Q3 2025 MYT Netherlands Parent BV Earnings Call
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Greetings and welcome to losses experienced third quarter fiscal year 2000 identified earnings conference call. At this time all participants are in a listen only mode. Today's coldest being recorded and we have allocated one hour for prepared remarks and Q&A. It is my pleasure to introduce your host Martin Beer Chief Financial Officer of Luxe experience. Thank you Sir.
Operator: Greetings and welcome to Lux Experience 3rd Quarter Fiscal Year 2025 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.
Operator: It is now my pleasure to introduce your host, Martin Beer, the Chief Financial Officer of Lux Experience. Thank you, sir.
Martin Beer: Please begin. Thank you, operator, and welcome, everyone, to the Lux Experience Investor Conference Call for the third quarter of fiscal year 2025. Our first investor conference call since we closed the acquisition of Juxtentaporte and changed our company name to Lux Experience to reflect the best of the combined company.
We gave them.
Speaker Change: Thank you operator, and welcome everyone to the Luxe experience Investor Conference call for the third quarter fiscal year 2025.
First an Investor conference call.
Speaker Change: Since we closed the acquisition of your Triple T and changed our company name to Lux experience to reflect the best of the combined companies.
Martin Beer: So this call is dedicated to the fiscal Q3 results of the Legacy MyTheresa standard With me today is our CEO, Michael Kliger. Before we begin, we would like to remind you that our discussions today will include forward-looking statements. Any statements we make about expectations of 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 that 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 IFS on this call.
Speaker Change: Today's call is dedicated for fiscal Q3 results of the legacy My Teresa.
Speaker Change: Send alone business.
Michael: 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 statements. We make about expectations are forward looking statements and are subject to risks and uncertainties, including the risks and uncertainties described.
Michael: And you don't report.
Michael: Many factors could cause actual results to differ materially.
Michael: No duty to update forward looking statements.
Michael: In addition, we will.
Michael: We'll refer to certain financial measures not reported in accordance with the RFS on this call.
Martin Beer: You can find reconciliations of these non-IFS financial measures in our early press release.
Michael: You can find reconciliations of these non RFS financial measures in our press release, which is available on our Investor Relations website at.
Martin Beer: which is available on our Investor Relations website at investors.luxxexperience.com will now turn the call over to Michael.
Michael: Investors duck lacks experience dot com.
Michael: Well now turn the call over to Michael.
Michael Kliger: Thank you, Martin. Also, from my side, a very warm welcome to all of you, and thank you for joining our call. We will comment today on the results and performance of our third quarter of fiscal year 2020. We are, of course, truly excited to have completed the acquisition of Jukes Net-A-Porter on April 23, and to now operate the leading global luxury multi-brand retail group under the name LuxXperience. This acquisition brings together some of the most iconic brands in digital luxury retail and will generate enormous value for our customers, brand partners and shareholders. Lux Experience is now the preeminent multi-brand group in digital luxury, with combined net sales of around €3 billion.
Michael: Thank you Martin also from my side, a very warm welcome to all of you and thank you for joining our call.
Michael: We will come in today on the results and performance of our third quarter fiscal year two.
Michael: 2020.
Michael: We are of course truly excited to have completed the acquisition of <unk> net a porter on April 23rd and to now operate.
Michael: <unk> global luxury multi brand retail group under the name <unk> <unk>.
Michael: This acquisition brings together some of the most iconic brands in digital luxury retail and will generate enormous value to our customers, Brian partners and shareholders.
Michael: <unk> is now the pre eminent multi brand group digital luxury with combined net sales of around $3 billion.
Michael Kliger: Our medium term ambition is to reach $4 billion in net sales and 7% to 9% adjusted EBTA market.
Michael: Our medium term ambition is to reach 4 billion in net sales and 7% to 9% adjusted EBITDA margin.
Michael Kliger: We will provide much more details on the just-completed acquisition tomorrow in a separate Investor http://TheBusinessProfessor.com As we now embark on the exciting new chapter as Lex Experian, I'm very proud to see our company in a very healthy and strong position. I'm specifically very pleased with our results in the third quarter of this year. With solid revenue growth and positive adjusted EBTA, we continued to demonstrate our ability to execute well and achieve strong results under continued macro uncertainties where other players failed. We are the leader in a clearly consolidating sector and continue to display the unique characteristic of profitable growth.
We will provide much more detail from the just completed acquisition tomorrow in a separate investor call.
Michael: As we now embark on the exciting new chapter.
Michael: <unk> I'm very proud to see our company in a very healthy and strong position.
Michael: I'm, specifically very pleased with our results in the third quarter fiscal year 2025.
Michael: With solid revenue growth and positive adjusted EBITDA, we continued to demonstrate our ability to execute well and achieved strong results on the <unk>.
Michael: Continued macro uncertainties, what other playoffs fails.
Michael: We either need us.
Michael: Clearly consolidating sector and continue to display the unique characteristic of profitable growth.
Michael Kliger: Our improved gross margin, the strong growth of top customer spend, the outstanding high average order value, and the excellent customer satisfaction, all highlight Fundamental Strengths of Our Business.
Michael: Our improved gross margin with strong growth of top customer spend the outstanding high average order value and the excellent customer satisfaction all highlights.
Michael: Fundamental strengths of our business model.
Michael Kliger: I wish to highlight today three key messages to you that make us stand out in the third quarter and demonstrate the strengths of the MyTheresa business despite ongoing macro uncertainty. First, our unique focus on high spending wardrobe building luxury shoppers drove again our solid profitable growth around the world. We build a community for true luxurious users and we create desirability with them also through unique physical experience. Second, the strong relationship that we have with big spending wardrobe building luxury customers continues to drive the desire of our luxury brands to partner. This gave us again access to many exclusive capsule collections and pre-launched campaigns that in turn drove our global business growth in the third quarter of this year.
Michael: I wish to highlight today three key messages to you, but make us stand out in the third quarter and demonstrates the strength of the mitral redo the business despite ongoing macro uncertainties.
Michael: First our unique focus on high spending wardrobe building luxury shopper drove again, our solid profitable growth around below <unk>.
Michael: We build a community for true luxury Suvs.
Michael: We create the viability with them also through unique physical experience.
Michael: Second the strong relationship that we have.
Michael: Spending module building luxury customers continues to drive the desire by luxury brands to partner with them.
Michael: This gave us again access to many exclusive capsule collections and prelaunch campaign and in turn drove our global business growth in the third quarter of fiscal year 2025.
Michael Kliger: Third, our very resilient and consistent business model and execution allowed us to significantly improve many of our key performance indicators in the third quarter. Spending Gross Margin, Outstanding AOV, and Increasing Top Customer Spend were again drivers for improving profitability in terms of adjusted EBDA in the third quarter.
Michael: Our very resilient and consistent business model and execution allowed us to significantly improve many of our key performance indicators in the third quarter expanding gross margin outstanding.
Michael: And increasing top customer spends were again drivers for improving profitability in terms of adjusted EBITDA in the third.
Michael: Okay.
Michael Kliger: Let me now comment in more detail on these three messages. First, let's look how building a global community for luxury enthusiasts is driving our business. In the third quarter, our GMV with top customers grew by plus 7.8% compared to the prior year period. Underlining Resilience of Top Customers to Macrohead. This growth was largely driven by an outstanding increase of the average spend per top customer in terms of GMV by plus 17.9% in Q3 fiscal year 25 versus Q3 fiscal year 24. In the United States, our business with our top customers even grew by plus 12% driven by the impressive growth of average spend per U.S.
Michael: Let me now comment in more detail on these three messages.
Michael: Let's look how building a global community for luxury is UBS is driving our business.
Michael: In the third quarter, our <unk> was top customers grew by plus seven 8% compared to the prior year period.
Speaker Change: Underlining resilience of top customers to Mark go ahead.
Speaker Change: This growth was largely driven by an outstanding increase of the average spend the top customer in terms of <unk> by plus 17, 9% in Q3. This year 25 versus Q2 fiscal year 'twenty four.
Speaker Change: In United States, our business with our top customer even grew by plus 12% driven by the impressive growth of average spend per use top customer plus 17.8 cars.
Michael Kliger: top customer of plus 17.8%. We mentioned already in the last quarter our two-week immersive invite-only APRESKI experience in Aspen in collaboration with Bammerman's Bar. This is a great example of how we are able to attract high-net-worth customers in the United States. Over 1,800 guests were seated over 17 days in the pop-up, and over 2,300 contact details were captured with 56% registrants being new contacts. Since signing up for the event, guests have generated a total revenue of €830,000, and their repurchase rate is already at 48%. Our clear vision is to build the strongest relationships with our top customers and we therefore constantly engage In the third quarter, we hosted again various events for our top customers across the globe.
Speaker Change: You mentioned already in the last quarter, our two week immersive invite only upgrade <unk> and Aspen in collaboration with <unk>.
Speaker Change: This is a great example, how we are able to attract high net worth customers in the United States.
Speaker Change: Over 1800 guests were seated.
Speaker Change: Over 17 days in the pop up and over 2003 and the contact details were captured with Fitch.
Speaker Change: 66% registered in the new context.
Speaker Change: Since signing up for the event guests have generated a total revenue of 830000 euro.
Speaker Change: And then the repurchase rate is already at 48%.
Speaker Change: Our clear ambition is to build the strongest relationships with our top customers and we therefore constantly engaged with it.
Speaker Change: Third quarter, we hosted again various events our top customer.
Speaker Change: The globe examples include style sweep in Miami.
Michael Kliger: Examples include StyleSweep in Miami, Dusseldorf, San Francisco, New York, and Hong We hosted Michelin-starred dinners in Houston, Washington, D.C. We invited top customers to an intimate lunch in the Cade showroom, allowing top customers to meet with Kathryn Holstein, founder and creative director. as well as seeing the latest pieces from the newest collection. Together with Caroline Herrera, we welcome top customers at the Hotel de Criant, where Creative Director Wes Gordon shared the inspiration and artistry behind his latest runway collection, followed by a lunch with his Moreover, we partnered again with Porsche for a driving experience in Los Angeles, and for the first time, with FAT Ice Race, inviting top customers to a motorsport racing experience on ice in Austria, including a cocktail moment with Spurden and Ford.
Speaker Change: Please go to New York and home.
Speaker Change: We hosted Michelin starred dinners in Houston, and Washington D. C. We invited top customers to an intimate lunch, we vacate in the cage home, allowing top customers to need with Catherine Holstein founder and creative director.
Speaker Change: As well as seeing the latest pieces from the newest collection.
With Carradine Herrera, we welcome top customers at the hotel.
Speaker Change: New York, where creative director West Gordon shared the inspiration and occupancy behind his latest runway collection, followed by a lunch with me.
Speaker Change: Moreover, we partnered again was Porsche for driving experience in Los Angeles and for the first time with fat ice raids and by gaining top customer to a more towards sport rights racing expands on Austria.
Speaker Change: Austria, including a cocktail moment with spirit and then of course please.
Michael Kliger: Please see our investor presentation for more details on our various top customers. to fulfill our ambition. to build a community for luxury enthusiasts through digital and physical experiences we organize for our top customers. True money can't buy In the third quarter, top customers were invited to an event with Alaia & Wenz, including a dinner on the first night at the famous Harry's Bar, a private tour for the very first time in the renowned Miele's Knitwear Factory in Wichtenza, and a beautiful dinner to conclude the event at Villa Valmara. We hosted an exclusive dinner with the creative director Christopher Esper of the namesake brand at Lula Restaurant during Paris Fashion Week.
Speaker Change: Please see our investor presentation for more details on our various top customers.
Speaker Change: To fulfill our ambition.
Speaker Change: To build a community for luxury and its users through digital and physical experiences we organized our top customers.
Speaker Change: All money can't buy experiences in the third quarter top customers were invited to and you ended with Elia and <unk>, including a dinner and the first nine of the famous Harry's bar.
Speaker Change: <unk> for the very first time and the renowned Needless knitwear factory and these tenants.
Speaker Change: And the beautiful data to conclude the event.
Speaker Change: Got it.
Speaker Change: We hosted an exclusive dinner with a creative director Christopher Expo the namesake brand.
Speaker Change: The restaurant, you're in Paris fashion.
Michael Kliger: We hosted a two-day experience with Pateau in Paris to celebrate the exclusive capsule collection for MyTheresa. The first day included an afternoon tea at the private apartment of the brand's creative director, Guillaume Henry, followed by an elegant dinner at Brasserie Le Mil. Second day, top customers were invited to explore Paris with a curated guide to the city's hidden gems by Guillaume, concluding with an intimate lunch at Brasserie Lippe. Together with Pomelato, we also hosted top customers for a two-day Milan experience, including a private tour of the renowned Casa Pomelato factory, an elegant dinner at Craco in Galleria, a Pomelato showroom visit, a private guided tour of Casa Fornafetti, and a lunch at the iconic Bicce restaurant.
We hosted a two day experience with part two in Paris to celebrate the exclusive capsule collections, but my Teresa. The first day included in the afternoon tea at the private apartment of the brand's creative director <unk> <unk>, followed by an alligator DNA, but also lead the second day.
Speaker Change: Top customers were invited to explore Paris was a curated guide to the city's hidden gems by usual concluding with an incumbent lungs.
Speaker Change: So arena.
Speaker Change: Together with <unk>, we also hosted top customers for two day neon experience, including a private tour of the renowned car supplement auto factory and elegant Dana.
Speaker Change: Conoco in Galleria and <unk>.
Speaker Change: Lotto showroom visits private guided tour of Kazakhstan, Turkey, and a lunch at the iconic Beecher restaurants.
Michael Kliger: Finally, we host the Texan Experience with Pucci to celebrate the launch of the exclusive Pucci capsule collection in Austin. The afternoon started with an intimate cocktail moment with Pucci's artistic director, Camille Micheli, followed by a cocktail party at the famous Austin Motel, where guests were treated to custom cowboy head-shaping, a live country music band, and lively two-step dance performance. In addition to providing our top customers memorable experience, such events also create brand awareness for the MyTheresa brands through global social media.
Speaker Change: Finally, we hosted the textron experience with Gucci to celebrate the launch of the exclusive Gucci capsule collection.
Speaker Change: Afternoon started with an intimate cocktail moment was pucci artistic director County, <unk> followed.
Speaker Change: Followed by a cocktail party at the famous Austin Hotel, where guests were treated to custom cowboy hat shaping alive country music band and likely to step vans performances.
Speaker Change: In addition to providing our top customers and memorable experiences such events also create brand awareness for the <unk> brands to global social media amplification.
Michael Kliger: Please see our investor presentation for more details on these unique money-consumption strategies.
Speaker Change: Please see our investor presentation for more details on these unique money can buy experience.
Second our strong relationship with such customers clearly drive the desire of luxury brands apartments.
Michael Kliger: Second, our strong relationship with such customers clearly drives the desire of luxury brands to partner. One evidence for the strong trust and support we enjoy is the recent expansion of our partnership with Prada, which allows us now to distribute Prada products globally, effectively doubling our reach and our business potential with the brand. The third quarter saw again many high-impact campaigns and exclusive product launches that drove our global business growth with high-spending wardrobe-building customers. We launched exclusive women's wear and men's wear runway looks from Loewe, as well as exclusive bags and accessories from the Loewe Luna New Year collection for women.
Speaker Change: One evidence for the strong trust and support we enjoy is the recent expansion of our partnership with pop, which allows us now to distribute product products globally, effectively doubling our reach and our business potential with the brands.
The third quarter, so again, meaning high impact campaigns and exclusive product launches that drove our global business growth with high spending wardrobe building customers, we launched exclusive women's wear and men's wear runway looks from Louisville, as well as exclusive bags and accessories from the wave of lunar new year collection for women.
Michael Kliger: We launched an exclusive capsule collection by Manolo Blahnik for womenswear and menswear, only available at MYT. We were the exclusive pre-launch partner for Totem's T-Lock clutch bags and the Totem Garderobe collection. as well as Actual Spring-Summer 25 collection. We also launched exclusive women's wear styles from Balenciaga's Summer 25 collection and exclusive men's wear styles from Tod's Spring Summer 25 collection. Please see our investor presentation for more details on brand collaborations in the third Such unique offers drove the interest by wardrobe building big luxury spenders and thereby our solid top line in the third quarter of this year.
Speaker Change: We launched an exclusive capsule collection inbound Angola blahnik for women's wear in minutes with only available at Mitel.
Speaker Change: We were the exclusive prelaunch partner called <unk> T Lac clutch bags and to Tim now the all with connections.
Speaker Change: As well as actual spring summer 'twenty five college.
Speaker Change: We also launched exclusive women's wear styles from balance Giaga somewhat 2000 cloud collection and the exclusive men wear menswear styles from towards spring Summer 'twenty five collection.
Speaker Change: Please see our investor presentation for more details on brand collaborations in the third quarter.
Speaker Change: Such unique offers drove the interest by wardrobe building big luxury spend though and thereby our solid topline in the third quarter of fiscal year 'twenty five.
Michael Kliger: We grew our net sales by plus 3.8% compared to Q3 of this year 24. The first nine months of fiscal year 25, net sales grew by plus 8%. The United States saw similar growth with plus 3.9% in Q3 fiscal year 25, while in Europe, including Germany and UK, we experienced a very strong net sales growth with plus 8.1% in the third quarter compared to the prior year period.
Speaker Change: We grew our net sales by plus three 8% compared to Q3 fiscal year 2004.
Speaker Change: The first nine months of fiscal year 'twenty five net sales grew by plus 8%.
Speaker Change: United States saw similar growth was plus three 9% in Q3 fiscal year 'twenty five while in Europe, including Germany, and UK, we experienced a very strong net sales growth was plus eight 1% in the third quarter compared to the prior year period.
Speaker Change: Sure.
Michael Kliger: In the third quarter of HISTY Year 25, we continue to improve our business performance thanks to our very resilient and consistent business. Martin will talk in a few minutes about the details of our bottom line results for the third quarter, but let me provide you with some key operational highlights. We achieved outstanding customer satisfaction measured by our internal net promoter score that reached a record high of 86% in Q3 this year. demonstrating the consistent excellence of our customer service proposition. Our average order value last 12 months increased by plus 8.8% to an outstanding €7,753 in Q3 fiscal year 25, demonstrating the success of our focus on selling full price high end luxury products to top customers.
Speaker Change: In the third quarter fiscal year 'twenty five we continued to improve our business performance, thanks to our very resilient and consistent business.
Speaker Change: Martin will talk in a few minutes about the details of our bottom line results for the third quarter, but let me provide you with some key operational highlights.
Speaker Change: We achieved outstanding customer satisfaction measured by our internal net promoter score and reached a record high of 86% in Q3. This year 25, demonstrating the consistent excellence of our customer service proposition.
Speaker Change: Our average order value last 12 months increased by plus eight 8% to an outstanding year Rose 70, 753 in Q3 fiscal year 2005, demonstrating the success of our focus on selling full price high end luxury products to top customers.
Michael Kliger: Furthermore, our gross margin improved by 140 basis points, which underlined our successful strategy of full price selling. Our return rates decreased in the third quarter, also contributing to the strong profitability of plus 3.9% in terms of adjusted EBITDA margins.
Speaker Change: Furthermore, our gross margin improved by 140 basis points, which underline our successful strategy of re pricing our REIT.
Speaker Change: Churn rates decreased in the third quarter also contributing to the strong profitability of plus three 9% in terms of adjusted EBITDA margin.
Michael Kliger: All these operational highlights serve as a testament to the fundamental strengths of our With all the above, it should come as no surprise that we are very pleased with our performance of the third quarter of fiscal year 2020. We see this quarter as further proof that our business can deliver profitable growth, even under ongoing macro uncertainties, due to the strengths of our model and consistency of our execution. This proven strength and the track record of our teams for excellent execution drives our strong confidence in creating enormous value through the acquisition of Duke's Net-A-Porter.
Speaker Change: All of these operational highlights serve as a testament to the fundamental strengths of our business.
Speaker Change: With all of the above it should come as no surprise that we are very pleased with our performance in the third quarter fiscal year 2025.
Speaker Change: We see this quarter is further proof that our business can deliver profitable growth even on the ongoing macro uncertainties due to the strength of our model and consistency of our execution.
Speaker Change: This proven strengths and the track record of our team's excellent execution drives our strong confidence in creating enormous value to the acquisition of <unk> net a porter.
Martin Beer: And now I hand over to Martin to discuss the financial results in deep. Thank you, Michael.
Speaker Change: And now I hand over to Martin to discuss the financial results in detail.
Martin: Thank you Michael it's.
Martin Beer: As Michael already mentioned, we are very excited about our successful closing of the Uix-Net-A-Porter acquisition on April Thank you, Michael. closing in April. falls within our fiscal fourth quarter. And as such is not reflected in the reported numbers for fiscal Q3 reporting, which covers the period from January to March 2025.
Speaker Change: As Michael already mentioned, we are very excited about our successful closing of the <unk> and Thats a buffet acquisition on April 2000 and search.
Martin: Closing in April.
Martin: Falls within our fiscal fourth quarter.
Martin: And as such is not reflected in the reported numbers for fiscal Q3 reporting which covers the period from January to March 2025.
Martin Beer: For this reason, We will dedicate today's call to my Teresa's Fiscal Q3 report. Tomorrow on May 15.
Martin: For this reason.
Martin: We will dedicate todays call.
My Teresa just get Q3 reporting.
Tomorrow on May 15.
Martin Beer: We have an additional call scheduled to provide more details on the newly formed group structure of Lux Experience, key strategic initiatives, financial details, as well as plans and strategic direction moving forward. Therefore, let's talk today about our fiscal Q3 reporting ended in March 31st. 2025. We're very pleased with the financial performance in the third quarter and also in the past nine months of fiscal year 2025. in the court. We achieved a solid net sales growth of plus 3.8%. fully in line with Our AOV LTM again increased plus 8.8% to a record high of €753 per order delivered.
We have an additional calls scheduled to provide more details on the newly formed group structure of flex experience.
<unk> strategic initiatives.
Martin: National details as well as our plans and strategic direction moving forward.
Martin: Therefore, let's talk today about our fiscal Q3 reporting ended in March 31.
Martin: 2025.
Martin: We're very pleased with our financial performance in the third quarter and also in the past nine months of fiscal year 2025.
Martin: In the quarter.
Martin: We achieved a solid net sales growth plus three 8%.
Martin: Fully in line with our guidance.
Martin: Our LTM.
Martin: LTM again increased plus eight 8% to a record high of 753 euros per order delivery.
Martin Beer: Our Gross Margin Expansion, which we've also seen in the two last quarters. continues with now 140 basis points improvement in the quarter. We continued to increase our profitability with an adjusted EBITDA margin of plus 3.9% in the quarter. We also achieved positive operating cash flow of $18.7 million. stable inventory levels compared to previous year and achieving our day's inventory outstanding target of 260 days. This underlines my thesis unique position. The track record. Profitable Growth. at the high end of true luxury in an overall tough market environment.
Martin: Our gross margin expansion, which we've also seen in the two last quarters.
Martin: Continues with now 140 basis points improvement in the quarter.
Martin: We continued to increase our profitability.
Martin: With an adjusted EBITDA margin of plus three 9% in the quarter.
Martin: We also achieved positive operating cash flow of $18 7 million with stable inventory levels compared to previous year and achieving our days inventory outstanding target of 260 days.
Martin: This underlines <unk> unique position.
Martin: A track record.
Martin: Profitable growth.
Martin: The high end of true luxury and an overall tough market environment.
Martin: I will now review the financial results for the third quarter covering generate first through March 31 2025.
Martin Beer: I will now review the financial results for the third quarter, covering January 1st through March 31st, 2025, in more detail and give additional information on certain key developments affecting our performance during the quarter. Unless otherwise stated, all numbers refer to Europe. In the first quarter, net sales grew by 8.9 million or plus 3.8% to 242.5 million as compared to 233.6 million in the prior year quarter. GMB for all customers grew by plus 8.9% While the GMV per cup customer grew even stronger by an impressive 17.9%. during Q3 of fiscal year 25. The first nine months.
Martin: More detail and give additional information on certain key developments affecting our performance during the quarter.
Martin: Unless otherwise stated all numbers for Europe.
Martin: In the first quarter net sales grew by $8 9 million or plus three 8% to $242.
Martin: $5 million as compared to $233 6 million in the prior year quarter.
Martin: The GMB for all customers grew by plus eight 9%.
Martin: While the <unk> customer grew even stronger by an impressive 17, 9%.
Martin: During Q3 of fiscal year 'twenty five.
Martin: The first nine months.
Martin: <unk> 25, net sales grew by plus 8% to.
Martin Beer: to $667.2 million. fully in line with our given top line guidance for the full fiscal year. GMB increased by $9.5 million to $261.3 million. The third quarter of fiscal year 25, also a plus 3.8% increase. from 251.9 million in the prior year. increasing by €61. for Auto Deliver. Our average order value, LTM, grew by plus 8.8%, now standing at a record high of €753 as compared to €692 in the prior year period. The increase in AOV strength. Unit Economic and highlights our strategy of full price selling. High End. Our growth was well-balanced worldwide, with our core market Europe growing by plus 8.1%, with a net sales share of 53.8%.
Martin: So 606 to $7 2 million.
Martin: Fully in line with our given top line guidance for the full fiscal year.
Martin: <unk> increased by $9 5 million to $261 3 million.
Martin: The third quarter of fiscal year 'twenty five also a plus three 8% increase.
Martin: $251 9 million in the prior year period.
Martin: Increasing by 61 Euro.
Martin: For order delivered.
Martin: Our average order value of LTM grew by plus eight 8% notwithstanding a record high of 753 euros as compared to 692 euros in the prior year period.
Martin: The increase in <unk> strengthens our unit economics.
Martin: And highlights our strategy of full price selling.
Martin: The high end of luxury.
Martin: Our growth was well balanced worldwide with our core market Europe growing by plus eight 1%.
Martin: So the net sales share of 53, 8%.
Martin Beer: The U.S. had a share of 22.5%, rest of the world. 3.7. In the third quarter of fiscal year 25, gross profit. increased by plus 7.2% 208.5 million from $101.3 million in the prior year quarter. The gross profit margin increased by 140 basis points. to 44.8% as compared to 43.4% in Q3 of fiscal year 24. This is fully live. what we achieved in the preceding quarter. In a less competitive and discount-driven market, we stay true. to our strategy of a higher full price share in our curated offer and thus able to improve our gross profit margin.
Martin: The U S had a share of 22, 5% rest of world of 23, 7%.
Martin: In the third quarter of fiscal year 'twenty five gross profit increased by plus seven 2%.
Martin: $108 5 million.
Martin: From $101 3 million in the prior year quarter.
Martin: The gross profit margin increased by 140 basis points to 44, 8% as compared to 43, 4% in Q3 of fiscal year 'twenty four.
Martin: This is fully in line.
What we achieved in the preceding quarters.
Martin: In a less competitive and discount driven market, we stay true.
Martin: So our strategy.
Martin: For sure in our curated offer.
Martin: And thus.
Martin: Able to improve our gross profit margin.
Martin: In the last nine months fiscal year 'twenty five our gross profit margin increased by 150 basis points.
Martin Beer: the last nine months. of the Year 25, our gross profit margin increased by 150 basis points. The shipping and payment cost ratio by 130. third quarter from 15.3% prior to now 14% of GNV. The decrease is mainly driven by continuously improving unit economic resulting from the increase in AOV and lower return. The same effect is visible for the first nine months of fiscal year 25, during which the shipping and payment cost ratio decreased by 90 basis points. 13.8% compared to 14.7% in the prior year period. The marketing cost ratio increased from 9.2% to 10.2%. As we continue to invest in capturing market share, we built on our successful strategy of investing marketing efforts directed towards our top customer base and brand while maintaining efficiency.
Martin: The shipping and payment cost ratio decreased.
Martin: 130 basis points in the third quarter from 15, 3% prior year to now 14 points.
Martin: Obviously JV.
Martin: The decrease.
Martin: Is mainly driven by continuously improving unit economics, resulting from the increase in <unk> and lower return rates.
Martin: The same effect is visible for the first nine months of fiscal year 'twenty five.
Martin: Joining rich the shipping and payment cost ratio decreased by 90 basis points.
Martin: 13, 8% compared to 14, 7% in the prior year period.
Martin: Our marketing cost ratio increased from nine 2% to 10.2% as.
Martin: As we continue to invest in capturing market share we built on our successful strategy of investing marketing efforts directed towards our top customer base and brand campaigns.
Martin: While maintaining efficiency and targeting high quality first time buyers.
Martin Beer: Targeting High-Quality First time by. Throughout the quarter, we increased our marketing activities in line with this approach. The adjusted selling general and administrative SG&A cost ratio in the fiscal third quarter stood at 13%. lower what we've seen in previous. In relation to fiscal Q3 of the previous year, the cost ratio increased modestly by 80 basis points from 12.2% to 13%. During the first nine months. It's just that SG&A cost ratio. 40 basis points. 14% prior period to now 13.6%. In Q3 of FY25, adjusted EBITDA increased. 0.5 million to 9.3 million. from 8.9 million in the prior year quarter.
Martin: Throughout the quarter, we increased our marketing activities in line with this approach.
Martin: The adjusted selling general and administrative SG&A cost ratio in the <unk>.
Martin: <unk> third quarter.
Martin: 13%.
Martin: Lower what we've seen in previous quarters.
And it relates to fiscal Q3 of the previous year, the cost ratio increased modestly by 80 basis points from 12, 2% to 13%.
Martin: During the first nine months of.
Martin: Fiscal year 'twenty five.
Martin: Adjusted SG&A cost ratio decrease.
Martin: 40 basis points.
Martin: 14% prior year period to now 13, 6%.
Martin: In Q3 of fiscal year 'twenty, five adjusted EBITDA increased $7 5 million to $9 3 million.
Martin: From $8 9 million in the prior year quarter, adjusted EBITDA margin increased from three 8% to three 9%.
Martin Beer: It's just that even though margin 3.8% to 3.9% For the first nine months. TheFNDC.com Page 2 of 2 by $13.2 million as an adjusted EBITDA margin. 4.3%. compared to 2.5%. in the previous year period. fully supporting our guidance for the full Depreciation and amortization remained stable at 3.9 million and 1.5% of GMB in Q3 of fiscal year 25 compared to the previous year.
Martin: For the first nine months of fiscal year 2005.
Martin: Adjusted EBITDA increased significantly by $13 2 million.
Martin: And then adjusted EBITDA margin.
Martin: Four 3% comp.
Martin: Compared to two 5%.
Martin: In the previous year period.
Martin: Fully supporting our guidance for the full fiscal year.
Martin: Depreciation and amortization remained stable at $3 9 million.
Martin: One 5% of <unk> in Q3 of fiscal year 2005, compared to the previous year period.
Martin: Our profitable growth.
Martin Beer: Our Profitable Growth also evidence at adjusted operating income and adjusted net income level. The third quarter of fiscal year 25, adjusted operating income was at 5.5 million, a 20 basis points increased margin at 2.3%. For the first nine months in fiscal year 25, Adjusted Operating Income was at $16.6 million. 2.5% margin with a significant improvement to previous year. We also delivered positive adjusted net. in the quarter at 5.4 million and for the first nine months of fiscal year 25 adjusted net income was at 21.4 million at a 3.2 percent also significantly improving from last year.
Martin: It's also evident at adjusted operating income.
Martin: Adjusted net income level.
Martin: In the third quarter of fiscal year 'twenty five adjusted operating income was at $5 5 million, a 20 basis points increase margin at two 3%.
Martin: For the first nine months in fiscal year 2000, <unk> adjusted operating income was $16 6 million or two 5% margin with a significant improvement to previous year.
Martin: We also delivered positive adjusted net income.
Martin: In the quarter at $5 4 million and for the first nine months of fiscal year 'twenty five adjusted net income was at $21 4 million a three 2% margin also significantly improving from last year.
Martin Beer: Let's take a look at the cash. During the third quarter of fiscal year 25, we achieved a positive cash flow from operating activity. Plus 18.7 million compared to minus $11.6 million in the previous year quarter. This is a 30.3 million positive test. Driven by effective working capital management. for the first nine months. Operating cash flow only used up $13.9 million compared to $26.4 million in the prior period. This is mainly driven by our careful management of the inventory level. Our inventories stood at $372.8 million. Police Stable. to the beginning of the fiscal year. and despite a 8% net sales growth in the first nine months.
Martin: Let's take a look at the cash flow statement.
Martin: During the third quarter of fiscal 'twenty, we achieved a positive cash flow from ops.
Martin: Operating activities.
Martin: Plus $18 7 million.
Martin: Compared to minus $11 6 million in the previous year quarter.
Martin: This is a $33 million positive cash swing.
Driven by effective working capital management.
Martin: For the first nine months.
Martin: Operating cash flow only used up $13 9 million.
Martin: Compared to $26 4 million in the prior year period.
Martin: This is really driven our careful management of inventory levels.
Martin: Our inventories stood at $372 8 million.
Martin: Stable.
Martin: Compared to the beginning of the fiscal year.
Martin: And despite a 8% net sales growth in the first nine months of fiscal year 'twenty five.
Martin Beer: Fiscal Year 25. As of March 31st, 2025, our days inventory outstanding were right at our long-term target of 260 days. Cash flow from investing only used up $0.6 million in the quarter, and only $2.3 million in the first nine months of FY25. The heavy investments in our new tech platform. and the move to a new sensorware. All have been completed successfully. And we're now returning to our expected long term capex average of below 1% of GMB. We ended the quarter with $14.2 million cash at hand and a $25 million cash utilization of our $75 million revolver.
Martin: As of March 31, 25 hour days inventory outstanding variety that our long term target of 260 days.
Martin: Cash flow from investing only used up zero point $6 million in the quarter and only $2 3 million in the first nine months of fiscal year 'twenty five the heavy investments in our new Tech platform.
Martin: And the move to a new central warehouse.
Martin: All have been completed successfully.
Martin: And we're now returning to our expected long term capex average of below 1% of JMP.
Martin: We ended the quarter with $14 2 million cash at hand.
Martin: A $25 million cash utilization of our $75 million revolver.
Martin Beer: The solid financial performance in the third quarter of FY25 is fully in line with our expectations and supports our given guidance for the full fiscal year on all levels. The New Tariff Situation. Especially its impact on customer sentiment and the global economy. still remains unclear. We therefore, for the full fiscal year ending June 30th. 25. Expect the lower end. are given guidance of GMB and net sales growth between 7% and 13%. For the legacy, my trees are standalone. Given our continued focus on profitability. We confirm our guidance on adjusted EBITDA. between three and five percent.
Martin: The solid financial performance in the third quarter of fiscal year 'twenty five is fully in line with our expectations and supports of given guidance for the full fiscal year on all levels.
Martin: The new tariff situations.
Martin: And especially its impact on customer sentiment and the global economy.
Martin: Still remains unclear.
Martin: We therefore for the full fiscal year ending June 30th.
2025.
Martin: Expect the lower end of.
Martin: Or given guidance of <unk> net sales growth between seven and 13%.
Martin: For the legacy <unk> Standalone business.
Given our continued focus on profitability.
Martin: We confirm our guidance on adjusted EBITDA margin between three and 5%.
Martin Beer: The acquisition of Uix-Nez-a-Porter in the fourth quarter of our fiscal year 25 is expected to add another 300 to 350 million net sales. and an adjusted EBITDA loss of $20 to $30 million. to the Legacy MyTresa Standalone Business, Fiscal Year 25 number. Ending on June 30, 2025.
Martin: The acquisition of <unk> in the fourth quarter of our fiscal year 'twenty five.
Martin: It is expected to add another $300 million to $350 million net sales.
Martin: And then adjusted EBITDA loss of $20 million to $30 million.
Martin: So the legacy Mitra as a standalone business fiscal year 'twenty five numbers.
Martin: Ending on June 32025.
Martin Beer: With all of the above, it comes as no surprise that we are very confident. Continued success of MyTreesABusiness as a cornerstone of our new LexXperience group.
Martin: With all of the buff it comes as no surprise that we are very confident in the.
Martin: The continued success of <unk> the business as a cornerstone of our new less experienced group.
Martin Beer: With the successful closing of the acquisition of Jux Nat'Apote, we are very excited. Medium and Long-Term Outlook of the Combined Business. with our proven ability to And to show strong results, we reconfirm our medium-term outlook for the combined business. Chief, $4 Billion Net Sale. and an adjusted EBITDA margin.
Martin: With the successful closing of the acquisition of <unk>.
Martin: We are very excited.
Martin: The medium and long term outlook of the combined business.
Martin: With our proven ability to execute.
Martin: And to show strong results, we reconfirm, our medium term outlook for the combined business to achieve 4 billion net sales.
Martin: And an adjusted EBITDA margin of 729%.
Martin Beer: 7-9% In our tomorrow's call, we will provide more details on our exciting journey ahead.
Martin: And our Tomorrow's call, we will provide more details on our exciting journey.
Martin Beer: and therefore would welcome very much your participation in tomorrow's call on Lux Experience.
Martin: And therefore would welcome very much for your participation in Tomorrow's call on lacks experience.
Martin: And with that I hand over to Michael for his concluding remarks.
Michael Kliger: And with that, hand over to Michael for his concluding remarks. Thank you, Martin. We are very pleased with our third quarter fiscal year 2025. We have seen a continued performance improvement this quarter. With this strength and consistency of our business model, we see ourselves well positioned any further, my crew. We continue to focus on building a community for true luxury enthusiasts worldwide. and creating desirability through digital and physical experience.
Michael: Thank you Margaret.
We're very pleased with our third quarter fiscal year 2020.
Speaker Change: Five earning stream.
Speaker Change: We have seen a continued performance improvement this quarter.
Speaker Change: The strength and consistency of our business model.
See ourselves well positioned for any further macro uncertainties.
Speaker Change: We continue to focus on building a community for true luxury and some good worldwide.
Speaker Change: And creating desirability through digital and physical experiences.
Michael Kliger: We see ourselves as well-prepared for the formation of Lux Experience and the transformation of the combined business to the world's leading multi-brand digital luxury platform, creating significant value for our high-end customers, brand partners, and shell.
Speaker Change: We see ourselves as well prepared for the formation of <unk>.
Speaker Change: And the transformation of the combined business to the world, leading multi brand digital luxury platform, creating significant value for our high end customers brand partners and shareholders.
Operator: And with that, I ask the operator to open the line for your questions. Thank you.
Speaker Change: And with that I'll ask the operator to open the line for your questions.
Thank you ladies and gentlemen, we will now begin the question and answer session. Once again, if you have dialed in and would like to ask a question. Please press star followed by the number one on your telephone keypad. If you would like to withdraw your question simply press Star One again as a reminder, we ask everyone to stick to one question and one follow up so we can take as many questions as.
Operator: Ladies and gentlemen, we will now begin the question and answer session. Once again, if you have dialed in and would like to ask a question, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. As a reminder, we'll ask everyone to stick to one question and one follow up so we can take as many questions as possible. Thank you. 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 Once again, that is to press star 1 to ask a question.
Speaker Change: Possible. Thank you. If you are called upon to ask your question and our listening via loud speaker under device. Please pickup your handset indicated that Youre only started we had been asking your question. Once again that is to press star one to ask a question.
Katie: The first question comes from the line of Oliver Chen with TD Cowen, please go ahead. Hi there, this is Katie on for Oliver Chen. I'd like to ask a question about the 4Q sales guidance and what's assumed for the legacy MyTheresa business. I know you spoke to sales sort of at the lower end of the original fiscal year guidance. Can you talk through your assumptions for the consumer health and consumer reaction to the current environment and how that's derived from any trends you saw during the quarter or even quarter to date? And then what's assumed for both pricing as well as sort of the number of orders?
Speaker Change: The first question comes from the line of Oliver Chen with TD Cowen. Please go ahead.
Although this is Katie on for Oliver Chen.
Katie: To ask a question about the <unk> sales guidance and what's assumed for the legacy business.
Speaker Change: Business.
Speaker Change: I know you spoke to sales.
Speaker Change: Sort of at the lower end of the original fiscal year guidance can you talk through.
Speaker Change: Your assumptions for the consumer health and consumer reaction to the current environment.
Speaker Change: And how that's derived from any trends you saw during the quarter or even quarter to date.
Speaker Change: And then what's assumed for both pricing as well as China.
Katie: And then I'll have a follow-up. Thank you.
Speaker Change: The number of orders and then I'll have a follow up thank you.
Speaker Change: Thank you.
Michael Kliger: I'm happy to give a bit of insight on the assumptions. But of course, mathematically, it's pretty clear what we assume if we believe we're at the lower end. I think the biggest challenge at the moment looking at Q4 is, of course, understanding how further decisions by the administration would influence Consumer sentiment. We have seen a lot of decisions at the beginning of April. Some of them were reversed. We saw very positive development on Monday. So, we at the moment expect a slower demand in the last quarter based on uncertainty, particularly in the North American market.
Speaker Change: Happy to give a bit of insight on the assumptions, but of course mathematically.
Speaker Change: Pretty clear what we assume if we believe we're at the low end.
Speaker Change: The biggest challenge at the moment looking at Q4 is of course.
Speaker Change: Understanding how.
Speaker Change: Decisions by the administrations would influence.
Speaker Change: Consumer incentives, we have seen a lot of decisions at the beginning of April some of them were reversed.
Speaker Change: So very positive develop on a Monday, so we at the moment.
Speaker Change: Okay.
Speaker Change: Lower demand in the queue.
Speaker Change: This last quarter based on uncertainty.
Speaker Change: Let me answer both of them.
Speaker Change: American markets.
Martin Beer: As we highlighted today in our call, the strongest region in Q3 was Europe with 8%. U.S. North America used to be the strongest region. So, that's where we feel uncertainty and therefore caution is warranted, as we simply don't know. I mean, how new changes would influence our business model of sending products through customs into North America. So current decreases for China made in China tariffs are great. There was a report that the minimum would be abolished. So these are all factors which We don't have specific assumptions other than we feel we expect further uncertainty. So that has dampened demand effectively.
Speaker Change: As we highlighted today in our call the strongest region in Q3 was Europe was 8%.
Speaker Change: U S North America used to be the strongest region. So that's where we feel uncertainty therefore caution.
Speaker Change: Okay.
As warranted.
Speaker Change: As we simply don't know.
Speaker Change: Paul.
Speaker Change: New changes.
Speaker Change: Our business model.
Speaker Change: Sending products.
Speaker Change: Drew customers into North America, So alright decreases for China made a giant jobs are great.
Speaker Change: There was a report.
Speaker Change: Limits would be abolished. So these are all factors, which.
Speaker Change: We don't have specific assumptions other than <unk>.
Speaker Change: We expect further uncertainties that has dampened demand effect.
Matthew Boss: I don't know, Martin, you want to add anything? Yeah, I mean, but you picked up the growth assumption for Q4, right? I mean, it's mathematically just easily done. I mean, fiscal year to date for the first nine months, we grew 8% net sales. So if we guide to the lower end of the 7% to 13% top line growth, that would apply that we are that we expect to grow in Q4. Obviously, at a low rate, four to four to 7% in Q4 to arrive at the at the lower end of the of the top line guide.
Martin: I don't know Martin do you want to add anything.
Speaker Change: Yes.
Speaker Change: But you picked up.
Speaker Change: The growth assumptions for Q4 right.
Speaker Change: Mathematically just isn't done.
Speaker Change: Year to date for the first nine months.
Speaker Change: We grew 8% net sales so if we guide to the lower end of the 17, 7% to 13%.
Speaker Change: Yeah.
Speaker Change: Topline growth that would imply that we are that we expect to grow.
Speaker Change: In Q4, obviously.
Speaker Change: At a low rate.
Speaker Change: Four two.
Speaker Change: Two 7% in Q4 to arrive at the at the lower end of the of the topline guidance.
Michael Kliger: Okay, and then just as a follow up to that, how you're thinking about the Pricing, and if you've seen any different changes in pricing versus the number of orders placed, and then as we think about gross margin, you know, what were really the most significant drivers to the gross margin improvement in Q3? So on pricing, I think we always have to consider the lag effects in our industry. I mean, we are currently selling spring summer. So we do understand that some brands are looking at price increases, some brands have done price increases, but that will most affect fall winter merchandise, which is arriving, but the current season is spring summer, which has price and Nigel Ghosn.
Speaker Change: Okay.
Speaker Change: And then just as a follow up to that how you're thinking about.
Speaker Change: Pricing and if you've seen any different changes in pricing versus the.
Speaker Change: The number of orders placed.
Speaker Change: And then.
Speaker Change: If you think about gross margin what we are really the most significant drivers to the gross margin improvement.
Speaker Change: Great.
Speaker Change: Okay.
Speaker Change: So on pricing I think we always have to consider the lag effect.
Speaker Change: History I mean, we are currently selling spring summer.
Speaker Change: No.
Speaker Change: Yes.
Speaker Change: To understand that some brands are looking at price increase of some brands have done price increases but.
Speaker Change: That will most affect fall winter merchandise, which is driving the car and seasonal spring summer with which has pricing right.
Speaker Change: Decisions.
Speaker Change: <unk> taken.
Speaker Change: Months ago. So that's in that part and gross margin the biggest influence our gross margin is full price selling how high is the shale price.
Speaker Change: That's the biggest driver for the.
Speaker Change: Margin improvements that we expect.
Speaker Change: Very helpful. Thank you.
Matthew Boss: Your next question comes from the line of Matthew Boss with J.P. Morgan. Please go ahead. Great, thanks.
Speaker Change: Your next question comes from the line of Matthew Boss with Jpmorgan. Please go ahead.
Matthew Boss: Great. Thanks, So Michael maybe larger picture, how do you see the luxury industry position today, just given the dynamic economic backdrop and maybe near term just based on the changes in sentiment that you cited have you seen any direct impact on spending to date.
Michael Kliger: So, Michael, maybe a larger picture, how do you see the luxury industry position today, just given the dynamic economic backdrop, and maybe near term, just based on the changes in sentiment that you cited? Have you seen any direct impact on spending to date so far with your core high net worth customer base, whether it was April or May in the U.S. or Europe, or is your guidance change more reflective of just the prudent potential that we could see a softening effect? Thank you, man. No, I think this is really influenced by the short term. impact that we have seen.
Matthew Boss: So far with your core high net worth customer base, whether it was April or May.
Matthew Boss: In the U S or Europe or is your guidance change more reflective of just the prudent potential that we could see a softening effect.
Speaker Change: Thank you Matt.
Matthew Boss: This is really influenced by the short term.
Speaker Change: Impact that we have seen.
Michael Kliger: It's a multi-faceted game. I mean, as you know, a lot of our customers are managers, are company owners. So a lot of these have kept them busy. I'm not in a position to say, oh, fundamentally, something in the market has changed. Was there something broken by these decisions? I don't see that. has have these decisions over the last couple of weeks really created uncertainties. Definitely. And as always, in the consumer game, stability is the key. If the new number is X, but that is a guaranteed new numbers, companies can adopt to it. Consumers can adopt it.
Speaker Change: Its a multi facet of the game I mean as you know.
Speaker Change: A lot of our customers are managing the company onerous. So a lot of these have kept them busy.
Speaker Change: Not in a position to say fundamentally something in the market has changed.
Speaker Change: There is something broken by these decisions.
Speaker Change: I don't see that.
Speaker Change: Has have these decisions over the last couple of weeks.
Speaker Change: Really created uncertainties that currently and then as always in the consumer game.
Speaker Change: Stability is the key.
Speaker Change: If the new number is X, but that is the guarantee numbers companies can adopt.
Speaker Change: Consumers can adopt it we have unfortunately seen more the numbers change all the time so at the moment, we are cautious, but we have also seen that.
Matthew Boss: We have unfortunately seen more, the numbers change all the time. So at the moment, we are cautious. But we have also seen that the mood has dampened. But I don't see at the moment any concerns that something has changed in the luxury. Okay, great.
Speaker Change: The mood has dampened, although I don't see at the moment that is any concerns that something has changed in the luxury industry.
Okay, Great and then Martin just maybe relative to this year's guidance for three years to 5% adjusted EBITDA margins for the legacy <unk> business.
Martin Beer: And then Martin, just maybe relative to this year's guidance for three to five percent adjusted EBITDA margins for the legacy MyTheresa business, what would be the timeline that you see for profitability to return back to the high single digit EBITDA margin that you realized pre-pandemic? Yeah, I mean, we always said that in the medium term, we want to go back to the seven to nine percent, and we will go back. The question is, the key determining factor of this reversal, we always mentioned, is the continuous improvement at the cross-border margin that we saw in the last two quarters, that we also see in this quarter, 140 basis points in in the last nine months, 150 basis points.
Speaker Change: What would be the timeline that you see for profitability to return back to the high single digit EBITDA margin that you realized pre pandemic.
Speaker Change: Yes.
Speaker Change: Yes, Matt I mean, we have always said that in the medium term, we want to go back to the 7% to 9% and we will go back.
Speaker Change: The question is.
Speaker Change: The key determining factor of this reversal, we always mentioned is the continuous improvement in the cross corporate margin that we saw in the last two quarters that we also see in this quarter 140 basis points in the quarter in the last nine months 150 basis points. So we are right on track.
Martin Beer: So, we are right on track in improving the overall adjusted EBITDA margin. And we also pointed out in the call, the higher AOV, lower return rates, all increase unit economics and also help on, for example, shipping and payment cost ratio. And for this, we expect a continuous improvement in the bottom line, and as our core focus stays on improving the profitability levels that we have showed in the last quarter. So, giving the uncertainty in the top line obviously has some effect on the profitability, but we explicitly kept the three to five percent bottom line guidance, because the focus is on maintaining and improving the bottom line profitability and all the underlying business elements of our business model are fully intact on the journey to improve the bottom line adjusted EBITDA profitability.
Speaker Change: In improving the overall adjusted EBITDA margin and you also we also pointed out in the call.
Speaker Change: The higher it will be lower return rates all increase unit.
Speaker Change: Unit Economics and also help on the for example.
Speaker Change: Shipping and payment cost ratio.
Speaker Change: And.
Speaker Change: For this we expect our continues improvement in the bottom line as our core focus stays on improving the profitability levels.
Speaker Change: We have shown over the last quarter, so with given the uncertainty in the top line obviously.
Speaker Change: Has some effect on the profitability, but we explicitly kept the 3% to 5% bottom line guidance because the focus.
Speaker Change: He is on maintaining and improving.
Speaker Change: The bottom line profitability and all the <unk>.
Speaker Change: Your line business elements of our business model.
Speaker Change: Our fully intact.
Speaker Change: On the journey to improve.
Speaker Change: The bottomline profitability to improve the adjusted.
Martin Beer: How and when we will come back to the seven to nine percent, this is in the medium term, and we will continue this trajectory.
EBITDA profitability.
Speaker Change: How and when we will.
Speaker Change: We will come back to the 7% to 9%.
Speaker Change: This this.
Speaker Change: This is.
Speaker Change: In the medium term and we will continue this trajectory and then our September call, we'll give the guidance for the next fiscal year fiscal year 'twenty 'twenty six and at that time, we will also have a much better visibility on the overall macro situation.
Matthew Boss: And then in our September call, we'll give the guidance for the next fiscal year, fiscal year 2026. And at that time, we'll also have a much better visibility on the overall macro situation that obviously is also a key driver. But the driving force is to continue to improve the bottom line profitability, fully intact, and we will strongly continue to follow that path to the seven to nine percent. That's great color. Michael, just one quick follow up on the dampening that you cited. Have you seen that both in the U.S. and in Europe? More so in the U.S.
Speaker Change: And that obviously is also a key key driver, but the driving forces to two.
Speaker Change: Continue to improve the bottom line profitability fully intact, and we will strongly.
Speaker Change: <unk> continued to follow that path to the 79%.
Speaker Change: That's great color Michael just one quick follow up on the dampening that you cited have you seen that both in the U S and in Europe.
Speaker Change: But more so in the U S.
Matthew Boss: Great. Best of luck.
Speaker Change: Great Best of luck.
Speaker Change: Once again, if you would like to ask a question. Please press star followed by the number one on your telephone keypad.
Operator: Once again, if you would like to ask a question, please press star followed by the number one on your telephone keypad.
Blake: This question comes from the line of Ashley Heldens Cozio with Jefferies. Please go ahead. Hi, this is Blake on for Ashley. Thanks for taking our questions. So just wanted to build on that last one.
Speaker Change: The next question comes from the line of Ashley Hogan called deal with Jefferies. Please go ahead.
Speaker Change: Hi, This is Blake on for Ashley Thanks for taking our questions. So just wanted to build on that last one in terms of the U S performance could you break out at all.
Blake: In terms of the US performance, could you break out at all, by providing a little bit more color on sales trends by month, and then aspirational versus your top customers in the US would be great to get a little bit more color there if you could. Yeah, easy on the second one, Blake. Our top customer group in the U.S. in the last quarter, our business group. Even by, I cited, like, the 12%. So that business is intact. It's a third of, as we have seen in the past. Quotas, it's always the lower medium and that was hit and uncertainty hit it again.
Speaker Change: By providing a little bit more color on sales trends by months, and then aspirational versus your top customers in the us would be great to get a little bit more color. There if you could.
Speaker Change: Yes.
Speaker Change: On the second one.
Speaker Change: Our top customer group in the U S in the last quarter our business grew.
Speaker Change: Even by fiber.
Speaker Change: <unk> like the 12% so that that business is intact.
Speaker Change: As we have seen in the past.
Speaker Change: Quarter, it's always the.
Speaker Change: Lower medium and that was a headwind uncertainty hit it again.
Michael Kliger: That's where it's happening. The resilience on the top side, the resilience on the ultra top is fully intact. With these shocks that you see, with these shocks that are so The Equity Markets Took This Time. The aspirational, the occasional customers. Not speaking to their wealth, just speaking to their spending patterns are always impacted more so and so it's an even deeper polarization.
Speaker Change: Where it's happening the resilience on the top side.
Speaker Change: Our resilience.
Speaker Change: Top is fully intact.
Speaker Change: With these shocks that you see with the shocks that also.
Speaker Change: Equity markets took this time.
Speaker Change: The aspirational.
Speaker Change: <unk> customers.
Bob: Bob speaking just switching to the spending patterns are always impacted.
Speaker Change: More so.
Speaker Change: So it's an even deeper a polarization but again.
Michael Kliger: But again, what we have observed seems to us Snapshots seems to us an immediate knee-jerk reaction to this as we have seen over the last Weeks there has been some reversal of it, but I will Not position to predict in which way we will go from here. And so on a month by month basis, It has started end of January and then you get peaks with events. I mean, we are really in an eventful moment. and stuff market, but it's also Microcrisis and Regions I don't know.
Speaker Change: What we have observed seems to us.
Speaker Change: A snapshot seems dawson immediate knee jerk reaction to this as we have seen over the last weeks there has been some reversal of it.
Speaker Change: But I will.
Speaker Change: Possession to predict.
Speaker Change: In which way we will go from here.
Speaker Change: And so.
Speaker Change: On a month by month basis.
Speaker Change: Yes.
It has started end of January and.
Speaker Change: And then youll get peaks with events.
Speaker Change: Okay.
Speaker Change: <unk> really an event for a moment.
Speaker Change: And the stock market, but it's also.
Speaker Change: Macro crisis in regions.
Speaker Change: I don't know.
Michael Kliger: It's almost impossible to predict. But that does not take anything away, as you can see from our numbers, the fundamental strengths. I mean, in a reversal, look at what is happening, and we can confirm our profitability, we can confirm margin improvement, we can confirm cost control. So while the top line is not fully controllable. Our business model allows us to control our bottom That's super helpful.
Speaker Change: Almost impossible to predict.
Speaker Change: But that does not take anything away as you can see from a lot of numbers and fundamental strength.
Speaker Change: In a reversal.
Speaker Change: Look at what is happening and we can confirm our profitability. We can confirm margin improvements we can confirm cost control. So while the top line is.
Speaker Change: Once fully controllable our business model allows us to control our bottom line.
Speaker Change: That's super helpful and just a follow up on that I wanted to I wanted to ask on gross margin, specifically and you kind of just referenced the ability to still grow margins and maintain profitability, but how should we think about in an environment, where maybe the aspirational customer slows down.
Michael Kliger: And just to follow up on that, I wanted to I wanted to ask on gross margin specifically, and you kind of just reference the ability to still grow margins and maintain profitability. But how should we think about in an environment where maybe the aspirational customer slows down? Can you still grow gross margins? Or how much incremental promotions do you see yourself doing? Wondering how you think about your target of maintaining gross margin expansion versus maybe leaning into promotions or any other headwinds that you might foresee that would limit that ability. No, we are absolutely able to further increase margin, the pace and the size of it.
Speaker Change: <unk>.
Speaker Change: Can you still grow gross margins or how much incremental promotions do you see yourself doing wondering how you think about your target of maintaining gross margin expansion versus maybe leaning into promotions or any other headwinds that you might foresee that would limit that ability.
Speaker Change: No.
Speaker Change: Absolutely able to further increase margin.
Speaker Change: The pace.
Speaker Change: And the size of it.
Michael Kliger: We won't guide now, but we absolutely have the ability to further improve our cross-margin. Got it.
Speaker Change: We won't guide now, but we absolutely have the ability to further.
Speaker Change: Improve our gross margin.
Speaker Change: Got it and then last one was just wondering if you had any more color on your exposure to brands that are manufactured in China.
Michael Kliger: And then last one was just wondering if you had any more color on your exposure to brands that are manufactured in China? Maybe how that is impacting your business? And if you could talk any more about, you know, indirect versus direct tariff impacts, and maybe China exposure specifically. I mean, we had different tariff impacts. One is, of course, that there is a flat increase by 10% for product going into the US. And then of course, Made in China. My understanding is there was a decision to reduce them for the moment, which is again this uncertainty.
Speaker Change: Maybe how that is impacting your business I don't know if you could talk any more about.
Speaker Change: Indirect versus direct tariff impact and maybe China exposure specifically.
We had.
Speaker Change: Different tarvin impacts one is of course that there is a flat increase by 10% for product going into the U S.
Speaker Change: And then of course.
Speaker Change: Made in China.
Speaker Change: Has very high and they were not reverse that still in place on Monday, I and my understanding is that.
Speaker Change: There was a decision to reduce some for the moment, which is again this uncertainty is not clear.
Michael Kliger: It's not clear if this is now permanent or not. We don't have a huge chunk of made in China dresses and contemporary brands. We do have brands that have manufacturing in China. Most of our products are not only sourced in Europe, but also manufactured in Europe. And therefore, there is an impact on the US channel. And there is an impact for product made in China. But that impact is at this stage controllable. Obviously, at duty rates, which we had at 140% You cannot. passed that along that effectively means you cannot sell them.
Speaker Change: Now for a moment one offs.
Speaker Change: Bob.
Speaker Change: We don't have a huge chunk of made in China and dresses and contemporary brands. We do have brands that have been in fracturing in China.
Speaker Change: Most of our products are not only sourced in Europe are also manufactured in Europe.
Speaker Change: Therefore, there is an impact on the U S channel.
Speaker Change: There is an impactful product made in China, but.
Speaker Change: That impact is.
Speaker Change: At this stage controllable obviously.
Speaker Change: Judy rates, which we had 140%.
Speaker Change: You cannot.
Speaker Change: Pass that along that effectively means you cannot sell a product.
Blake: Really appreciate the color. Best of luck.
Speaker Change: Really appreciate the color best of luck.
Operator: And it seems that we have no further questions for today. That concludes the Q&A session in today's conference call. We thank you for your participation. You may now disconnect your lines. Have a pleasant day, everyone.
Speaker Change: And it seems that we have no further questions for today that concludes the Q&A session and today's conference call. We thank you for your participation. You may now disconnect your lines have a pleasant day everyone.
Speaker Change: [music].
Speaker Change: Yeah.
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Yes.
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Yeah.
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Speaker Change: Sure.