Q4 2025 LuxExperience BV Earnings Call

Speaker #1: Greetings and welcome to the Luxe Experience fourth quarter and full fiscal year 2025 earnings conference call. At this time, all participants are in a listen-only mode.

Operator: Greetings and welcome to the LuxExperience Q4 and full 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. It is now my pleasure to introduce your host, Martin Beer, the Chief Financial Officer of LuxExperience. Thank you, sir. Please begin.

Speaker #1: Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. It is now my pleasure to introduce your host, Martin Beer, the Chief Financial Officer of Luxe Experience.

Speaker #1: Thank you, sir. Please begin.

Speaker #2: Thank you, operator, and welcome everyone to the Luxe Experience Investor Conference call for the fourth quarter and full fiscal year 2025. With me today is our CEO, Michael Kliger.

Martin Beer: Thank you, operator, and welcome everyone to the LuxExperience Investor Conference Call for the Q4 and full fiscal year 2025. 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 under no duty to update forward-looking statements. 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.luxexperience.com. I will now turn the call over to Michael.

Speaker #2: 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.

Speaker #2: Many factors could cause actual results to differ materially. We are under no duty to update forward-looking statements. In addition, we will refer to certain financial measures not reported in accordance with IFRS on this call.

Speaker #2: 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.luxexperience.com. I will now turn the call over to Michael.

Speaker #3: 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 the fourth quarter and the full fiscal year 2025 of Luxe Experience.

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 the fourth quarter and the full fiscal year 2025 of LuxExperience. As you know, we successfully closed the acquisition of Jürgensen & Thorpe on April 23rd. Under the new name, LuxExperience, we now operate the leading global digital multi-brand luxury group. LuxExperience operates a portfolio of some of the most distinguished store brands in digital luxury and creates communities for luxury enthusiasts worldwide with unique digital and physical experiences. Mytheresa, NET-A-PORTER, and MR PORTER offer highly curated edits of the most prestigious luxury brands featuring womenswear, menswear, kidswear, fine jewelry & watches, as well as lifestyle products. YOOX and THE OUTNET are the leading destinations for multi-brand off-season online luxury shopping.

Speaker #3: As you know, we successfully closed the acquisition of Europe's NetherPort on April 23rd. Under the new name, Luxe Experience, we now operate the leading global digital multi-brand luxury group.

Speaker #3: Luxe Experience operates a portfolio of some of the most distinguished store brands in digital luxury and creates communities for luxury consumerists worldwide with unique digital and physical experiences.

Speaker #3: MyTheresa, Net-a-Porter, and Mr. Porter offer highly curated edits of the most prestigious luxury brands featuring women's wear, men's wear, kids' wear, fine jewelry and watches, as well as lifestyle products.

Speaker #3: Europe's and the outlet are the leading destinations for multi-brand off-season online luxury shopping. With the acquisition now complete, we will report going forward on the basis of a new segment reporting structure.

Michael Kliger: With the acquisition now complete, we will report going forward on the basis of a new segment reporting structure. The three segments are luxury Mytheresa, luxury NET-A-PORTER and MR PORTER, as well as off price, which is comprised of YOOX and THE OUTNET. As the transaction closed on April 23rd, the performance of the two new segments was mostly driven by the previous management. In order to provide a more comprehensive view of the underlying performance of the segments, we will comment for all businesses on the full 12-month period ending June 30th, 2025, even though our financial reporting for the LuxExperience Group reflects the contribution from the acquired businesses only for the period between closing and fiscal year end.

Speaker #3: The three segments are luxury MyTheresa, luxury Net-a-Porter, and Mr. Porter, as well as off-price, which is comprised of Europe's and the outlet. As the transaction closed on April 23rd, the performance of the two new segments will mostly be driven by the previous management.

Speaker #3: But in order to provide a more comprehensive view of the underlying performance of the segments, we will comment for all businesses on the full 12-month period ending June 30, 2025, even though our financial reporting for the Luxe Experience Group reflects the contribution from the acquired businesses only for the period between closing and fiscal year end.

Speaker #3: Let me start by commenting on the overall progress of establishing a new operating model for the now-formed Luxe Experience Group, which is built on strong store brand differentiation while enabling significant cost efficiencies in the joint infrastructure for the luxury businesses and the separated infrastructure for the off-price businesses.

Michael Kliger: Let me start by commenting on the overall progress of establishing a new operating model for the now formed LuxExperience Group, which is built on strong store brand differentiation while enabling significant cost efficiencies in the joint infrastructure for the luxury businesses and the separated infrastructure for the off-price business. We managed to have a very fast start and have already made significant changes to the YOOX NET-A-PORTER structure, processes, and infrastructure since the completion of the acquisition in April. We have initiated cost reduction actions across all operations functions. This relates to changes at the global warehouse footprint and fulfillment models, the customer service provider landscape, and a global renegotiation of carrier contracts, all yielding significant savings going forward for the group.

Speaker #3: We managed to have a very fast start and have already made significant changes to the YNAB structure, processes, and infrastructure since the completion of the acquisition in April.

Speaker #3: We have initiated cost reduction actions across all operations functions. This relates to changes at the global warehouse footprint and fulfillment models. The customer service provider landscape and a global renegotiation of carrier contracts are all yielding significant savings going forward for the group.

Speaker #3: The technology migration for luxury, as well as the simplification of a separate off-prize tech stack, has also started. We have fully validated our expectations for the time and effort needed that we had before the acquisition.

Michael Kliger: The technology migration for luxury, as well as the simplification of a separate off-price tech stack, has also started, and we have fully validated our expectations for the time and effort needed that we had before the acquisition. We have also already enabled customer data analytics across the group by creating a joint data analytics layer on top of the different data platforms. We have come already a long way in the transformation of the group's finance and HR functions, supporting the new operating model and driving significant G&A savings going forward. Finally, we have announced partial workforce reductions across LuxExperience that are subject to the completion of applicable information and consultation processes. All these actions aim to regain financial strength after years of decline for LuxExperience.

Speaker #3: We have also already enabled customer data analytics across the group by creating a joint data analytics layer on top of the different data platforms.

Speaker #3: We have come a long way in the transformation of the group, finance, and HR functions, supporting the new operating model and driving significant G&A savings going forward.

Speaker #3: Finally, we have announced partial workforce reductions across YNAB, which are subject to the completion of applicable information and consultation processes. All these actions aim to regain financial strength after years of decline for YNAB.

Speaker #3: We are very pleased with the fast start of the transformation to leverage the scale and scope for strong growth and profitability for the whole group.

Michael Kliger: We are very pleased with the fast start of the transformation to leverage the scale and scope for strong growth and profitability for the whole group. Medium term, we expect therefore to reach €4 billion in net sales and an adjusted EBITDA margin of 7 to 9% for the group. LuxExperience is in a remarkable position to become the one and only destination for luxury enthusiasts worldwide. Let me now comment on the Mytheresa business, the main driver of our financial performance in fiscal year 2025. We are extremely pleased with the results of our Mytheresa business, confirming again our unique ability to deliver profitable growth despite ongoing macro headwinds. We clearly demonstrated the strengths of our business model, which focuses on wardrobe-building big spending luxury customers.

Speaker #3: Medium term, we expect therefore to reach Euro 4 billion in net sales and an adjusted EBPA margin of 7 to 9 percent for the group.

Speaker #3: Luxe Experience is in a remarkable position to become the one and only destination for luxury enthusiasts worldwide. Let me now comment on the MyTheresa business.

Speaker #3: The main driver of our financial performance in fiscal year 2025. We are extremely pleased with the results of our MyTheresa business, confirming again our unique ability to deliver profitable growth despite ongoing macro headwinds.

Speaker #3: We clearly demonstrated the strength of our business model, which focuses on wardrobe building big spending luxury customers. In Q4 of fiscal year 25, we grew our net sales by plus 11.5 percent compared to Q4 fiscal year 24, and for the full fiscal year 25 by plus 8.9 percent compared to full fiscal year 24.

Michael Kliger: In Q4 of fiscal year 2025, we grew our net sales by +11.5% compared to Q4 fiscal year 2024, and for the full fiscal year 2025, by +8.9% compared to full fiscal year 2024. This was an acceleration over the results of the third quarter, and we closed the year fully in line with our given guidance. In the U.S., the Mytheresa business generated a net sales growth of +6.4% in Q4 fiscal year 2025 compared to Q4 fiscal year 2024. For the full fiscal year, the U.S. accounted for 20.6% of net sales of our total business. In Europe, excluding Germany, we experienced an excellent net sales growth with +19.4% in Q4 fiscal year 2025 compared to the prior year period. This growth of Mytheresa was again driven by our resilient and loyal top customers.

Speaker #3: This was an acceleration of the results of the third quarter and we closed the year fully in line with our given guidance. The United States, the MyTheresa business generated a net sales growth of plus 6.4 percent in Q4 fiscal year 25, compared to Q4 fiscal year 24.

Speaker #3: For the full fiscal year, the US accounted for 20.6 percent of net sales of our total business. In Europe, excluding Germany, we experienced an excellent net sales growth with plus 19.4 percent in Q4 fiscal year 25, compared to the prior year period.

Speaker #3: This growth of MyTheresa was again driven by our resilient and loyal top customers. The top customer base of MyTheresa grew by 3.6% in the fourth quarter compared to the prior year period.

Michael Kliger: The top customer base of Mytheresa grew by +3.6% in the fourth quarter compared to the prior year period. More importantly, the average spend per top customer in terms of GMV grew by +16.1% in Q4 fiscal year 2025 versus Q4 fiscal year 2024, and +15.9% for the full fiscal year 2025. As a consequence of our successful strategy at Mytheresa, our top customers accounted for 3.8% of all customers in numbers, but for 42.6% in terms of total GMV in fiscal year 2025. The average order value last 12 months for Mytheresa increased by a remarkable +10% to an outstanding €773 in Q4 fiscal year 2025, demonstrating the success of our focus on selling full-price, high-end luxury products to top customers, including our successful expansion of our fine jewelry & watches offering.

Speaker #3: More importantly, the average spend per top customer in terms of GMV grew by plus 16.1 percent in Q4 fiscal year 25 versus Q4 fiscal year 24, 4, and plus 15.9 percent for the full fiscal year 25.

Speaker #3: As a consequence of our successful strategy at MyTheresa, our top customers accounted for 3.8 percent of all customers in numbers, but for 42.6 percent in terms of total GMV in fiscal year 2025.

Speaker #3: The average order value over the last 12 months for MyTheresa increased by a remarkable 10% to an outstanding €773 in Q4 fiscal year 2025.

Speaker #3: Demonstrating the success of our focus on selling full-price, high-end luxury products to top customers, including our successful expansion of our fine jewelry offer.

Speaker #3: This high average order value also provides further economic leverage that we also use for example to invest further in our unboxing experience with added gifting for kidswear orders and branded hangers as well as garment bags for high-value ready-to-wear items.

Michael Kliger: This high average order value also provides further economic leverage that we also use, for example, to invest further in our unboxing experience with added gifting for kidswear orders and branded hangers, as well as garment bags for high-value ready-to-wear items. The continued focus at Mytheresa on selling full price is also evident with the again improved gross profit margin growing by 90 basis points in Q4 fiscal year 2025. For the full fiscal year 2025, the gross profit margin grew by 130 basis points. Our excellent customer service proposition is highlighted by our internally measured net promoter score of 82.6% in Q4 fiscal year 2025, showing our consistently outstanding customer satisfaction. Our success with big spending wardrobe-building customers makes Mytheresa a highly desired partner for luxury brands.

Speaker #3: The continued focus at MyTheresa on selling full price is also evident, with the again improved gross profit margin growing by 90 basis points in Q4 fiscal year 2025.

Speaker #3: For the full fiscal year 2025, the gross profit margin grew by 130 basis points. Our excellent customer service proposition is highlighted by our internally measured net promoter score of 82.6% in Q4 fiscal year 2025, showing our consistently outstanding customer satisfaction.

Speaker #3: Our success with big spending wardrobe-building customers makes MyTheresa a highly desired partner for luxury brands. In the fourth quarter of fiscal year '25, we saw again many high-impact campaigns and exclusive product launches.

Michael Kliger: In the fourth quarter of fiscal year 2025, we saw again many high-impact campaigns and exclusive product launches, underlying also Mytheresa's strong relationships with luxury brands. We launched the exclusive Dolce & Gabbana Taormina capsule collection for womenswear and kidswear, only available at Mytheresa. We launched also high summer exclusive capsules with Pucci, Versace, Chloe, La Douce Bleue, and Missoni for womenswear, all only available at Mytheresa. We were the exclusive pre-launch partner for the Alaia Archetype collection, Valentino's ET FU capsule collection, as well as the Rose Fall/Winter 2025 collection for womenswear and menswear. We also launched exclusive womenswear bags and shoe styles from Bottega Veneta's Pre-Fall 2025 collection and exclusive womenswear and menswear styles from Prada's new Season collection.

Speaker #3: Underlying this is MyTheresa's strong relationships with luxury brands. We launched the exclusive Dolce & Gabbana Taormina capsule collection for women's wear and kids' wear, only available at MyTheresa.

Speaker #3: We launched also high summer exclusive capsules with Pucci, Versace, Chloe, La Double G, and Missoni. For women'swear, all only available at MyTheresa. We were the exclusive pre-launch partner for the Alaia archetype collection, Valentino's Été Fou capsule collection, as well as the Rose Fall Winter 25 collection for women'swear and menswear.

Speaker #3: We also launched exclusive women'swear bags and shoe styles from Bottega Veneta's pre-fall 25 collection, and exclusive women'swear and menswear styles from Prada's new season collection.

Speaker #3: In addition to creating desirability for our top customers with exclusive digital campaigns and product launches, we also create desirability and a sense of community for MyTheresa's top customers through unique, money-can-buy physical experiences.

Michael Kliger: In addition to creating desirability for our top customers with exclusive digital campaigns and product launches, we also create desirability and a sense of community for Mytheresa's top customers through unique money-can't-buy physical experiences. We aspire to constantly engage with our top customers across the globe to build strong, long-lasting relationships. In the fourth quarter, we hosted various top customer events, including an intimate afternoon tea with Patou at the private apartment of the Creative Director Guillaume Henry. We celebrated a Duvaux pop-up at the Mytheresa store in Munich. We invited top customers to a dinner and shopping experience with Prada at the Round Tree Hotel in Amagersfeld. Further highlights in the United States included a private behind-the-scenes viewing of the Boston Ballet's rehearsal of Romeo and Juliet and a private tour at the Frieze Art Exhibition at Hudson Yards, hosted in collaboration with Stone Island.

Speaker #3: We aspire to constantly engage with our top customers across the globe to build strong, long-lasting relationships. In the fourth quarter, we hosted various top customer events, including an intimate afternoon tea with Patoo at the private apartment of the creative director, Guillaume Henry.

Speaker #3: We celebrated a divorce pop-up at the MyTheresa store in Munich. We invited top customers to a dinner and shopping experience with Prada at the Rowntree Hotel in Armagansort.

Speaker #3: Further highlights in the United States included a private behind-the-scenes viewing of the Boston Ballet's rehearsal of "Romeo and Juliet," and a private tour at the Frieze Art Exhibition in Hudson Yards, hosted in collaboration with Stone Island.

Speaker #3: In Shanghai, we created an unforgettable experience around Sara Burton's debut runway collection together with Givenchy. In the spirit of being a community for luxury enthusiasts, we hosted a two-day Taormina experience in Sicily with Dolce & Gabbana in attendance of Alfonso Dolce.

Michael Kliger: In Shanghai, we created an unforgettable experience around Sarah Berki's Bibi Runway collection together with Givenchy. In the spirit of being a community for luxury enthusiasts, we hosted a two-day Taormina experience in Sicily with Dolce & Gabbana in attendance of Alfonso Dolce. We invited guests to a dinner at the famous San Domenico Palace and a Sicilian market experience at Taormina Central Market. Another highlight was our two-day Rome experience with Acquazura, including a private dinner at the Cinecittà Film Studio attended by Edgardo Osorio, founder and Creative Director of Acquazura. We also hosted a Mediterranean escape in Ibiza with Missoni, including a boat tour and pool party. Finally, we invited clients to Naples to attend a private fashion show with Quitton and learn about the sartorial craftsmanship of the brand. In summary, we are extremely pleased with the results of the Mytheresa business.

Speaker #3: We invited guests to a dinner at the famous San Domenico Palace, and a Sicilian market experience at Taormina Central Marketplace. Another highlight was our two-day Rome experience with Aquazzura, including a private dinner at the Cinecittà Film Studio attended by Edgardo Ossorio, founder and creative director of Aquazzura.

Speaker #3: We also hosted a Mediterranean escape in Ibiza with Missorio including a boat tour and pool party. Finally, we invited clients to Naples to attend a private fashion show with Chiton and learn about the Sartorial Craftsmanship of the Brand.

Speaker #3: In summary, we are extremely pleased with the results of the MyTheresa business. We have demonstrated clear operational and financial leadership in an otherwise struggling sector, and we have also underlined that we have the expertise at Luxe Experience to achieve profitable growth in digital luxury.

Michael Kliger: We have demonstrated clear operational and financial leadership in an otherwise struggling sector, and we have also underlined that we have the expertise at LuxExperience to achieve profitable growth in digital luxury. Let me now comment on the luxury segment comprised of NET-A-PORTER and MR PORTER. As stated in our investor presentation in May, both NET-A-PORTER as well as MR MR PORTER are truly iconic digital luxury brands that have distinct high-end customers quite different from the Mytheresa customer base. Our key strategic priority will be to strengthen the unique identities of the brand and maintain the differentiation for Mytheresa. A renewed clear focus on luxury customers looking for editorial inspiration and brand discovery, as well as a focus on full-price selling, will be fundamental for the turnaround at NET-A-PORTER and MR PORTER. Of course, reduced cost of operation will also be needed.

Speaker #3: Let me now comment on the luxury segment comprised of NetherPorter and Mr. Porter. As stated in our investor presentation in May, both NetherPorter as well as Mr. Porter are truly iconic digital luxury brands that have distinct high-end customers quite different from the MyTheresa customer base.

Speaker #3: Our key strategic priority will be to strengthen the unique identities of the brands and maintain differentiation for MyTheresa. A renewed, clear focus on luxury customers looking for editorial inspiration and brand discovery, as well as a focus on full-price selling, will be fundamental for the turnaround at Net-a-Porter and Mr. Porter.

Speaker #3: Of course, reduced cost of operation will also be needed. In Q4 fiscal year 2025, net sales declined by 8.9 percent versus Q4 fiscal year 2024 and by 10.9 percent for the full fiscal year 2025 compared to the full fiscal year 2024 for NetherPorter and Mr. Porter combined.

Michael Kliger: In Q4 fiscal year 2025, net sales declined by -8.9% versus Q4 fiscal year 2024 and by -10.9% for the full fiscal year 2025 compared to full fiscal year 2024 for NET-A-PORTER and MR PORTER combined. The United States with -8% and Europe, excluding the UK and Germany with -6.5%, saw similar decreases in terms of GMV in Q4 fiscal year 2025 compared to Q4 fiscal year 2024. While the overall top line declined, the average order value last 12 months increased by +14.5% to €811 for NET-A-PORTER and MR PORTER combined in Q4 fiscal year 2025. The gross profit margin remained almost stable in Q4 fiscal year 2025 for NET-A-PORTER and MR PORTER combined compared to the prior year period. Going forward, the clear strategy will be on a renewed focus on high-end big spending customers and on full-price selling, both fully in line with our group strategy.

Speaker #3: The United States, with a decrease of 8 percent, and Europe, excluding the UK and Germany, with a decrease of 6.5 percent, saw similar declines in terms of GMV in Q4 fiscal year 2025 compared to Q4 fiscal year 2024.

Speaker #3: While the overall top line declined, the average order value over the last 12 months increased by 14.5% to €811 for NetherPorter and Mr. Porter combined in Q4 of fiscal year 2025.

Speaker #3: The gross profit margin remained almost stable in Q4 fiscal year 25 for NetherPorter and Mr. Porter combined compared to the prior year period. Going forward, the clear strategy will be on a renewed focus on high-end big spending customers and on full price selling, both fully in line with our group strategy.

Speaker #3: The immediate priority after closing the acquisition has been to appoint highly experienced and strongly driven leadership teams at NetherPorter and Mr. Porter after years of decline.

Michael Kliger: The immediate priority after closing the acquisition has been to appoint highly experienced and strongly driven leadership teams at NET-A-PORTER and MR PORTER after years of decline. Both store brands now have outstanding dedicated leadership teams in place. This needed change was done in record speed under the leadership of NET-A-PORTER's new CEO, Heather Kaminetzky, who significantly drove Mytheresa's U.S. growth since 2021. New Chief Buying and Merchandising Officer, Brigitte Chatron, and new Chief Brand and Customer Officer, Claudia Plant, are engineering the successful return of NET-A-PORTER's global appeal and customer passion based on editorial authority and luxury fashion discovery. No less pivotal is the return of co-founder Toby Bateman as CEO to MR PORTER.

Speaker #3: Both store brands now have outstanding dedicated leadership teams in place. This needed change was done in record speed. Under the leadership of NetherPorter's new CEO, Heather Kaminetsky, who significantly drove MyTheresa's US growth since 2021, new chief buying and merchandising officer Brigitte Chartrand and new chief brand and customer officer Claudia Plant are engineering the successful return of NetherPorter's global appeal and customer passion based on editorial authority and luxury fashion discovery.

Speaker #3: No less pivotal is the return of co-founder Toby Bateman as CEO to Mr. Porter. Under his leadership, Jeremy Langmead as new brand director, Daniel Todd as buying director, and Cassandra Vaxland as new customer director are charting the course of Mr. Porter to regain its unique leadership position as the only global menswear digital luxury destination.

Michael Kliger: Under his leadership, Jeremy Langmead as new Brand Director, Daniel Todd as Buying Director, and Cassandra Baxlund as new Customer Director are charting the course of MR PORTER to regain its unique leadership position as the only global menswear digital luxury destination. While we expect net sales to continue to decline in the short term for NET-A-PORTER and MR PORTER based on a lack of marketing spend in the past, as well as too little investment into the buying of attractive new merchandise, the new leadership team in place and a radical transformation program will soon bear fruit and create a much healthier and resilient business model. Lastly, let me comment on the off-price segment comprised of YOOX and THE OUTNET. Both store brands have suffered the most from a lack of dedicated resources, marketing spend, as well as low investment in attractive merchandise.

Speaker #3: While we expect net sales to continue to decline in the short term for NetherPorter and Mr. Porter based on a lack of marketing spend in the past as well as too little investment into the buying of attractive new merchandise, the new leadership team in place and a radical transformation program will soon bear fruit and create a much healthier and resilient business model.

Speaker #3: Lastly, let me comment on the off-prize segment comprised of Europe's and the outlet. Both store brands have suffered the most from a lack of dedicated resources marketing spend as well as low investments in attractive new merchandise.

Speaker #3: Furthermore, the off-prize businesses shared infrastructure and resources with the luxury businesses, which did not really fulfill the needs of a lower margin off-prize business model.

Michael Kliger: Furthermore, the off-price businesses shared infrastructure and resources with the luxury businesses, which did not really fulfill the needs of a lower margin off-price business model. As stated in May, only by separating off-price from luxury and by decisively streamlining the businesses will the vicious cycle of declining revenues and decreasing investments be stopped. In Q4 fiscal year 2025, net sales declined by -17.4% for YOOX and THE OUTNET combined. For the full fiscal year 2025, the decline was -13.2% compared to full fiscal year 2024. The United States with -21.8% and Europe, excluding the UK and Germany, with -15.6% saw similar negative development in terms of GMV for YOOX and THE OUTNET for Q4 fiscal year 2025 compared to Q4 fiscal year 2024. As for the other businesses, the average order value last 12 months for YOOX and THE OUTNET combined increased by +17.4% to €292.

Speaker #3: As stated in May, only by separating off-prize from luxury and by decisively streamlining the businesses will the vicious cycle of declining revenues and decreasing investments be stopped.

Speaker #3: In Q4 fiscal year 2025, net sales declined by 17.4% for Europe and the outlet combined. For the full fiscal year 2025, the decline was 13.2% compared to the full fiscal year 2024.

Speaker #3: The United States, with a decline of 21.8%, and Europe excluding the UK and Germany, with a decline of 15.6%, saw similar negative developments in terms of GMV for Europe’s outlet in Q4 fiscal year 2025 compared to Q4 fiscal year 2024.

Speaker #3: As for the other businesses, the average order value last 12 months for Europe's and the outlet combined increased by plus 17.4 percent to 292 euros.

Speaker #3: The gross profit margin decreased in Q4 by 490 basis points compared to the prior year period. This was mostly driven by the shutdown of Europe's marketplace business, as well as clearance activities during this quarter.

Michael Kliger: The gross profit margin decreased in Q4 by 490 basis points compared to the prior year period. This was mostly driven by the shutdown of the YOOX marketplace business, as well as clearance activities during this quarter. Fully in line with our strategy, we have already taken very clear actions since the closing of the acquisition of Jürgensen & Thorpe. Separate leadership teams have been put in place and confirmed for YOOX and THE OUTNET. Dedicated brand and marketing functions, separate from luxury, have been built up. Infrastructure, resources, and processes in finance, HR, operations, and most importantly, in technology are being separated from the luxury segment and streamlined to create the lean operating model required for the off-price business. Select operational and administrative structures are being consolidated, and workforce reductions have been announced.

Speaker #3: Fully in line with our strategy, we have already taken very clear actions since the closing of the acquisition of YNAB. Separate leadership teams have been put in place and confirmed for Europe's and the outlet.

Speaker #3: Dedicated brand and marketing functions separate from luxury have been built up. Infrastructure resources and processes in finance, HR, operations, and most importantly in technology are being separated from the luxury segment and streamlined.

Speaker #3: To create the lean operating model required for the off-prize business. Select operational administrative structures are being consolidated and workforce reductions have been announced. A group remains fully committed to Italy for Europe's and the United Kingdom for the outlet as their respective headquarters.

Michael Kliger: The group remains fully committed to Italy for YOOX and the United Kingdom for THE OUTNET as their respective headquarters. All these measures will help us to regain growth and financial strength after years of decline for the off-price businesses. I hand over to Martin to discuss the financial results in detail.

Speaker #3: All these measures will help us to regain growth and financial strength after years of decline for the off-prize businesses. And now, I hand over to Martin to discuss the financial results in detail.

Speaker #4: Thank you, Michael. As explained by Michael, we report across three segments, luxury MyTheresa, our legacy business, luxury NAP and Mr. P, which is comprised of NetherPorter and Mr. Porter, and off-prize which consists of Europe's and the outlet.

Martin Beer: Thank you, Michael. As explained by Michael, we will report across three segments: luxury Mytheresa, our legacy business; luxury NAP and MR PORTER, which is comprised of NET-A-PORTER and MR PORTER; and off-price, which consists of YOOX and THE OUTNET. As the transaction closed on April 23, 2025, and our fiscal year ended June 30, our financial reporting for our LuxExperience Group reflects the contribution from the acquired businesses only for the period between closing and fiscal year end. We will refer to these as reported figures. To provide a more comprehensive view of the underlying performance of the segments and the combined business group, we will also report on certain key metrics of the new segments and the LuxExperience Group on an illustrative basis, reflecting the full last quarter and full 12-month period ending June 30, 2025.

Speaker #4: As the transaction closed on April 23rd, 2025, and our fiscal year ended June 30th, our financial reporting for our Luxe Experience Group reflects the contribution from the acquired businesses only for the period between closing and fiscal year end.

Speaker #4: We will refer to these as reported figures. To provide a more comprehensive view of the underlying performance of the segments and the combined business group, we will also report on certain key metrics of the new segments and the Luxe Experience Group on an illustrative basis.

Speaker #4: Reflecting the full last quarter and the full 12-month period ending June 30, 2025, I will now review the financial results for the fourth quarter and full fiscal year ended June 30, 2025, on a segment basis.

Martin Beer: I will now review the financial results for the fourth quarter and full fiscal year ended June 30, 2025, on a segment basis and highlight specific developments that influenced each segment's performance. Following that, I will review the consolidated financial results for LuxExperience at group level and will then provide an outlook for fiscal year 2026 and the medium term. Unless otherwise stated, all numbers refer to euro. Let's begin with the performance of our Mytheresa business. During the fourth quarter, covering April to June, Mytheresa's net sales increased by +11.5% to €248.9 million. For the full fiscal year, net sales grew by 8.9% to €916.1 million, in line with our guidance. GMV grew by +11.1% in the quarter to €265.9 million and to €988.5 million in the full fiscal year, a growth of +8.2%.

Speaker #4: And highlight specific developments that influenced each segment's performance. Following that, I will review the consolidated financial results for Luxe Experience at the group level and will then provide an outlook for fiscal year '26 and the medium term.

Speaker #4: Unless otherwise stated, all numbers refer to euro. Let's begin with the performance of our MyTheresa business. During the fourth quarter, covering April to June, MyTheresa's net sales increased by plus 11.5 percent to 248.9 million.

Speaker #4: For the full fiscal year, net sales grew by 8.9% to $916.1 million, in line with our guidance. GMV grew by 11.1% in the quarter to $265.9 million, and to $988.5 million in the full fiscal year.

Speaker #4: The growth of plus 8.2 percent. MyTheresa's gross profit margin increased by 90 basis points from 47.4 percent in the prior year quarter to now 48.3 percent, with our continued focus on full price sale.

Martin Beer: Mytheresa's gross profit margin increased by 90 basis points from 47.4% in the prior year quarter to now 48.3%, with our continued focus on full-price sale. This marks the fourth consecutive quarter of margin expansion. For the full fiscal year 2025, the gross profit margin increased by 130 basis points to 47% from 45.7% in the prior year period. I will now briefly review the cost line developments. The shipping and payment cost ratio improved by 180 basis points in the fourth quarter from 14.7% to now 12.9%. The reduction is a result of our continuous focus on improving unit economics, mostly driven by an increase in AUV and lower return rates. In the full fiscal year 2025, the shipping and payment cost ratio decreased by 110 basis points to 13.6%.

Speaker #4: This marks the fourth consecutive quarter of margin expansion. For the full fiscal year 25, the gross profit margin increased by 130 basis points to 47 percent from 45.7 percent in the prior year period.

Speaker #4: I will now briefly review the cost line developments. The shipping and payment cost ratio improved by 180 basis points in the fourth quarter, from 14.7% to now 12.9%.

Speaker #4: The reduction is a result of our continuous focus on improving unit economics. Mostly driven by an increase in AOV, and lower return rates. In the full fiscal year 25, the shipping and payment cost ratio decreased by 110 basis points to 13.6 percent.

Speaker #4: While the marketing cost ratio saw a slight increase both in the quarter and over the full fiscal year, the selling, general, and administrative (SG&A) cost ratio decreased.

Martin Beer: While the marketing cost ratio saw a slight increase both in the quarter and over the full fiscal year, the selling, general, and administrative (SG&A) cost ratio decreased. In Q4 of fiscal year 2025, the SG&A cost ratio stood at 13.4% as a percentage of GMV, decreasing by 70 basis points from the prior year quarter. For the full fiscal year, the SG&A cost ratio decreased by 40 basis points to 13.6%. In Q4 of fiscal year 2025, the adjusted EBITDA margin expanded by 180 basis points from 4.7% to now 6.5%. For the full fiscal year 2025, the adjusted EBITDA margin increased by 180 basis points to 4.9%, with an adjusted EBITDA of €44.6 million, in line with our given guidance. Key drivers were our increasing gross profit margin and better unit economics through diligent cost management in all our cost lines.

Speaker #4: In Q4, our fiscal year 25, the SG&A cost ratio stood at 13.4 percent as a percentage of GMV, decreasing by 70 basis points from the prior year quarter.

Speaker #4: For the full fiscal year, the SG&A cost ratio decreased by 40 basis points to 13.6 percent. In Q4 of fiscal year 2025, the adjusted EBITDA margin expanded by 180 basis points, from 4.7 percent to now 6.5 percent.

Speaker #4: For the full fiscal year 2025, the adjusted EBITDA margin increased by 180 basis points to 4.9 percent, with an adjusted EBITDA of $44.6 million.

Speaker #4: In line with our given guidance, key drivers were our increasing gross profit margin and better unit economics through diligent cost management in all our cost lines.

Speaker #4: To be able to continuously improve our profitability, even in challenging times for the overall industry, shows the resilience of our business model and the value of our positioning.

Martin Beer: To be able to continuously improve our profitability, even in challenging times for the overall industry, shows the resilience of our business model and the value of our positioning. Our inventory levels at Mytheresa stayed flat compared to the previous fiscal year end, despite double-digit top line growth. During Q4 of fiscal year 2025, Mytheresa had a positive operating cash flow of plus €17.6 million. For the full fiscal year, Mytheresa also had a positive operating cash flow of plus €3.6 million. In sum, Mytheresa outperformed its peers with double-digit top line growth and improving its profitability. In Q4 and for the full fiscal year 2025, we proved again that we are the best operator in digital luxury and are ideally positioned to fortify the leadership position of LuxExperience along its three segments. Let me now comment on the luxury NET-A-PORTER and MR PORTER segment in more detail.

Speaker #4: Our inventory levels at MyTheresa stayed flat compared to the previous fiscal year-end, despite double-digit top-line growth. During Q4 of fiscal year 2025, MyTheresa had a positive operating cash flow of $17.6 million.

Speaker #4: For the full fiscal year, MyTheresa also had a positive operating cash flow of $3.6 million. In sum, MyTheresa outperformed its peers with double-digit top-line growth and improved profitability.

Speaker #4: In Q4, and for the full fiscal year 2025, we proved again that we are the best operator in digital luxury, and we are ideally positioned to fortify the leadership position of Luxe Experience along its three segments.

Speaker #4: Let me now comment on the luxury NetherPorter and Mr. Porter segment in more detail. In the fourth quarter of fiscal year, net sales decreased by 8.9 percent and 10.9 percent LTM, on an illustrative basis.

Martin Beer: In the fourth quarter of fiscal year, net sales decreased by minus 8.9% and minus 10.9% LTM on an illustrative basis. As Michael Kliger outlined, this development is driven by a lack of targeted marketing and merchandise strategy and is being readjusted by the new leadership in place. This was anticipated and is reflected in our overall budget plan. The average order value on an LTM basis increased by plus 14.5% from €708 to €811. The adjusted gross profit margin in Q4 was mostly stable at around 51%, both in line with a strategic refocus on improving customer quality. Adjusted EBITDA profitability at NET-A-PORTER and MR PORTER is below Mytheresa level at minus 1.1% adjusted EBITDA margin in the quarter compared to plus 6.5% at Mytheresa. On an LTM basis, the NET-A-PORTER and MR PORTER Adjusted EBITDA margin was at minus 0.7% compared to the plus 4.9% at Mytheresa.

Speaker #4: As Michael outlined, this development is driven by a lack of targeted marketing and merchandise strategy, and is being readjusted by the new leadership in place.

Speaker #4: This was anticipated and is reflected in our overall budget plan. The average order value on an LTM basis increased by 14.5 percent, from €708 to €800.

Speaker #4: The adjusted gross profit margin in Q4 was mostly stable at around 51 percent, both in line with the strategic refocus on improving customer quality.

Speaker #4: Adjusted EBITDA profitability at Mr. P is below MyTheresa level at minus 1.1 percent adjusted EBITDA margin in the quarter, compared to plus 6.5 percent at MyTheresa.

Speaker #4: On an LTM basis, the NAP Mr. P adjusted EBITDA margin was at minus 0.7 percent, compared to the plus 4.9 percent at MyTheresa. As outlined in our May investor presentation, the key focus area for NAP and Mr. P rests in the SG&A cost ratio.

Martin Beer: As outlined in our May investor presentation, the key focus area for NET-A-PORTER and MR PORTER rests in the SG&A cost ratio. In Q4, the SG&A cost ratio at NET-A-PORTER and MR PORTER was at 24.6%, with now also integrating IT development costs into operating expenses instead of CapEx, the same way we have treated IT development costs at Mytheresa. In fiscal year 2024, NET-A-PORTER and MR PORTER had tech people CapEx of $26 million. With closing of the acquisition, we changed towards this integration into SG&A expenses starting in this fiscal year Q4. From now on, this enables full transparency in the true SG&A cost development. The 24.6% SG&A cost ratio at NET-A-PORTER and MR PORTER in the quarter compares to the 13.4% SG&A cost ratio at Mytheresa.

Speaker #4: In Q4, the SG&A cost ratio at NAP Mr. P was at 24.6 percent, with now also integrating IT development costs into operating expenses instead of CapEx.

Speaker #4: The same way we have treated IT development costs at MyTheresa. In fiscal year 2024, NAP Mr. P had tech people CapEx of $26 million.

Speaker #4: With the closing of the acquisition, we changed towards this integration into SG&A expenses, starting in this fiscal year Q4. From now on, this enables full transparency in the true SG&A cost development.

Speaker #4: The 24.6 percent SG&A cost ratio at NAP Mr. P in the quarter compares to the 13.4 percent SG&A cost ratio at MyTheresa. This is over a 1000 basis points difference and is therefore the focus area of our transformation plan, with IT replatforming operational efficiencies simplifying the business model, and cutting overhead costs.

Martin Beer: This is over a 1,000 basis points difference and is therefore the focus area of our transformation plan, with IT re-platforming, operational efficiencies, simplifying the business model, and cutting overhead costs. Other cost lines of the NET-A-PORTER and MR PORTER Q4 and LTM performance are in line with our expectations and the transformation plan. We also provided illustrative previous year numbers of NET-A-PORTER and MR PORTER. Given the alignment to the group CapEx policy mentioned above and other adjustments in the setup, previous year numbers are not fully comparable to the current Q4 performance. As we provide previous year comparisons in the Mytheresa segment, we wanted to also make the financial development transparent at the other two segments.

Speaker #4: Other cost lines of the NAP Mr. P Q4 and LTM performance are in line with our expectations and the transformation plan. We also provided illustrative previous year numbers of NAP Mr. P. Given the alignment to the group CapEx policy mentioned above and other adjustments in the setup, previous year numbers are not fully comparable to the current Q4 performance.

Speaker #4: As we provide previous year comparisons in the MyTheresa segment, we wanted to also make the financial development transparent at the other two segments. With the new leadership team at NAP and Mr. P on board, we will refine and invest in our buying and marketing efforts to set NetherPorter and Mr. Porter on a growth trajectory again while improving profitability.

Martin Beer: With the new leadership team at NET-A-PORTER and MR PORTER on board, we will refine and invest in our buying and marketing efforts to set NET-A-PORTER and MR PORTER on a growth trajectory again while improving profitability. With the execution of our transformation plan, we expect the NET-A-PORTER and MR PORTER segment to achieve comparable profitability levels to the Mytheresa segment, with a targeted adjusted EBITDA margin of around 7% to 9% medium term. Let me now review the financial performance of the off-price segment. The off-price segment is set to a more comprehensive restructuring of its business model. The new leadership team has been initiating multiple changes in its operational and business setup to return to a simplified, efficient, and more quality-focused setup. In Q4, especially with the discontinuation of the unprofitable YOOX marketplace model, this led to a deliberate net sales reduction of minus 17.4% to $159.1 million.

Speaker #4: With the execution of our transformation plan, we expect the NAP Mr. P segment to achieve comparable profitability levels to the MyTheresa segment, with a targeted adjusted EBITDA margin of around 7% to 9% in the medium term.

Speaker #4: Let me now review the financial performance of the off-prize segment. The off-prize segment is set to a more comprehensive restructuring of its business model.

Speaker #4: The new leadership team has been initiating multiple changes in its operational and business setup to return to a simplified, efficient, and more quality-focused setup.

Speaker #4: In Q4, especially with the discontinuation of the unprofitable Europe's marketplace model, this led to a deliberate net sales reduction of minus 17.4 percent to 159.1 million.

Speaker #4: On an LTM basis, net sales decreased by 13.2% to €792.8 million. The AOV on an LTM basis increased by 17.4% to €292, in line with the customer quality shift.

Martin Beer: On an LTM basis, net sales decreased by 13.2% to $792.8 million. The AUV on an LTM basis increased by +17.4% to €292, in line with the customer quality shift. The gross profit margin was at 37.9% in the quarter and 35% in the LTM period. The SG&A cost ratio of 28.1% in Q4 mirrors the fundamental restructuring effort needed to enable the off-price segment to return to its historic profitability levels. As with the NET-A-PORTER MR PORTER segment, the SG&A cost ratio now includes the IT development costs into operating expenses instead of CapEx. In fiscal year 2024, off-price had tech people CapEx of €18 million. We are starting to drastically simplify the operating model and to capture efficiencies in its IT and operational setup and corporate overhead.

Speaker #4: The gross profit margin was at 37.9 percent in the quarter, and 35 percent in the LTM period. The SG&A cost ratio of 28.1 percent in Q4 mirrors the fundamental restructuring effort needed to enable the off-prize segment to return to its historic profitability levels.

Speaker #4: As with the NAP Mr. P segment, the SG&A cost ratio now includes the IT development costs into operating expenses instead of CapEx. In fiscal year 24, off-prize had tech people CapEx of 18 million euros.

Speaker #4: We are starting to drastically simplify the operating model and to capture efficiencies in its IT and operational setup, and corporate overhead. In this current state, the off-prize segment experienced an adjusted EBITDA margin in Q4 of minus 17.9 percent, and minus 12.1 percent on an LTM basis, in line with our expectations and the long-term plan.

Martin Beer: In this current stage, the off-price segment experienced an adjusted EBITDA margin in Q4 of -17.9% and -12.1% on an LTM basis, in line with our expectations and the long-term plan. With the execution of our defined transformation plan, we expect to return to adjusted EBITDA profitability of the off-price segment in 18 to 24 months. In Q4, the two new segments, NET-A-PORTER MR PORTER and off-price, had combined a negative operating and investing cash flow of -€46.6 million. For the full fiscal year 2025, those two segments had an operating and investing cash flow of -€4.6 million, driven by low inventory intake and low marketing investments. With the measures of the transformation plan coupled with investments in marketing and networking capital buildup, fiscal year 2026 will be a cash consumption year for LuxExperience.

Speaker #4: With the execution of our defined transformation plan, we expect to return to adjusted EBITDA profitability of the off-prize segment in 18 to 24 months.

Speaker #4: In Q4, the two new segments NAP Mr. P and Off-Prize had combined negative operating and investing cash flows of minus $46.6 million.

Speaker #4: For the full fiscal year 2025, those two segments had an operating and investing cash flow of minus $4.6 million, driven by low inventory intake and low marketing investments. With the measures of the transformation plan, coupled with investments in marketing and networking capital buildup, fiscal year 2026 will be a cash consumption year for Luxe Experience.

Speaker #4: Now that we've reviewed the performance of our individual segments, let's take a look at how these results translate into our group-level financials for Luxe Experience.

Martin Beer: Now that we've reviewed the performance of our individual segments, let's take a look at how these results translate into our group-level financials for LuxExperience. When we refer to reported numbers, it is our financial reporting reflecting the true contribution from the acquired businesses between closing and fiscal year end. When we refer to illustrative numbers, it is reflecting the contribution of the acquired businesses as if they were part of the group for the full periods presented, but excluding acquisition accounting and OFS and Fang Mao businesses that are being wound down. For the full fiscal year 2025 and the June 30 reported group GMV amounted to €1.3 billion. On an illustrative basis, group GMV in the full fiscal year 2025 was €2.9 billion, decreasing from €3.1 billion in the previous 12-month period, representing an overall decrease of -6.3%.

Speaker #4: When we refer to reported numbers, it is our financial reporting reflecting the true contribution from the acquired businesses between closing and fiscal year-end.

Speaker #4: When we refer to illustrative numbers, it is reflecting the contribution of the acquired businesses as if they were part of the group for the full periods presented, but excluding acquisition accounting and OFS and Fang Mao businesses that are being wound down.

Speaker #4: For the full fiscal year 2025, and as of June 30, reported group GMV amounted to $1.3 billion. On an illustrative basis, group GMV in the full fiscal year 2025 was $2.9 billion, decreasing from $3.1 billion in the previous 12-month period.

Speaker #4: Representing an overall decrease of -6.3 percent. Reported group net sales amounted to $1.3 billion for the full fiscal year 2025. On an illustrative basis, net sales were $2.8 billion compared to $2.9 billion in the comparable period, resulting in a decrease of -5.9 percent.

Martin Beer: Reported group net sales amounted to €1.3 billion for the full fiscal year 2025. On an illustrative basis, net sales were $2.8 billion compared to $2.9 billion in the comparable period, resulting in a decrease of -5.9%. Reported group adjusted EBITDA for the full fiscal year 2025 amounted to $44.2 million at an adjusted EBITDA margin of 3.5%. This higher reported group adjusted EBITDA in comparison to illustrative numbers is mostly driven by effects from acquisition accounting. On an illustrative basis, group adjusted EBITDA was -$15.3 million in Q4 of fiscal year 2025 and -$58.7 million for the full fiscal year 2025. The adjusted EBITDA margin was -2.3% in Q4 and -2.1% for the full fiscal year. At the end of the full fiscal year 2025, reported group inventory stood at $1.02 billion, with net working capital at $814.4 million.

Speaker #4: Reported group adjusted EBITDA for the full fiscal year 2025 amounted to plus $44.2 million, at an adjusted EBITDA margin of 3.5 percent. This higher reported group adjusted EBITDA in comparison to illustrative numbers is mostly driven by effects from acquisition accounting.

Speaker #4: On an illustrative basis, group adjusted EBITDA was minus 15.3 million in Q4, or fiscal year 25, and minus 58.7 million for the full fiscal year 25.

Speaker #4: The adjusted EBITDA margin was minus 2.3 percent in Q4, and minus 2.1 percent for the full fiscal year. At the end of the full fiscal year 25, reported group inventory stood at 1 billion and 20 million, with networking capital at 814.4 million.

Speaker #4: Reported group operating cash flow for the fiscal year was -$30.6 million. On an illustrative basis, including all three segments, operating and investing cash flow for the last 12 months was -$2.3 million.

Martin Beer: Reported group operating cash flow for the fiscal year was -$30.6 million. On an illustrative basis, including all three segments, operating and investing cash flow for the last 12 months was -$2.3 million, driven by significantly reduced inventory intake at NET-A-PORTER, MR PORTER, and off-price. The group ended the fiscal year with a cash position of $603.6 million and additional access to an undrawn revolving credit facility of $179.8 million. LuxExperience has a strong balance sheet with $1.8 billion of current assets, mostly inventories and cash, almost no bank debt, and an equity ratio of 59%. Let me now talk to the financial outlook of LuxExperience based on the most recent near-term and medium-term expectations. With the implementation of our transformation plan, fiscal year 2026 will be a transition year. In addition, given the persistent uncertainties on the direct and indirect U.S.

Speaker #4: Driven by significantly reduced inventory intake at NAP Mr. P and Off-Prize, the group ended the fiscal year with a cash position of $63.6 million, and additional access to an undrawn revolving credit facility of $179.8 million.

Speaker #4: Luxe Experience has a strong balance sheet, with 1.8 billion of current assets, mostly inventories and cash, almost no bank debt, and an equity ratio of 59 percent.

Speaker #4: Let me now talk to the financial outlook of Luxe Experience based on the most recent near-term and medium-term expectations. With the implementation of our transformation plan, fiscal year 2026 will be a transition year.

Speaker #4: In addition, given the persistent uncertainties regarding the direct and indirect U.S. customs effects on worldwide customer sentiment, we look at the next 12 months with prudent conservatism.

Martin Beer: customs effects on worldwide customer sentiment, we look at the next 12 months with prudent conservatism. We expect Mytheresa to continue growing its GMV top line. NET-A-PORTER and MR PORTER will still need fiscal year 2026 to readjust their buying and marketing strategy and will therefore still slightly decline in GMV. Off-price in fiscal year 2026 will continue the restructuring of its operating and business model. We therefore expect GMV at off-price to continue to decrease considerably. In sum, in fiscal year 2026, LuxExperience at group level is expected to have a GMV at around $2.5 to $2.9 billion. Medium term, we expect LuxExperience to return to 10% to 15% annual growth rates. Given the uncertainties in the market mentioned earlier and fiscal year 2026 being a transition year, we expect in fiscal year 2026 comparable profitability levels to fiscal year 2025.

Speaker #4: We expect MyTheresa to continue growing its GMV top line. NAP Mr. P will still need fiscal year 26 to readjust its buying and marketing strategy and will therefore still slightly decline in GMV.

Speaker #4: Off-prize in fiscal year 26 will continue the restructuring of its operating and business model. We therefore expect GMV at Off-prize to continue to decrease considerably.

Speaker #4: In sum, for fiscal year 2026, Luxe Experience at the group level is expected to have a GMV of around $2.5 to $2.9 billion. In the medium term, we expect Luxe Experience to return to annual growth rates of 10 to 15 percent.

Speaker #4: Given the uncertainties in the market mentioned earlier, and Fiscal Year 26 being a transition year, we expect in Fiscal Year 26 comparable profitability levels to Fiscal Year 25.

Speaker #4: In sum, Luxe Experience at the group level is expected to report an adjusted EBITDA margin between -4% and +1%. We are in an ideal position to execute our transformation plan.

Martin Beer: In sum, LuxExperience at group level is expected to report an adjusted EBITDA margin between -4% and +1%. We are in an ideal position to execute our transformation plan. With our continued success at Mytheresa, we have proven that we are the best execution team in global digital luxury. The new leadership teams at NET-A-PORTER, MR PORTER, and off-price have begun their work, and at group level, we are in the midst of implementing the measures of our transformation plan. The integration of the YOOX finance teams and formation of all LuxExperience group structures have started early, and we are well on the way.

Speaker #4: With our continued success at MyTheresa, we have proven that we are the best execution team in global digital luxury. The new leadership teams at NAP, Mr. P, and Off-Prize have begun their work, and at the group level, we are in the midst of implementing the measures of our transformation plan.

Speaker #4: The integration of the YNAB finance teams and formation of all Luxe Experience group structures have started early, and we are well on the way.

Speaker #4: Key activities included a new group-wide organization and governance setup, an integrated finance consolidation and IRS 16 tool, new segment reporting, and unified accounting and reporting policies with transparent cost center structures to enable accountability and cost savings.

Martin Beer: Key activities included a new group-wide organization and governance setup, an integrated finance consolidation and IFRS 16 tool, new segment reporting, unified accounting and reporting policies with transparent cost center structures to enable accountability and cost savings, and a highly efficient and effective finance group team setup. The statutory and group audits for fiscal year 2025 under strict PCAOB guidelines are progressing well, and we expect to file our 20-F as planned end of October. The full execution of the transformation plan, which includes operational adjustments, technology platform integration, and organizational alignment, is already fully funded and with additional leeway for the €555 million cash injection of Bridgemore at closing. At the end of June 2025, LuxExperience had a total available liquidity of €784 million, including cash at hand of €604 million and no bank debt, just a small utilization of our revolver of €20.2 million.

Speaker #4: And a highly efficient and effective finance group team setup. The statutory and group audits for fiscal year 2025, under strict PCAOB guidelines, are progressing well, and we expect to file our 20-F as planned by the end of October.

Speaker #4: The full execution of the transformation plan, which includes operational adjustments, technology platform integration, and organizational alignment, is funded, with additional leeway provided by a $555 million cash injection from Bridgemont at closing.

Speaker #4: At the end of June 2025, Luxe Experience had a total availability liquidity of €784 million, including cash at hand of €604 million, and no bank debt.

Speaker #4: Just a small utilization of our revolver of $20.2 million. We expect the turnaround to require funds in total of no more than $350 million to $450 million.

Martin Beer: We expect the turnaround to require funds in total of no more than €350 million to €450 million, and we expect to report positive operating cash flow for the group in two to two and a half years. The setup of LuxExperience with its three operating segments is designed to preserve the strength of each segment while unlocking meaningful long-term value. While we are already seeing initial positive momentum, we will continue to carefully manage the business to drive operational improvements and strategic growth. We are fully committed on executing our transformation plan and creating significant value for our shareholders and stakeholders. Medium term, we expect to grow LuxExperience to $4 billion revenues with adjusted EBITDA of around $320 million at an adjusted EBITDA margin of around 8% at the levels we have proven to achieve in the past.

Speaker #4: And we expect to report positive operating cash flow for the group in two to two and a half years. The setup of Luxe Experience, with its three operating segments, is designed to preserve the strength of each segment while unlocking meaningful long-term value.

Speaker #4: While we are already seeing initial positive momentum, we will continue to carefully manage the business to drive operational improvements and strategic growth. We are fully committed to executing our transformation plan and creating significant value for our shareholders and stakeholders.

Speaker #4: Medium term, we expect to grow Luxe Experience to $4 billion in revenues, with adjusted EBITDA of around $320 million, at an adjusted EBITDA margin of around 8 percent, at the levels we have proven to achieve in the past.

Speaker #4: As the clear leader in global digital luxury, we have a track record of multi-year growth at Kager's well above 12 percent. With this, I hand over to Michael for his concluding remarks.

Martin Beer: As the clear leader in global digital luxury, we have the track record of multi-year growth at CAGR's well above 12%. With this, I hand over to Michael for his concluding remarks.

Speaker #2: Luxe Experience is in a remarkable position to become the one and only destination for luxury enthusiasts worldwide, bringing together some of the most iconic brands in digital luxury retail.

Michael Kliger: LuxExperience is in a remarkable position to become the one and only destination for luxury enthusiasts worldwide, bringing together some of the most iconic brands in digital luxury retail. The outstanding performance of Mytheresa shows our unique ability to deliver continued success in digital luxury. We will bring these capabilities and our successful approach to the new store brand. We managed to have a very fast start and have already made significant changes to the YOOX structure, processes, and infrastructure since the completion of the acquisition in April. We will leverage the scale and scope of the newly formed group for efficiencies and value creation across the business segments. By building a community for luxury enthusiasts worldwide and creating desirability through digital and physical experiences, we will continue to generate enormous value for our customers, brand partners, and shareholders. I ask the operator to open the line for your question.

Speaker #2: The outstanding performance of MyTheresa shows our unique ability to deliver continued success in digital luxury. We will bring these capabilities and our successful approach to the new store brands.

Speaker #2: We managed to have a very fast start and significant changes to the YNAB structure processes and infrastructure since the completion of the acquisition in April.

Speaker #2: We will leverage the scale and scope of the newly formed group for efficiencies and value creation across the business segments. By building a community for luxury enthusiasts worldwide and creating desirability through digital and physical experiences, we will continue to generate enormous value for our customers, brand partners, and shareholders.

Speaker #2: And with that, I ask the operator to open questions.

Speaker #4: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now.

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. Please stand by briefly while we compile the Q&A roster. Your first question comes from the line of Oliver Chen with TD Cowen. Your line is open. Please go ahead.

Speaker #4: If you have dialed in to today's call, please press Star 9 to raise your hand and Star 6 to unmute. Please stand by briefly while we compile the Q&A roster.

Speaker #4: Your first question comes from the line of Oliver Chen with TD Cohen. Your line is open, please go ahead.

Speaker #5: Hi, Michael, Martin, thank you. On the MyTheresa business, the AOV was impressive, as well as the margins. What parts of the MyTheresa business experienced upside relative to your expectations, and what should we expect in terms of the margin profile going forward?

[Analyst 1]: Hi, Michael. Martin, thank you. On the Mytheresa business, the AOV was impressive as well as the margins. What parts of the Mytheresa business experienced upside relative to your expectations? What should we expect in terms of the margin profile going forward? You had a nice benefit with the unit economics. Also, you called out that SG&A, big opportunity on the SG&A side on the NET-A-PORTER division. What's the roadmap for timing of what we should expect there, given it's a nice opportunity and some of it's within your control? On the customs effect, that would be helpful for us to understand what we should be thinking about with the risk associated with the sentiment that you articulated relative to customs.

Speaker #5: You had a nice benefit with the unit economics. Also, you called out that SG&A, big opportunity on the SG&A NetherPorter division, what's the roadmap for timing of what we should expect there?

Speaker #5: You know, given that it's a nice opportunity and some of it's within your control. And then on the customs effect, that would be helpful for us to understand what we should be thinking about with the risk associated with the sentiment that you articulated relative to customs.

Speaker #5: And finally, as you articulated the guidance billion, it would be helpful for us to understand what you're seeing regionally and what you're assuming geographically in terms of achieving that guidance.

[Analyst 1]: Finally, as you articulated the guidance on the $2.5 to $2.9 billion, it'd be helpful for us to understand what you're seeing regionally and what you're assuming geographically in terms of achieving that guidance level at the top line. Thank you.

Speaker #2: Thank you, Oliver, for this one question. Let me start with your first question. I think clearly the group guidance expects that we will continue to improve the profitability in the MyTheresa business, continue improving full price and thus have a further increase in gross margin.

Michael Kliger: Thank you, Oliver, for this one question. Let me start with your first question. I think clearly the group guidance expects that we will continue to improve the profitability in the Mytheresa business, continually improving full price and thus have a further increase in gross margin. Upsides, I mean, we reported a very strong European business in this quarter, which is great. This is an important or the largest part of the Mytheresa trading. We do expect continued strong growth in the U.S. We're all aware that things are quite fickle nowadays, so this is all based on what we know today. There is continued growth and continued margin improvement for Mytheresa definitely possible. On the SG&A roadmap, I think also based on the May presentation, the elements are clear. It's in the operations, it's in the corporate functions, it's in the technology, it's in the data leverage.

Speaker #2: Upsides. I mean, we reported a very strong European business in this quarter, which is great. This is an important or the largest part of the MyTheresa trading.

Speaker #2: And we will, we do expect the continued strong growth in the U.S. We're all aware that things are quite fickle nowadays, so this is all based on what we know today. However, there is continued growth and continued margin improvement for MyTheresa definitely.

Speaker #2: Definitely possible. On the SG&A roadmap, I think also based on the May presentation, the operations are in the corporate functions, in the technology, and in the data leverage.

Speaker #2: A lot of it is under our control, as you rightly put, Oliver. We are moving very fast on operations, and this will definitely show the fastest and first results.

Michael Kliger: A lot of it is under our control, as you rightly put, Oliver. We are moving very fast on operations, and this will definitely show the fastest and first results. Corporate also, we are going with a fine comb to all SG&A cost. Technology, this is the biggest part of savings, but this is the one that definitely takes two to two and a half years. Maybe for the two last questions, I hand over to Martin on customs and guidance.

Speaker #2: Corporate also, we are going with a fine comb to all SG&A costs, technology, this is the biggest part of savings, but this is the one that definitely takes two to two and a half years.

Speaker #2: And maybe for the last two questions, I will hand over to Martin regarding customs and guidance.

Speaker #5: Yeah, happy hi. Hi, Oliver. I'm happy to answer on the customs side. I mean, what we're currently seeing is that the indirect customs effect on customer sentiment is containable.

Martin Beer: Happy. Hi, Oliver. Happy to answer on the customs side. What we currently see is that the indirect customs effect on the customer sentiment is containable. We see a continued strong growth of Mytheresa and all other business. The overall effect of U.S. customs in the industry is still there, but we see green shoots. We see positive developments and also for us, not a barrier to continue our strong growth worldwide.

Speaker #5: So we see continued strong growth of MyTheresa, and then all other businesses. The overall effect of U.S. customs in the industry is still there, but we see green shoots.

Speaker #5: We see positive developments, and also for us, there's not a barrier to continue our strong growth worldwide. Now, let's move on to the second question. Regionally, as you think about the growth rates, how are you thinking about the U.S. relative to Europe? Any comments or thoughts on what you're seeing in Asia in terms of the model going forward and geographic dynamics?

[Analyst 1]: Sorry, what was the second question? Regionally, as you think about the growth rates, how are you thinking about the U.S. relative to Europe, and any comments or thoughts on what you're seeing in Asia in terms of the model going forward, geographic dynamics? Thank you.

Speaker #5: Thank you.

Speaker #6: Yeah, I mean, maybe we start with the last aspect. In our guidance growth, there is nothing like unexpected super growth in Asia modeled in or built in.

Martin Beer: Yeah. I mean, I guess to start with the last aspect, in our guidance growth, there's nothing like unexpected, you know, super growth in Asia modeled in or built in. We continue to see what everybody sees that, you know, Asia, especially China, is still weak. As you know, our base is very small, so China is for us rather an option for further growth once the situation improves. In the guidance, nothing is built in there. As Michael called out, the regional growth avenues are quite vast for us. We continue and expect to continue to grow worldwide with strong growth in Europe, continued also strong growth in the U.S. This is also clearly visible for us. We are able to grow in all regions, no matter what the situation is there.

Speaker #6: So, we continue to see what everybody sees: that, you know, Asia, especially China, is still weak. As you know, our base is very small, so for us, China is rather an option for further growth once this situation improves.

Speaker #6: But in the guidance, nothing is built in there. And as Michael called out, I mean, the regional growth avenues are quite vast for us.

Speaker #6: So we continue and expect to continue to grow worldwide, with strong growth in Europe and continued strong growth in the U.S. This is also clearly visible for us.

Speaker #6: And we are able to grow in all regions, no matter what the situation is there. So on the regional side, especially looking at the guidance, there is no unexpected changes in what we have seen so far.

Martin Beer: On the regional side, especially looking at the guidance, no unexpected or change in what we have seen so far. A continuous strong development of LuxExperience in all regions.

Speaker #6: Continuous strong development of regions.

Speaker #2: Thank you, best regards.

Michael Kliger: Thank you. Best regards.

Speaker #4: As a reminder, if you'd like to ask a question, please raise your hand. If you've dialed in to today's call, please press *9 to raise your hand and *6 to unmute your line.

Operator: As a reminder, if you'd like to ask a question, please raise your hand. If you've dialed into today's call, please press star nine to raise your hand and star six to unmute your line. We have a follow-up question from the line of Oliver Chen. Please go ahead. Hi, Oliver. Can't hear you currently, so we're going to move on to the next question. Next question comes from the line of Blake Anderson with Jefferies. Your line is open. Please go ahead.

Speaker #4: We have a follow-up question from the line of Oliver Chen. Please go ahead. Hi, Oliver. Can't hear you currently, so we're going to move on to the next question.

Speaker #4: Next question comes from the line of Blake Anderson with Jefferies. Your line is open, please go ahead.

Speaker #7: Hi, guys. Congrats on all the deal progress so far, and I appreciate you taking the questions. I wanted to just ask on guidance. Could you give any more color on the key factors that would lead you to hitting the lower end of your EBITDA margin guidance?

[Analyst 2]: Hi, guys. Congrats on all the deal progress so far, and I appreciate you taking the question. I wanted to just ask on guidance. Could you give any more color on the key factors that would lead you to hitting the lower end of your EBITDA margin guidance versus the higher end? I'm wondering, on quarterly cadence, can you provide maybe any quarter-to-date trends you've seen and any shaping of the year? Thanks so much.

Speaker #7: Versus the higher end? And then I'm wondering, on a quarterly cadence, can you provide maybe any quarter-to-date trends you've seen and any shaping of the year?

Speaker #7: Thanks so much.

Speaker #6: Yeah, I mean, if you look at the quarterly guidance, I mean, as you know, as you well know, the quarters are mostly driven by the seasonality of the business.

Martin Beer: Yeah. I mean, if you look at the quarterly guidance, as you know, the quarters are mostly driven by the seasonality of the business. With Q2 and Q4 being stronger quarters and Q1 and fiscal Q3 being weaker quarters, this season cadence will continue. On the overall guidance, obviously, given that we're in the midst of the restructuring of two segments and seeing the overall situation in the market, also with other brands, we want to be conservatively prudent. Therefore, we have guided for a large spread of the adjusted EBITDA margin. The lower end is then driven by a more conservative approach of looking at the overall market development that obviously stays still a bit uncertain on multiple fronts.

Speaker #6: So with Q2 and Q4 being stronger quarters in Q1 and fiscal Q3 being weaker quarters. So this season cadence will continue. And on the overall guidance, obviously given that we're in the midst of the restructuring of two segments, and seeing the overall situation in the market also with other brands, we want to be conservatively prudent.

Speaker #6: And therefore, we have guided for a large spread of the adjusted EBITDA margin and therefore the lower end is then driven by, you know, a more conservative approach of looking at the overall market development that obviously stays still a bit uncertain on multiple fronts.

Speaker #6: Yeah.

Speaker #4: Thank you. As a reminder, if you'd like to ask a question, please raise your hand. We have a follow-up question from Oliver Chen. Oliver, please ensure your line is unmuted.

Operator: Thank you. As a reminder, if you'd like to ask a question, please raise your hand. We have a follow-up question from Oliver Chen. Oliver, please ensure your line is unmuted.

Speaker #5: Hi, thanks a lot. I appreciate that. On the details on NetherPorter, you mentioned a couple of issues regarding inventory as well as demand creation on the marketing side.

[Analyst 1]: Hi. Thanks a lot. Appreciate that. On the details on NET-A-PORTER, you mentioned a couple of issues regarding inventory as well as demand creation on the marketing side. What's the timing and roadmap on both of those opportunities? It looks like they're definitely impacting the margin. Thanks.

Speaker #5: What is the timing and roadmap for both of those opportunities? It looks like they're definitely impacting the margins. Thanks.

Speaker #2: Well, as you know, there is a significant lead time in terms of changing assortment and moving the buy. So we have a strong new buying direct in place.

Michael Kliger: There is a significant lead time in terms of changing assortment, moving the buy. We have a strong new Buying Director in place. He's in the market. The fall/winter 2026 is the assortment that is now being bought, and this kicks in early deliveries in May of next year. The performance of the coming fiscal year is still very much influenced by spring/summer 2026 that, outside of the main selections, has already been bought. There are many other opportunities on the marketing side in terms of customer acquisition and customer targeting. We are changing the approach to performance marketing based on the experience and also models that we have built at Mytheresa over the years.

Speaker #2: He's in the market, so the four Winter 26 is the assortment that is now being bought. This kicks in early deliveries in May of next year.

Speaker #2: So the performance of the coming fiscal year is still very much influenced by spring summer 26 that outside of the main selections has already been bought, but there are many other opportunities on the marketing side in terms of customer acquisition, customer targeting.

Speaker #2: We are changing the approach to performance marketing based on the experience and also models that we have built at MyTheresa over the years. So, merchandise has the longest lead time on marketing and customers. However, customer tactics and top customer engagement, all of these levers that have been neglected, or in our view not executed correctly, will kick in, and you will already see an impact in those aspects in the first half of the next calendar year.

Michael Kliger: Merchandise has the longest lead time on marketing and customers, but customer tactics, top customer engagement, all of these levers that have been neglected or, in our view, not executed correctly, will kick in and you will already see impact in those aspects in the first half of the next calendar year.

Speaker #5: Okay, Michael. Also, there has been a lot happening in the backdrop with different closures and distress as well. What are your thoughts on the current state of the promotional environment that you're seeing and the opportunities amidst the closures?

[Analyst 1]: Okay, Michael. Also, there's been a lot happening in the backdrop with different closures and distress as well. What are your thoughts on the current state of the promotional environment that you're seeing and opportunities amidst the closures? As we look at the designer landscape, you have a lot of really strong relationships and there's a ton of newness on the creative side. What are your latest thinkings on the changes creatively and quiet relative to louder luxury?

Speaker #5: And then, as we look at the designer landscape, you have a lot of really strong relationships, and there's a ton of newness on the creative side.

Speaker #5: What are your latest thoughts on the changes creatively and quietly relative to louder luxury?

Speaker #2: Yeah, on your first part, I think, yes, we have seen further steps in the consolidation of the sector. I still refer to it as a sort of perfect example of an industry curve that after a boom, and some weaker demand seasons, there is consolidation.

Michael Kliger: Yeah. On your first part, I think, yes, we have seen further steps in the consolidation of the sector. I still refer to it as a sort of perfect example of an industry curve that after boom and some weaker demand seasons, there is consolidation. I continue to believe, and I think this also drives some of our numbers, this consolidation helps to get to a healthier industry, to a reduction in promotional activities of different players. It's for sure that we have a much more balanced inventory-to-demand equation at the moment in place. As long as demand continues to develop as it has over the last couple of months, we should be very fine. Of course, these things are fickle. To your second part, you're absolutely right. I mean, we are really at the pivotal moment at many houses, new designers.

Speaker #2: I think this also drives some of our numbers. This consolidation helps to get to a healthier industry and leads to a reduction in promotional activities from different players.

Speaker #2: It's for sure that we have a much more balanced inventory-to-demand equation at the moment in place. So, as long as demand continues to develop as it has over the last couple of months, we should be very fine.

Speaker #2: Of course, these things are fickle. And to your second part, you’re absolutely right. I mean, we are really at a pivotal moment at many houses.

Speaker #2: New designers have made their first debuts, including Demagazzali as the new creative director at Gucci, which has brought a lot of new attention to the brand.

Michael Kliger: We have seen some first debuts, to name Emma Gazzali as the new Creative Director at Gucci, which brought a lot of new attention to the brand. We will have further new designers at Bottega on Saturday with Louis Trotter. We will have a new designer at Versace presenting on Friday. We believe there's a huge level of opportunity in there. There will be a lot of attention garnered by press, by influencers, by ambassadors. We believe that not everything will work, but there's a significant amount of creativity coming into this market, and that's what it needs. We're really looking forward to it, and our buyers are ready to jump in when they see opportunities, when they see attractive merchandise. As outlined by Martin, we are in a position to put dollars behind it if we believe there is a strong talent in the market.

Speaker #2: We will have further new designers at Bottega on Saturday with Louise Trotta. We will have a new designer at Versace presenting on Friday, and we believe there is a huge level of opportunity in there.

Speaker #2: There will be a lot of attention garnered by press, by influencers, and by ambassadors. So we believe that not everything will work, but there's a significant amount of creativity coming into this market, and that's what it needs.

Speaker #2: And so we are really looking forward to it, and our buyers are ready to jump in when they see opportunities, when they see attractive merchandise.

Speaker #2: As outlined by Martin, we are in a position to put dollars behind this if we believe there is a strong tenant in the market.

Speaker #5: Okay, and on the consumer sentiment piece, as you know, it's been somewhat volatile. What are you seeing with consumer sentiment and the feel-good factor in relation to your Gucci as well.

[Analyst 1]: Okay. On the consumer sentiment piece, as you know, it's been somewhat volatile. What are you seeing with consumer sentiment and the feel-good factor in relation to your business? It's been exciting at Gucci as well. It's a rebirth or a transformation with what's happening at that brand. Would love any thoughts on that opportunity as well.

Speaker #5: It's the rebirth or a transformation with what's happening at that brand. Would love any thoughts on that opportunity as well.

Speaker #2: I think I have whatever I say. I have to really build on your remark. We are in a very volatile environment, so everything we see is only as valid as far as we can sort of predict the future. But sentiment has been improving.

Michael Kliger: I think I have to really build on your remark. We are in a very volatile environment. Everything we see is only as valid as far as we can sort of predict the future. Sentiment has been improving. I refer back to the strong results in the last quarter in Europe for Mytheresa. We continue to see good growth and acceleration in the demand in the United States. In Asia, from a very low level, there are improvements visible. Current trends are positive at different sort of levels of strength. We are in a volatile environment, and we have seen a lot of macro shocks that change that quite quickly. Gucci is one of the biggest luxury brands in the industry. Even with the negative trend of recent years, it's still a top five luxury brand.

Speaker #2: I mean, I refer back to the strong results in the last quarter in Europe, for MyTheresa. We continue to see good growth and acceleration in the demand in the United States.

Speaker #2: In Asia, from a very low level, there are improvements visible. So, current trends are positive at different sorts of levels of strength. But again, we are in a volatile environment, and we have seen a lot of macro shocks that can change that quite quickly.

Speaker #2: Gucci is one of the biggest luxury brands in the industry. Even with the negative trend of recent years, it's still a top five luxury brand.

Speaker #2: And so a new designer bringing in a lot of creativity and creating quite a lot of buzz in the last two days is very positive.

Michael Kliger: A new designer bringing in a lot of creativity and creating quite a lot of buzz in the last two days is very positive. Again, this is never.

Speaker #2: Again, this is never a on

Speaker #1: Season game, this is, establishing new codes, building on the existing codes of the brand. So, great start. And without a great start, you can't have a continuation.

Operator: This is establishing new codes, building on the existing codes of the brand. Great start. Without a great start, you can't have a continuation. A great start alone is, of course, also not enough.

Speaker #1: But a great start alone is, of course, also not enough.

Speaker #2: Thank you. Finally, on the off-price division, you've been consistent with the need to take out costs there and rebase it to what's appropriate for the margin profile of that division.

Martin Beer: Thank you. Finally, on the off-price division, you've been consistent with the need to take out cost there and rebase it to what's appropriate for the margin profile of that division. What are the harder parts of that business? It's pretty different in terms of the buying techniques as well as the customer. What do you see happening in terms of your core competencies relative to that division? How quickly can you get the margin structure in a place that you're happy with?

Speaker #2: And what are the harder parts of that business? And it's pretty different in terms of the buying techniques as well as the customer. What do you see happening in terms of your core competencies relative to that division?

Speaker #2: And how quickly can you get the margin structure in a place that you're happy with?

Speaker #1: It is a different business. I mean, we have shared the small overlap between the two luxury segments and that segment. But still, it is retail, and we firmly believe that the strict application of the principles of focusing on the customer, understanding what he or she really desires, servicing them well, and of course, being frugal.

Operator: It is a different business. I mean, we have shared the small overlap between the two luxury segments and that segment. Still, it is retail, and we firmly believe that the strict application of the principles of focusing on the customer, understanding what he or she really desires, servicing them well, and of course, being frugal. It's not so much that these two businesses spend without any understanding of the cost structure. They were sitting on a cost structure that was not engineered for off price. It's really what we stressed often, the separation of the infrastructure from the luxury, to provide them an infrastructure that fits their gross profit margin in off price and off season is lower by definition of that business model.

Speaker #1: And it's not so much that these two businesses spend without any understanding of their cost structure. They were sitting on a cost structure that was not engineered for off-price.

Speaker #1: So it's really what we stressed often: the separation of the infrastructure from the luxury to provide them an infrastructure that fits their gross profit margin. Off-price and off-season is lower by definition of that business model.

Speaker #1: And so I think there are different challenges. But the opportunities are as big, and the time horizon is as fast as we see with the metropolitan luxury segment.

Operator: I think there are different challenges, but the opportunities are as big, and the time horizon is as fast as we see with the NET-A-PORTER, NET-A-PORTER, MR PORTER luxury segment.

Michael Kliger: Thank you. There are no further questions pending at this time. This concludes today's call. Thank you for attending. You may now disconnect.