year 'twenty four.

Speaker Change: During the fourth quarter of fiscal year, 2004, <unk> top customer.

Increased by plus four 6%.

Speaker Change: And plus seven 4% for all customers.

Speaker Change: Our <unk> increased by 49 euros per order delivered.

Speaker Change: So an industry, leading 703 euros in the fourth quarter of fiscal year 'twenty four on an LTM basis.

Speaker Change: The continuous growth of our <unk> here.

Speaker Change: Clearly improves our order economics and truly underlines our successful focus on full price selling.

Speaker Change: As well as our unique and superior positioning at the very high end of luxury.

Martin Beer: With this three spot in digital luxury experience, we expand our leadership position with top customers all over the world, especially our core markets in Europe, the US, Middle East and rest of the world. During Q4 of fiscal year 24, growth profit increased by 6.3% to 205.8 million, up from 99.5 million in the prior year period. The growth profit margin during the quarter stood at a strong 47.4%. During the quarter, we were able to again reduce the growth margin slippage to 150 basis points compared to 220 basis points in Q3 and 490 basis points in Q2 of fiscal year 24.

Speaker Change: With the sweet spot and digital luxury experience.

Speaker Change: We expand our leadership position top customers all over the world.

Especially.

Speaker Change: Core markets in Europe, the U S middle East and rest of the world.

Speaker Change: During Q4 of fiscal year 'twenty four gross profit increased by six 3%.

$205 $8 million.

Speaker Change: Up from $99 5 million in the prior year period.

The gross profit margin.

Speaker Change: The quarter stood at a strong 47, 4%.

Speaker Change: During the quarter, we were able to again reduce the cross margin slippage to 150 basis points compared to 220 basis points in Q3, and 490 basis points in Q2 of fiscal year 'twenty four.

Martin Beer: We still see the effect of emotional intensity of struggling competitors considering their exit or desperately finding their position in a clearly consolidating mark. Kit, our profitable top-line growth highlights the success of not following that route, but staying true to our uniquely curated offerings with increasing brand support, full focus on full price selling, and achieving high sales rates. Adjust the shipping and payment cross ratio during the fourth quarter of fiscal year 24 increased by 70 basis points through 14.7% as compared to 14.0% in the prior year period. This expected increase is due to our broadening customer base worldwide, with an increasing share of shipments to countries where we pay all duties at taxes for all customers.

Speaker Change: We still see the effect of promotional intensity of struggling competitors considering their exit or.

Speaker Change: Or desperately finding the position in a clearly consolidating market.

Speaker Change: Our profitable topline growth highlights the success of not following that route but staying true.

Speaker Change: Our uniquely curated offerings with increasing brand support.

Speaker Change: We'll focus on full price selling and achieving high sell through rates.

Speaker Change: Adjusted shipping on payment cost ratio during the fourth quarter of fiscal year 'twenty four increased by 70 basis points to 14, 7% as compared to 14.0% in the prior year period.

Speaker Change: This expected increase is due to our broadening customer base worldwide with an increasing share of shipments to countries, where we pay all duties at Texas for all customers.

Martin Beer: For the fullfisk clear, the adjusted shipping and payment cross ratio was at 14.7% as well. We are continuing to successfully implement further cost efficiencies through our high performing payment and duty system set up worldwide. Our focus remains on the acquisition and retention of top customers. As laid out in our end report, we see continuously expanding ratios of lifetime value over customer acquisition costs for our customer cohorts. Our CAC decreased again in Q4 of fiscal year 24 by 2.5%. Also, for the fullfisk clear, we were able to achieve a 2.6% lower CAC. With this successful focus in aligning to a still challenged overall market environment, marketing expenses decreased by 250 basis points from 13.1% in fiscal year 23 to 10.6% in fiscal year 24.

Speaker Change: For the full fiscal year, the adjusted shipping and payment cost ratio was at 14, 7% as well.

Speaker Change: We are continuing to successfully implement further cost efficiencies.

Speaker Change: Through our high performing payment and Judy system.

Speaker Change: Set up worldwide.

Speaker Change: Our focus remains on the acquisition and retention of top customers.

As laid out in our annual report, where we see continuously expanding ratios of lifetime value over customer acquisition cost.

For our customer cohorts.

Speaker Change: Our CAC decreased again in Q4 of fiscal year 'twenty four by two 5%.

Speaker Change: Also for the full fiscal year 'twenty, four we were able to achieve a two 6% lower CAC.

Speaker Change: With the successful focus and aligning to a still challenging overall market environment.

Speaker Change: Marketing expenses decreased by 250 basis points.

Speaker Change: From 13, 1% in fiscal 'twenty, three to 10, 6% in fiscal year 'twenty four.

Martin Beer: The adjusted selling general and administrative expense ratio decreased 180 basis points in H2 of fiscal year 24 to now 13.2%, down from 15.0% in H1 of fiscal year 24. This successful development mirrors our relentless efforts in achieving cost leverage in S&A. We are in the process of winding down our legacy distribution center and relocating the remaining operations to our new life-sick distribution center with clear benefits for the customer experience and to end and enabling further cost leverage. On adjusted EBITDA level and in line with our guides, we significantly increase profitability levels in H2 versus H1 of fiscal year 24 and as well in Q4 of fiscal year 24 compared to the preceding year period.

Speaker Change: Adjusted selling general and administrative expense ratio decreased 180 basis points in H two fiscal 'twenty four to now 13, 2% down from $15 <unk> percent and <unk>, our fiscal 'twenty four.

Speaker Change: This successful development.

Speaker Change: Mirrors, our relentless efforts and achieving cost leverage in SG&A.

Speaker Change: We are in the process of winding down our legacy distribution center.

Speaker Change: And relocating the remaining operations to our new Leipzig, the secrets et cetera with clear benefits.

Speaker Change: Customer experience.

Speaker Change: End to end.

Speaker Change: And enabling further cost leverage.

Speaker Change: On adjusted EBITDA levels and in line with our guidance, we significantly increased profitability levels in H two.

Speaker Change: H, one fiscal year, 'twenty, four and as well in Q4 of fiscal year, 'twenty four compared to the preceding year periods.

Martin Beer: In H2 of fiscal year 24, the adjusted EBITDA margin was at 4.3%, up from 1.7% in H1. The 4.3% margin in H2 of fiscal year 24 also compares to the 2.3% of H2 in the previous fiscal year. For the full fiscal year, we achieved 25.8 million adjusted EBITDA at a 3.1% margin compared to 5.0% adjusted EBITDA margin in the previous fiscal year, driven by a weaker H1 of Fiscalia 24. In some, in H2 of Fiscalia 24, we were able to achieve increasing profitability levels combined with excellent top-line growth despite continuing market challenges. Appreciation and armatization expenses in Q4 increased only moderately to 4.1 million or 1.7% of GMB from 1.4% in prior quarter.

Speaker Change: NH two of fiscal year 'twenty for the adjusted EBITDA margin was at four 3%.

Speaker Change: Up from one 7% and H one.

Speaker Change: The four 3% margin in H two of fiscal 'twenty. Four also compares to the two 3%.

Speaker Change: H two in the previous fiscal year.

Speaker Change: For the full fiscal year, we achieved $25 8 million.

Speaker Change: EBITDA at a three 1% margin.

Compared to five 7% adjusted EBITDA margin in the previous fiscal year, driven by a weaker H one fiscal year 'twenty four.

Speaker Change: And some in H two of fiscal year 'twenty, four we were able to achieve increasing profitability levels.

Speaker Change: Bind with excellent top line growth.

Speaker Change: <unk> continuing market challenges.

Speaker Change: Depreciation and amortization expenses in Q4 increased only modestly to $4 1 million or one 7% of GMB from one 4% in prior year quarter.

Martin Beer: This mirrors our effective strategy of not capitalizing IT costs, but to have the full effect while past IT replatforming and continues IT improvements always already extends in our PNL. With the restarting lower levels of depreciation and armatization, our increased profitability is also visible on adjusted operating income as well as adjusted net income level. For the full year 2024, adjusted operating income more than a positive 10.6 million and adjusted net income at a positive 7.7 million.

Speaker Change: This narrows our effective <unk>.

Speaker Change: Strategy.

Speaker Change: Capitalizing it costs.

Speaker Change: To have the full effect.

Speaker Change: <unk> it.

Speaker Change: We platforming and continues improvements always already expense in our P&L.

Speaker Change: With the resulting lower levels of depreciation and amortization our increased profitability.

Speaker Change: It's also visible on adjusted operating income as well as adjusted net income.

Speaker Change: For the full year 2024, adjusted operating income was that a positive $10 6 million and adjusted net income and a positive $7 7 million.

Martin Beer: Let's take a look at the cash flow statement. For the full fiscal year 24, we had a positive operating cash flow of 10 million. In addition, we closed the year with no bank liabilities, full availability of our 75 million revolving credit facility, and 15.1 million cash attendants. In the fourth quarter of fiscal year 24, our cash flow from investing activities only used up 2.4 million as we have now almost fully completed the remaining payments of the new warehouse in Lexington. With no additional major investments planned, we expect our capex to make up around 1% of GMV for the fully fiscal year.

Speaker Change: Let's take a look at the cash flow statement for the full fiscal year 'twenty four.

Speaker Change: We had a positive operating cash flow of $10 million.

Speaker Change: In addition, we closed the year with no bank liabilities full.

Speaker Change: Full availability of our 75 million revolving credit facility.

Speaker Change: And $15 1 million in cash attempts.

Speaker Change: In the fourth quarter fiscal year 'twenty for our cash flow from investing activities only used up $2 4 million as we have now almost fully completed the remaining payments of the new warehouse electric.

Speaker Change: With no additional major investments planned.

Speaker Change: Expect our capex to make up around 1% of <unk> for the full fiscal year.

Martin Beer: A unique benefit of our business model. Let me give you an update on our inventory situation. Over the preceding quarters, we have successfully managed to our inventory levels, continuously aligning inventory growth with our overall top line growth and achieving normalized levels of inventory. The inventory growth year-over-year was a plus 2.9% at the end of the fourth quarter of fiscal year 24, coming down from plus 44.4% in Q1, plus 33.1% in Q2, and plus 11.9% in Q3 of fiscal year 24. In June 23, our DIO stood at 310 days and was at 296 days in June 24.

Speaker Change: A unique benefit of.

Speaker Change: Our business model.

Speaker Change: Let me give you an update on our inventory situation over the preceding quarters. We have successfully managed through our inventory levels continuously aligning inventory growth with our overall topline growth and achieving normalized levels of inventory.

Speaker Change: Inventory growth year over year was plus two 9% at the end of the fourth quarter of fiscal year 'twenty four coming down from plus 44, 4% in Q1, plus 33, 1% in Q2.

Speaker Change: And plus 11, 9% in Q3 of fiscal year 'twenty four.

Speaker Change: On June 23, our DSO stood at 310 days.

Speaker Change: 296 days in June 24.

Martin Beer: We expect to return to our target range of 2060 days. by the end of Fiske Year 25.

Speaker Change: We expect to return to our target range of 260 days.

Speaker Change: The end of fiscal year 'twenty five.

Martin Beer: Turning to the guidance for Fiske Year 25, which runs from July 24 to June 25. We have been continuously gaining market share, a consolidating market, and will continue to do so. We are growing profitably with our continued focus on top customers and full-price selling, now curated offer. We are seeing an easing of the current promotional environment, especially with the current Fall Winter 24 season, and expect trends to further ease in Calendar 25. Nevertheless, macroeconomic uncertainties persist near-term, and we remain cautiously optimistic for the period until June 25. For Fiske Year 25, we therefore expect GMV and net sales growth between 7 and 13%.

Speaker Change: Turning to the guidance for fiscal year, 'twenty, five which runs from July 24 to June 25.

Speaker Change: We have been continuously gaining market share.

Speaker Change: A consolidating market and we'll continue to do so.

Speaker Change: We are growing profitably with our continued focus on top customers.

Speaker Change: And full price selling now curated offer.

We are seeing an easing of the current promotional environment, especially with the current fall winter 2004 season.

Speaker Change: I would expect trends to further ease in calendar 'twenty five.

Speaker Change: But nevertheless, macroeconomic uncertainties persist near term.

Speaker Change: And we remain cautiously optimistic for the period until June 25.

Speaker Change: For fiscal year 'twenty five we therefore expect.

<unk> net sales growth between seven and 13%.

Martin Beer: Adjusted EBITDA margin between 3% and 5%. We continue to not guide on quarters, but want to give you a snapshot of our current expectations. Q1 and Q3 of Fiske Year 25 are expected to be quarters with weaker top line growth and weaker profitability, and Q2 and Q4 of Fiske Year 25 with stronger top line growth and stronger profitability. In line with the usual pattern, we expect H1 top line growth rates to be similar to H2 of Fiske Year 25, and on both stability levels, H2 to be stronger than H1. Q1 of Fiske Year 25 ending September 24 is performing well and in line with our expectations.

Speaker Change: Adjusted EBITDA margin between three and 5%.

Speaker Change: We continue to not guide on quarters, but want to give you a snapshot of our current expectations.

Speaker Change: Q1, and Q3 of fiscal 'twenty, five I expect it to be quarters with weaker topline growth and weaker profitability in.

Speaker Change: In Q2, and Q4 of this year 25, with stronger topline growth and stronger profitability.

Speaker Change: In line with the usual pattern, we expect H, one topline growth rates to be similar to H two fiscal 'twenty five.

Speaker Change: Profitability levels.

Speaker Change: Each to be stronger than H one.

Speaker Change: Q1 of fiscal year, 'twenty five ending September 24.

Speaker Change: It's performing well and in line with our expectations.

Michael Kliger: We are very confident in the medium and long-term outlook of the business, and we will benefit more quickly and over-proportionally when the overall luxury market returns to full strength. My Theresa is already the leading luxury multi-brand digital platform, and we continue to fortify our leadership position, being the best partner, not only for top luxury brands, but also for our top customer base.

Speaker Change: We're very confident in the medium and long term outlook of the business and we will benefit more quickly at over proportionately when the overall luxury market returns to full strength.

Speaker Change: My Teresa is already the leading luxury multi brand digital platform and we continue to fortify our leadership position being the best partner not only for top luxury brands.

Speaker Change: But also for our top customer base.

Michael Kliger: And with that, I will now turn the call back over to Michael for his concluding remarks. Thank you, Martin. As stated, we are very pleased with our fourth quarter and full Fiske year 2024 earnings results. We have seen a marked performance improvement, the second half of this year 2024. With this strength and consistency of our business model, we see ourselves well positioned to achieve our Fiske year 2025 guided targets. The first few weeks of the new Fiske year support our confidence. We believe that My Theresa offers the best digital luxury shopping experience for big spending consumers and true luxury brands.

Speaker Change: And with that I will now turn the call back over to Michael <unk>.

Speaker Change: For his concluding remarks.

Michael <unk>: Thank you Margaret.

Michael <unk>: As stated we are very pleased with our fourth quarter and full fiscal year 2020 core earnings results.

Speaker Change: You have seen a marked performance improvement the second half of fiscal year 2024.

Speaker Change: Is this strength and consistency of our business model, we see ourselves well positioned to achieve our fiscal year 2025 guided targets.

Speaker Change: The first few weeks of the new fiscal year support our confidence.

Speaker Change: We believe that <unk> offers the best digital luxury shopping experience for big spending consumers and true luxury brands.

Michael Kliger: We will further grow our community of luxury enthusiasts through highly desirable digital and physical experiences globally.

Speaker Change: We will further grow our community of luxury enthusiasm through highly desirable digital and physical experiences globally.

Operator: And with that, I ask the operator to open the line for your questions. Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star one to join the queue.

Speaker Change: And with that I am.

Speaker Change: Asked the operator to open the line for your questions.

Speaker Change: Yes.

Speaker Change: Thank you the floor is now open for questions.

Speaker Change: If you have dialed in and we'd like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue.

Speaker Change: If you would like to withdraw your question simply press Star one again.

Speaker Change: If you are called upon to ask your question and our listening via loud speaker on new device. Please pick up your handset and ensure that your phone is not on mute when asking a question.

Speaker Change: Again press star one to join the queue.

Oliver Chen: And your first question comes from the line of Oliver Chen with TD Callins. Please go ahead. Hi, Michael and Martin. On the quarter, gross margins were lower than what we were modeling. I know a lot was in line with your full year guidance.

Speaker Change: And your first question comes from the line of Oliver Chen with TD Cowen. Please go ahead.

Speaker Change: Hi, Michael and Martin.

Speaker Change: In the quarter gross margins were lower than what we were modeling.

Speaker Change: A lot was in line with your full year guidance, but what's happening there and also as you think about working through inventory levels over the next nine months, which inventory levels are you most concerned about.

Oliver Chen: But what's happening there? And also, as you think about working through inventory levels over the next nine months, which inventory levels are you most concerned about?

Oliver Chen: Also, as we think about guidance, your longer term guidance calls for high teams relative to how you guided seven to 13%. What do you see happening? I think there's normalization still happening as you think about that relative to what you see longer term.

Speaker Change: Also as we think about guidance your longer term guidance calls for high teens relative to how you guided 7% to 13% what do you see happening I think there is normalization still happening as you think about that relative to what you see longer term and then finally on.

Oliver Chen: And then finally, on the quarter to date, can you clarify if the growth rate you're seeing is similar to fourth quarter, or what's the nature of what you're seeing recently with this customer? Thanks a lot.

Speaker Change: Quarter to date can you clarify if the growth rate, you're seeing is similar to fourth quarter or whats the nature of what Youre seeing recently with this customer thanks a lot.

Michael Kliger: Thank you, Oliver.

Speaker Change: Thank you Oliver.

Michael Kliger: Let me take the two last questions, and Martin can talk to the gross margin and inventory levels. So medium term outlook. Yes, we do believe that we are in a cyclical moment and given at least an all momentum. We see that we believe that we have seen the trough. So there is further normalization.

Speaker Change: Let me take the two last questions and Martin can talk to the gross margin inventory levels. So medium term outlook. Yes, we do believe that we are in a cyclical movement and given that he's at all but we see that.

Speaker Change: Yes.

Martin: The needs that we have seen the trough and so there is further moment innovation.

Michael Kliger: We are cautiously optimistic with our guidance of seven to 13% growth, but we do see enough reasons to then continuously further improve and therefore cold high teams as our medium term outlook as economic, political environment. Normalize across the globe and the luxury as a sector back on the road trajectory. And in terms of the quarter to date, we feel comfortable with our numbers in mind with our three new guidance of seven people, seven to 13%. So we are given a few weeks, but given a few weeks, we are very confident with our guidance of growth.

Speaker Change: We are cautiously optimistic with our guidance of 7% and 17% growth, but b.

Martin: To see that.

Martin: Reasons to then continuously improve and therefore called high teens as our regional outlook as economic and political environment.

Martin: Normalized.

Martin: Ross the globe.

Martin: Luxury as a sector.

Speaker Change: Back on the road strategic truth.

Martin: <unk>.

Martin: In terms of the quarter to date.

We feel comfortable with our numbers in line with our full year guidance of certain people of 17, 17%. So we are.

Speaker Change: Given a few weeks, but give him a few weeks, where I feel very confident with our full year guidance of growth.

Martin Beer: Maybe, Martin, you address the other questions from Oliver.

Maybe mark can you address the other questions from all of them.

Martin Beer: Yeah, happy to do so. I mean, growth margin in line with industry trend in for the purpose clear, we took it there.

Mark Hahn: Yeah happy to do so I mean gross.

Gross margin.

In line with the industry trend and for the full fiscal year.

Mark Hahn: We took a hit there but.

Martin Beer: But as you are aware of, we really improve the situation from Q1, Q4, and especially in fall winter 24 season. We clearly see improved for price. with South Korea, which gives us thanks for our interest here to also clearly see here that we expect no further guest puppet margin slippage for the purpose here.

Speaker Change: As you are well aware of.

Speaker Change: <unk> improved the situation from Q1 and Q4.

Speaker Change: And.

Speaker Change: Especially in fall winter 2004 season, including improved full price.

Speaker Change: Sell through rates.

Speaker Change: It gives us.

Speaker Change: Great.

For fiscal.

Speaker Change: Fiscal year two to also clearly see here that we expect no further gross profit margin slippage.

Speaker Change: For the full fiscal year. So we are.

Martin Beer: So we are very confident of seeing a much better and improved situation in the next 12 months.

Speaker Change: I'm very confident.

Speaker Change: Obscene.

Speaker Change: Much better.

Speaker Change: Improved situation in the next 12 months.

Speaker Change: Hum.

Martin Beer: Also, I call that out the inventory goals that was not aligned with the top line to read that and to now have a situation where we have almost, you know, on the level of last year June, despite the 10th of central, but we're not there. So we continue to work through the inventory levels. Now, 296 days of inventory outstanding, we expect a further improvement in the DIO to the target level of 260 days, and that will lead to, again, the overall inventory to really have that tightly managed and have a clear expectation for the end of June, so for the end of 12th of 25th of 25th to have achieved the targeted inventory levels that we always had the 260 days.

<unk> also.

I called that out of the inventory.

Speaker Change: Growth.

Speaker Change: Was not in line with the top line two to rebalance it and too.

Speaker Change: Now have a situation where we have.

Speaker Change: Almost on the level of last June.

Speaker Change: Despite a 10% growth.

Speaker Change: And but we're not there yet so we are we will continue to work through the inventory levels now 296 days of inventory outstanding we expect.

Speaker Change: Further.

Speaker Change: Improvement in the CIO to the targeted level of 260 days.

Speaker Change: And that will lead to again the overall inventory.

Speaker Change: Two really.

Speaker Change: That tightly managed.

A clear ex dictation for for the end of June so for the end of full fiscal year 25 to two half.

Speaker Change: Achieving the targeted.

Speaker Change: Inventory levels.

Speaker Change: But we always have the 260 days.

Martin Beer: And so we are quite happy on how the last quarters we were able to manage through the inventory levels despite the high promotional intensity in the industry and to achieve growth and profitable goals.

Speaker Change: So we are.

Speaker Change: We are quite happy.

Speaker Change: How are you.

Speaker Change: Last quarters, we were able to manage through the inventory levels.

Speaker Change: Despite the high promotional intensity in the industry.

Speaker Change: And to achieve growth.

Speaker Change: Profitable growth as.

Martin Beer: This will obviously have to look from it from multiple sides, and that I'm saying. So from that side, I'm quite happy.

Speaker Change: As well as up to obviously look from it from multiple size and balance that so from that side.

Speaker Change: Clients happy.

Oliver Chen: Okay, thanks. Really helpful to follow up.

Speaker Change: Okay. Thanks really helpful a follow up.

Oliver Chen: Michael, how would you compare and contrast the U.S. customer relative to Europe and at Asia, we're worried about some overarching like out of your control factors with housing and consumer sentiment. We'd love your thoughts as you go around the world and look at customer trends. And the second half, but I think I believe you mentioned that revenue should be similar in terms of growth rates between first and second. Just any color there as we model that as well.

Michael how would you compare and contrast, the U S customer relative to Europe.

Speaker Change: And that Asia, we're worried about some overarching like out of your control factors with housing and.

Speaker Change: Tumor sentiment.

Speaker Change: Would love your thoughts as you go around the world and look at customer trends and finally Martin on the comparisons do get harder in the second half, but I think I believe you mentioned that revenue should be similar in terms of growth rates between first and second just any color there as we model that as well thanks gentlemen.

Oliver Chen: Thanks, gentlemen.

Michael Kliger: Happy to be following up. So we go around the globe. The U.S., the U.S.

Martin: Happy to follow up so we go around the globe.

Martin: The U S. The U S consumer sentiment standout.

Michael Kliger: Consumer sentiment stand out. Even though I, of course, have to say that our plus 25% and H2 is far above the market trend. So it is really, of course, a reflection of the customers we target, the high-end customers, but we have seen the very good sentiment, which also continues in the U.S. Europe is improving.

Martin: Even though I of course have to state that all up plus 25% in <unk>.

Martin: The market trends.

Speaker Change: It is really of course, a reflection of the customers we target the high end customers.

Speaker Change: But we have seen very good.

Speaker Change: Sentiment, which also continues in the U S Europe.

Speaker Change: Is improving so it.

Michael Kliger: So it is looking better, with maybe the exception of journey, consumer sentiment, particularly in some of the Southern countries. It can be Spain, Greece, but also France, UK, haven't proved. We are very pleased with that situation because you are a big part of our business.

Speaker Change: Is looking better.

Speaker Change: Maybe the exception of Germany.

Speaker Change: Consumer sentiment, particularly in some of the.

Speaker Change: Southern countries.

Speaker Change: Spain and Greece.

Speaker Change: I'd also France UK have improved.

Speaker Change: We are very pleased with that situation because.

Speaker Change: Europe represents a big part of our business.

Michael Kliger: The US is not the biggest single market flaws, but Asia is at the other end of the spectrum and we do believe that it will take some more time until the uncertainties, particularly around, as you mentioned, the Chinese housing markets are mitigated. Ourselves, I'm not even sure what the best word for that, but also outside of greater China, there are, of course, also bright spots like Singapore, bright spots like Thailand, Malaysia, like the Philippines. There are, of course, not yet of the size of greater China, but there are bright spots also in that region.

Speaker Change: Well in the U S is not the biggest single market for us, but Asia is at the other end of the spectrum do believe that it will take some more time until the uncertainties, particularly around as you mentioned the Chinese.

Speaker Change: Zing markets.

Speaker Change: Mitigated are resolved.

Speaker Change: To ensure the best word for that but also outside of <unk>.

Speaker Change: Greater China. They are of course also bright spots bright spots like Singapore bright spots like Thailand like.

Speaker Change: And the shareholder like the Philippines. They are of course, not yet of the size of greater China.

Speaker Change: There are bright spots also in that region.

Martin Beer: Yeah, and maybe for the balancing of H1 and H2, net sales to next equal growth, yeah, which is a bit contrary to it. If you look at the overall situation, it's basically driven by Q2 of the previous year, which was very low, that only in that sales group of 3.1.

Speaker Change: Yes, and maybe for the balancing of.

Speaker Change: H, one and H tools net sales two X equal growth, which is a bit counterintuitive if you look at.

Speaker Change: The overall situation.

Speaker Change: It's basically driven by Q.

Speaker Change: Q2.

Speaker Change: The previous year, which was very low.

Speaker Change: Only a net sales growth of three five.

Martin Beer: So the COMP of Q2 is low, and the COMP of Q3 is very high. The COMP, we had a plus 18% net sales growth in Q3, and those two effects then balance the more regular expectations of Q1 and Q4 to lie that very comparable top line growth in the H2 and H1 of this video. Make a lot of that regard.

Speaker Change: So the cost of Q2 as is low.

Speaker Change: We see and the comp of Q3.

Speaker Change: Hi become he had a plus 18% net sales growth in Q3.

Speaker Change: And so those two effects then balance the more.

Regular expectations on Q1, and Q4 to arrive at <unk>.

Speaker Change: Very comparable topline growth in the.

Speaker Change: H, two and H one of this fiscal year.

Speaker Change: Thanks, a lot best regards.

Matthew Boss: Your next question comes from the line of Matthew Boss with JP Morgan. Please go ahead. Great, thanks.

Speaker Change: Your next question comes from the line of Matthew Boss with J P. Morgan. Please go ahead.

Speaker Change: Great. Thanks, Amanda Douglas on for Matt.

Matthew Boss: It's Amanda Douglas on from that. So Michael, could you elaborate on how you're seeing the consolidation in the sector influence your business as you think about new customer acquisition, brand relationships, or the broader promotional environment? Yeah, I'm happy to respond to that. I mean obviously, kind of observe out the market, because we have seen players announcing mergers, players think exit of the market, and that has various effects, of course, of the industry dynamics. One is we do believe that when larger, more consolidated players, we should avoid these significant imbalances of demand supplied that led to the high promotional intensity last quarter.

Michael <unk>: Michael could you elaborate on how youre seeing the consolidation in the sector influence your business as you think about new customer acquisition.

Speaker Change: Relationships or the broader promotional environment.

Speaker Change: Yeah happy to respond to that.

Speaker Change: He is observing the market you have seen players announcing merger other players I think exited the market.

Speaker Change: That has various effects of course of the industry dynamics. One is we do believe that.

Speaker Change: With larger.

Speaker Change: More consolidated players we should avoid these significant unbalances of demand and supply to the height promotional in terms of Cmos awesome. So do believe.

Michael Kliger: So we do believe that promotional intensity should normalize. There will always be promotions, and there will always be just competition, but it should normalize. on custom acquisition costs. I think also here, we do believe that we saw some effects in Q4, that the enormous spend that we have seen some players in the past on digital marketing will normalize. Again, it's not that it won't continue; everyone wants to invest in customers. Therefore, we of course have developed our whole pretty very smart algorithms to target the best, but we have seen some big Uber and spending, and the effects that some players should bring it to normalization.

Speaker Change: With promotional intensity should normalize that would always be promotions and there'll always be competition, but it should normalize.

Speaker Change: Customer acquisition costs I think.

Speaker Change: So here, we do believe and we saw some effects in Q4 that.

Speaker Change: The enormous spend that we have seen some players in the past on digital marketing.

Speaker Change: Normalized again.

Speaker Change: It's not that.

Speaker Change: Continuing everyone wants the best customers and therefore, we of course half hour.

Speaker Change: Hopefully very smart algorithms to target the best we have seen some.

Speaker Change: Exuberance in spending.

Speaker Change: The capex of some players should bring it to a normalization.

Michael Kliger: I think overall, it is a peer vote for quality of customer relationships, quality of a sort of building. That seems to be what drives winning in this marketplace, and I think that's a good use for customers, and that's a good use for brand partners that you can win and must compete on those items and not on the lowest price, which is not a sustainable business model.

Speaker Change: I think overall it is a clear vote for quality of customer relationships quality or assortment building.

<unk>.

Speaker Change: That seems to be what drives winning in this marketplace and I think that's good news for customers and that's good news for our brand partners that.

Speaker Change: Hugh.

Speaker Change: And when it must compete on those items and not on the lowest price, which is not a sustainable business model.

Martin Beer: Great, and to follow up for Martin, could you elaborate on the cadence of your growth profit, dollar growth expectations throughout fiscal 25, as we think about the front half versus the back half of the year? Yeah, obviously, we are well in line with the setting our growth also on the growth profit level, but we are explicitly not targeting growth profit, especially not on targets, because the overall market situation still remains to a relatively big uncertainty. And so overall, we clearly see growth profit growth will continue, and we'll be strong as we are at a low base. Our growth profit margin, but it all depends on the overall situation in the market.

Martin: Great and to follow up from Martin could you elaborate on the cadence of your gross profit dollar growth expectations throughout fiscal 'twenty five as we think about the front half versus the back half of the year.

Martin: Okay.

Speaker Change: Yes, I mean, obviously you.

Martin: We are well.

Lilly: In line with Lilly with setting our growth also on the gross profit level.

Speaker Change: But we are explicitly not targeting <unk>.

Lilly: Perfect.

Speaker Change: Especially not on targets because the overall market situation still.

Speaker Change: It remains to issue.

Speaker Change: Logically.

Speaker Change: With a big uncertainty.

Speaker Change: And so.

Speaker Change: Overall, we clearly see.

Speaker Change: Gross profit growth.

Speaker Change: We'll we'll continue.

Speaker Change: <unk> will be strong.

Speaker Change: As we are.

Speaker Change: And our loan base, our gross profit margin.

Speaker Change: But it all depends on the overall situation in the market.

Martin Beer: So this will be a key wire, a prediction or cadence of the cost of growth over the quarters.

Speaker Change: So.

Speaker Change: This is.

Speaker Change: This is this will be a key driver.

Speaker Change: Okay.

Speaker Change: Prediction or cadence of the gross profit growth over the quarters.

Martin Beer: That's helpful, thank you.

Speaker Change: That's helpful. Thank you.

Ashley Huggins: Your next question comes from the line of Ashley Huggins with Jeffries. Please go ahead. Hi, this is Blake on for Ashley. Thanks for taking our question.

Speaker Change: Your next question comes from the line of Ashley Hogan with Jefferies. Please go ahead.

Sure.

Speaker Change: Hi, This is Blake on for Ashley Thanks for taking our question. So I wanted to start off with if you could just talk about.

Ashley Huggins: So I wanted to start off with, if you could just talk about if you had to maybe rank it the key factors in terms of your sales guidance that would drive you to be at the low end versus the high end, any initiatives that you can really elaborate on that you're focused on. And then also just any more commentary on the aspirational customers, how they are performing. Can you talk at all about maybe customer growth versus transactions or their AOV as well? Thanks so much.

Blake: You had to maybe rank at the key factors.

Speaker Change: In terms of your sales guidance that would drive you to vehicle low end versus the high end any initiatives that you can really elaborate on that you're focused on and then also just any more commentary on the aspirational customers. How they are performing can you talk at all about maybe customer growth versus transaction.

Speaker Change: <unk> or their AFP as well thanks, so much.

Speaker Change: Yeah.

Blake: Thank you, Blake.

Speaker Change: Thank you Blake.

Speaker Change: Sure.

Michael Kliger: I mean, if I think about our range of 17 percent, I think the real driver for the low and high end point is more in the macroeconomic, so political environment than in key initiatives. I mean, our initiatives are being pushed, and they really center of creating this community for options. Julius, really driving customer engagements through more and more events and more and more opportunities, and of course the continue drive to offer the best assortment there is and add to their assortment even more valuable friends, even more valuable individual pieces.

Speaker Change: I mean, if I think about a range of 7% to 13% I think the real driver for the for the.

Speaker Change: Low end high end point is more of a macroeconomic or.

Speaker Change: Political environment than in key initiatives and our initiatives.

Speaker Change: Are being pushed and they really center.

Creating this communities will not change UBS really driving customer engagements through more and more events are more and more opportunities and of course, the continued drive to offer the best <unk>.

Speaker Change: <unk> there is.

Speaker Change: Add to the assortment, even more valuable brands, even more valuable in.

Individual pieces. So we're I think what leads to the 7% or plus 13, it's more.

Michael Kliger: So I think what leads to the seventh or a plus or a team is more a faster and faster recovery of the economic situation in Europe, the potential positive and that's the positive. I think that's more where it sits.

Speaker Change: Cross sell and what's a fast recovery.

Speaker Change: Economic situation in Europe.

Speaker Change: The potential positive or not so positive.

Speaker Change: After nine U S election.

Speaker Change: Decision or.

Speaker Change: Particularly what happens in China.

Speaker Change: I think thats, more where where where it sits on the aspirational customer.

Michael Kliger: And the aspirational customer, it's a slow normalization; there's nothing evident in China which has a large part of aspiration customers, a large part of customer focusing on accessories and bags. There's some improvement, as mentioned last time in the US. There's some improvement now in Europe, but if we look at our numbers, we grew our top customer base 3.0 percent. We grew our average spend to the top customer by 3.6 percent, so numbers and spend went up, but for the total population, we still saw a flatish total customer numbers and it's really in the average spend to the customer.

Speaker Change: It's a slow normalization.

Speaker Change: There is no nothing other than.

China, which had a large part of aspirational customer was a large part of our customers.

Speaker Change: Customers focusing on accessories and bags.

Speaker Change: There are some.

Roseland as mentioned last time in the U S. There's some improvement in Europe, but if we look at our numbers.

Speaker Change: We grew our top customer base three 4%.

Speaker Change: We grew our average spend good top customer by four 6% so numbers and spend went up.

Speaker Change: And for the total population, we still saw a.

Speaker Change: Flattish.

Speaker Change: Total customer numbers and.

Speaker Change: It's really in the average spend per customer. So there is at the moment.

Michael Kliger: So there is, at the moment, still, even if you will be low, the top customers, more sort of reading out of the bit higher spend versus the aspiration customers.

Speaker Change: Even if you go below the top customers.

Speaker Change: More.

Speaker Change: Sort of.

Speaker Change: Weeding out after a bit higher spend versus the aspirational customer was not as strong as before but.

Michael Kliger: Not as strong as before, but I think we purely focus on aspiration customers or if you have the brand platform that has significant success with the aspirational customer segment, I think this is still three, four seasons out before we are putting you back.

Speaker Change: Thank you.

Speaker Change: Purely focus on exploration customers or if you have the brand or platform that had significant success.

Speaker Change: The aspirational customer segment I think this is Phil.

Speaker Change: Yes.

Speaker Change: Just reinforces without before we are pulling back.

Blake: Got it, thank you so much, a mess of luck. Thank you very much.

Speaker Change #100: Got it. Thank you so much and best of luck.

Speaker Change #101: Thank you Brett.

Grace Smalley: Your next question comes from line of Grace Smiley with Morgan Stanley. Please go ahead. Hi, thank you for taking my question. I just had one. Please just in terms of what you're seeing across the industry on luxury brands' pricing, given some of the weakness that we are seeing in the aspirational consumer, whether you started to see across the industry brands introduce lower price points or even directly reduce their pricing on some product categories.

Speaker Change #101: Your next question comes from the line of Grace Smalley with Morgan Stanley. Please go ahead.

Speaker Change #102: Hi, and thank you for taking my question.

Speaker Change #103: Had one please just in terms of what you're seeing of course, the industry on luxury bond pricing and given some of the weakness that we are seeing an aspirational consumer wherever you started to see them.

Speaker Change #104: The industry bonds introduced lower price points or even directly reduce that pricing on some product categories. Thank you very much.

Grace Smalley: Thank you very much.

Michael Kliger: Thank you, Grace. I mean, pricing clearly was before the weaknesses that turned up not summer was on a roll, and we've seen significant price increases, but that has stopped.

Speaker Change #105: Thank you Grace.

Speaker Change #105: Pricing clearly was.

Speaker Change #106: And before the weaknesses that turned out not some hours on a on a roll and we have seen significant price increases that has stopped.

Michael Kliger: So I think we're clearly for most brands in a moment where prices stay and so over time there's some inflation; prices in the year terms will come down. It would be interesting to see further development of price entry product, and we've seen some very few, but we have seen brands that have started to lower prices. I think this is pure economics, and demand was very high; then there were opportunities to raise prices. And there's some brands now feeling it going to find an annoying, but lowering prices is still the absolute exception versus the norm of just keeping it flat and sort of working it out over the coming season.

Speaker Change #107: So I think we are cleaning for most brands.

Speaker Change #107: In a moment were.

Speaker Change #108: Prices stay and so over time with some inflation with prices in real terms will come down.

Speaker Change #109: It will be interesting.

Speaker Change #109: Further development of the new price.

Speaker Change #109: This entry.

Speaker Change #109: And we have seen some very few but we have seen brands don't have started to low oil prices.

Speaker Change #110: I think so.

Speaker Change #110: This is pure <unk>.

Speaker Change #110: Economics.

Speaker Change #110: Demand was very high there were opportunities to raise prices.

Speaker Change #112: Some brands now feel it went too far there are no rain, but lowering prices is still the absolute exception.

Speaker Change #112: Versus the norm or just keeping it flat.

Working at all over the company.

Speaker Change #112: For the coming season, so items.

Michael Kliger: So I don't see any price helpful.

Speaker Change #112: Any price increases coming.

Speaker Change #112: <unk>.

But that's more or less absorbed.

Speaker Change #113: Okay very helpful. Thank you.

Grace Smalley: Thank you.

Speaker Change #112: Okay.

Wendy Gao: Your next question comes from the line of Wendy Gao with CICC. Please go ahead. Hi, thanks for taking my questions.

Speaker Change #112: Your next question comes from the line of Wendy Gal with CIC. Please go ahead.

Speaker Change #114: Hi, Thanks for taking my question.

Wendy Gao: I have one question about our New York winner, China credit, and do we have any expectations for her? And I need the next slide for China. My second question is about the top customers in China. Do you think there are any differences between the top customers in China and versus in the U.S.?

Speaker Change #115: Quick question about the hour on yogurt in China, rather than.

Wendy Gal: Do we have any expectations for her and I know that client for China and my second question is about that.

Speaker Change #117: A couple of guys in China are dosing yeah.

Speaker Change #117: It's Wayne.

A couple of months in China and things like that.

Michael Kliger: Thank you. Thank you for the question. China is a very important market for us. It's a strategic important and thus we continue to invest in the market, as is evident for many luxury brands because we all are preparing and investing for recovery of the market. We do believe that if we recovery at the market we still take maybe 8 to 12 months, but nevertheless this is a market that is just very high on our focus list. We've launched a mini program on HX to provide more convenience to our Chinese consumers. We will focus with our local team with more customer engagement.

Speaker Change #117: Thank you.

Speaker Change #117: Thank you for the question.

Speaker Change #117: Yeah.

China is.

Speaker Change #117: A very important market losses.

Speaker Change #117: Strategic importance to us.

Speaker Change #117: We continue to invest in the markets.

Speaker Change #117: As is evident for many luxury brands because we all are preparing and investing for recovery of the market.

Speaker Change #117: To believe if we can.

Speaker Change #119: Recovery of the market will still take.

Speaker Change #119: Maybe eight to 12 months.

Speaker Change #120: Les this is a market that is very high on our own.

Speaker Change #120: Our focus list.

Speaker Change #120: Gordon and leadership to our team in China.

Speaker Change #120: We will.

Speaker Change #120: Launch.

Speaker Change #120: A new program to provide more.

Speaker Change #120: Thanks to our Chinese consumers.

Speaker Change #120: Will.

Speaker Change #120: Focus with our local team with more customer engagement.

Michael Kliger: So things that we believe will pay off, will pay off not easily but over time. The market has lost some competitors, so it is a good moment to step in and raise Ranoanas because that's still the biggest opportunity for us to just make our type of offer on a type of business known to good Chinese consumers. We also enjoy and are proud of our top customers in China, which we entertain at these events mentioned in the presentation before. I think the interesting part about the top customers in China as compared to other markets is that they're also very focused on ready-to-wear.

Things that we believe will pay off will pay off.

Speaker Change #120: Over time the market.

Speaker Change #120: Has lost some competitive so there is good momentum.

Speaker Change #120: Stepping in and raise brand awareness because that's still the.

Speaker Change #122: Biggest opportunity cost suggest make our type of alcohol what type of business no good to Chinese consumers.

Speaker Change #122: We also enjoy.

Speaker Change #122: Out of our top customers in China, which we entertained as events as mentioned.

Speaker Change #123: In the presentation before I think the interesting part about the top customers.

Speaker Change #122: China as compared to.

Speaker Change #122: Other markets is that they are also very focused on ready to wear.

Michael Kliger: It's the same logic, and they're very focused on the moment on the very best ready-to-wear pieces. Chinese top customers can tend to be willing and able to spend even more, and some along the opinion top customers so that the level of spend is even higher. But it is ready to wear. It is worth robing. And what we have also seen, similar to what happened in the US or Europe, is that the interest of Chinese consumers in being able to travel, travel abroad, travel within China, and going out is very high. There seems to be a significant discretionary spend dedicated to such occasions, which again, then of course, drives the type of wardrobe weeks that we see in our numbers.

Speaker Change #122: Same logic and.

Speaker Change #122: We're very focused on it.

At the moment.

Speaker Change #122: That we best ready to wear pieces.

Speaker Change #122: Chinese top customers.

<unk> two.

Speaker Change #122: Willing and able to spend more in some of our European top customers.

Speaker Change #122: Level of expenses is higher.

Speaker Change #122: But it is ready to wear wardrobe.

Speaker Change #122: Sure.

Speaker Change #122: What we have also seen a similar.

Similar to what happened in the U S or in Europe is that the interest of Chinese consumers.

Speaker Change #122: Able to travel travel abroad travel within China.

Speaker Change #122: Going out.

Speaker Change #122: Is very high there seems to be a significant discretionary spend dedicated to such occasions, which again then of course drives the type of wardrobe needs.

Speaker Change #124: So I can see in our numbers and that is <unk>.

Michael Kliger: And that is maybe was one year delay, a similar trend that we saw in Europe and US, the big focus on on on occasion where the big focus on. Thank you.

Speaker Change #125: It was one year delay a similar trend that we saw in Europe and U S. The big focus on.

Speaker Change #125: Vacation, where the big focus.

Speaker Change #125: Uh huh.

Speaker Change #125: Thank you.

Operator: That concludes our Q&A session. Thank you for your interest.

Speaker Change #126: That concludes our Q&A session. Thank you for your interest. This concludes today's call you may now disconnect.

Operator: This concludes today's call. You may now disconnect.

Okay.

Speaker Change #126: