Q1 2026 LuxExperience BV Earnings Call

Speaker #1: Greetings, and welcome to the Luxe Experience first quarter of fiscal year 2026 earnings conference call. At this time, all participants are in a listen-only mode.

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 first quarter of fiscal year 2026. With me today is our CEO, Michael Kliger.

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 review the results and performance of the first quarter of fiscal year 2026 for Luxe Experience.

Speaker #3: As a group, we have now become the clear digital multi-brand leader for luxury and serious worldwide. We are perfectly positioned to benefit from the expected further growth of the digital luxury market, as well as from the ongoing consolidation process among the remaining players.

Speaker #3: As explained last time, Luxe Experience reports on the basis of a new segment reporting structure. The three segments are Luxury MYT Nether, Luxury Nether Portier, and Mr. Porter, as well as Off Price.

Speaker #3: We are very pleased with the results of the first quarter. Across all three segments, we have delivered strong results and improvements. MYT Nether continues to demonstrate our unique ability to deliver strong growth and profitability despite ongoing macro headwinds.

Speaker #3: Nether Portier and Mr. Porter clearly show the first signs of the commercial turnaround, which will drive the new growth and profitability for the two store brands after years of decline.

Speaker #3: In the off-price segment, we anticipated a fundamental transformation by focusing on the healthy core, and I am pleased that we have been off to a fast start here also.

Speaker #3: We just announced that we have reached an agreement to sell the assets powering the outlet platform to Whole Group, LLC. Shareholders of Whole Group, LLC include Joseph Ellery and Ritesh Punjabi, CEO of Timeless Group of Companies.

Speaker #3: Both are renowned experts in the off-price luxury fashion sector. The divestment of the outlet assets is a strategic step in line with our transformation plan announced in May 2025, which strengthens the operating model by reducing complexity.

Speaker #3: We believe that we have found a great new home for the outlet, and we can now fully focus on the transformation of the UK's business and the disentanglement of off-price from the luxury businesses in the backend.

Speaker #3: This will allow us to also accelerate the buildup of an efficient infrastructure platform for Nether Portier and Mr. Porter. The closing of the transaction with the whole group is expected to occur in Q1 of calendar year 2026.

Speaker #3: Subject to certain closing conditions, including customary regulatory approvals and payment of the purchase price. Which is subject to adjustments based on inventory levels at closing.

Speaker #3: As a result of the transaction, the off-price segment will purely refer to the business of the UK from now on, while we classify the outlet as discontinued operations, as it is no longer considered part of our core financial performance.

Speaker #3: Let me now start by commenting on the MYT Netherlands business. We are extremely pleased with the outstanding results in the first quarter of fiscal year 2026.

Speaker #3: The ongoing and even accelerating momentum from the previous quarters demonstrates the strength of our business model, which focuses on wardrobe building for big-spending luxury customers.

Speaker #3: In Q1 of fiscal year 2026, we grew our net sales by 12.2% compared to Q1 fiscal year 2025. In the United States, which is a key market for our business, net sales growth reached 21.9% in Q1 fiscal year 2026 compared to Q1 fiscal year 2025.

Speaker #3: The U.S. accounted for 22.1% of the net sales of our total business in the first quarter. In Europe, excluding Germany, we experienced again an excellent net sales growth of plus 14.1% in Q1 fiscal year 2026.

Speaker #3: Our clear focus on big spending wardrobe-building customers is the fundamental driver of our outstanding growth and financial strength at MYT Nether. In the first quarter of fiscal year 2026, the top customer base of MYT Nether grew by 10.2% compared to the prior year period.

Speaker #3: Significantly higher than in previous quarters. Furthermore, we average spent per top customer in terms of GMV grew again by a very strong plus 15% in Q1 fiscal year 26 versus Q1 fiscal year 25.

Speaker #3: The average order value for the last 12 months for MYT Netherlands increased by a remarkable 10.7% to a record €797 in Q1 fiscal year 2026.

Speaker #3: Demonstrating the success of our focus on selling full price high-end luxury products to top customers. The continued full price focus at MYT Nether is also evidenced with the again improved gross profit margin growing by 70 basis points in Q1 fiscal year 26.

Speaker #3: Our success with big-spending wardrobe-building customers makes MYT Netherlands a highly desired partner for luxury brands. In the first quarter of fiscal year 2026, we saw again many high-impact campaigns and exclusive product launches.

Speaker #3: Underlining MYT Nether's strong relationships with luxury brands, we launched exclusive styles from the Nether Fall/Winter 2025 runway collection for women's wear and men's wear, only available at MYT Nether.

Speaker #3: As well as an exclusive women's wear Max Mara cashmere capsule collection only available at MYT Nether. We were the exclusive pre-launch partner for Brunella Cucinelli's Fall Winter 25 collection and Calvin Klein collection Fall Winter 25 collection for women's wear and men's wear.

Speaker #3: We also launched exclusive women's wear styles from Moncler's Fall Winter 25 collection as well as exclusive styles from GOTS True Cashmere and Zenyal's Fall Winter 25 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 MYT Netherlands' top customers through unique, money-can't-buy physical experiences.

Speaker #3: In the first quarter, we hosted various top customer events including a private diamond masterclass and a tailored styling session with Jessica McCormick at her Mayfair townhouse in London.

Speaker #3: Together with Givenchy, we celebrated Sarah Burton's debut runway collection with a curated cocktail reception, a private exhibition tour, and an intimate dinner in Shanghai.

Speaker #3: We hosted a top customer cocktail in Madrid at the Rosewood Hotel and also held an exclusive Scapparelli-style suite there. To celebrate London, Milan, and Paris Fashion Weeks, we invited top customers to various shows to experience the magic of one way firsthand.

Speaker #3: Furthermore, we hosted style suites in London, Hampton, New Jersey, Singapore, Hong Kong, Warsaw, Frankfurt, and Zurich, presenting new collections in immersive curated environments.

Speaker #3: Highlights in the United States included intimate dinners with Michelin starred chefs in Aspen and Los Angeles. We hosted a New York Fashion Week after party at the legendary Indochine with Calvin Klein collections.

Speaker #3: We partnered with Nether for an exclusive event at the Glasshouse in Connecticut, showcasing the brand's exclusive collection inspired by Joseph and Annie Albert. Followed by an intimate dinner by chefs Riad Nazar and Lee Hansen of Franchette.

Speaker #3: Furthermore, we hosted an exclusive two-day experience with Zenyal in Turin, featuring an on-stage dinner with a private opera performance at Teatro Regio, and the next day, a lunch at the famous Ristorante del Cambio.

Speaker #3: In summary, we are extremely pleased with the MYT Nether business in the first quarter of fiscal year 26, and Martin will later show how the outstanding top line results translated into very strong bottom line results.

Speaker #3: Let me now comment on the luxury segment comprised of Metropolitan and Mr. Porter. In the first quarter of fiscal year 2026, we clearly saw the first signs of the commercial turnaround directly resulting from this.

Speaker #3: Execution of a strategy that focuses on luxury customers seeking editorial inspiration and brand discovery, as well as a strict focus on full-price selling.

Speaker #3: In Q1 fiscal year 2026, net sales declined as expected by 10.8% versus Q1 fiscal year 2025 for Metropolitan and Mr. Porter combined. The United States declined by 10.7%, and Europe excluding the UK and Germany by 3.6% in terms of net sales in Q1 fiscal year 2026 compared to Q1 fiscal year 2025.

Speaker #3: The net sales decline is still driven by too few investments in attractive new merchandise a year ago for the current fall-winter season. For the next spring-summer season, we can already see improved results.

Speaker #3: While the overall net sales declined for Metropolitan and Mr. Porter combined, the average spend in terms of GMV per EIP customer, the so-called Extremely Important People customers, grew by 4% in Q1 Fiscal Year 26 versus Q1 Fiscal Year 25.

Speaker #3: The average order value over the last 12 months increased by a remarkable 15.5% to €836 for Metropolitan and Mr. Porter combined in Q1 fiscal year 2026.

Speaker #3: Finally, the gross profit margin improved by 130 basis points in Q1 fiscal year 2026 for Metropolitan and Mr. Porter combined, driven by a higher share of full-price sales, among other factors.

Speaker #3: All these KPIs indicated an already much healthier business. In the first quarter of fiscal year 26, a renewed focus on high impact campaigns and exclusive product launches was successfully initiated for Metropolitan and Mr. Porter with a clear focus on luxury customers.

Speaker #3: Looking for editorial inspiration and brand discovery. Metropolitan launched an exclusive capsule with Jimmy Choo focused on key boot styles for fall winter 25. Metropolitan also launched an exclusive colorway of the iconic Clouet Paddington bag, which drove outstanding media engagement with audiences as well as an exclusive on-trend animal print Miele Lotan bag.

Speaker #3: All drove commercial success and increased brand awareness as the destination for fashion discovery. Mr. Porter launched a Bottega Veneta for winter 25 collection with an exclusive pre-launch for EIP customers.

Speaker #3: Mr. Porter also launched 13 exclusive styles from the Enfant Riche Déprimé Fall Winter 25 collection, and Metropolitan and Mr. Porter both launched Emlyon door as a new brand each with exclusive capsule collections.

Speaker #3: Further new brand launches at Mr. Porter include Eleventi, Appressé, Morace, and Satoshi Nakamoto. Metropolitan also continued to drive outstanding customer engagement through unique editorial content.

Speaker #3: In September, the Oscar-nominated actress Emily Blunt was the cover star of Porter magazine, marking the most engaged Porter cover in the last 12 months.

Speaker #3: September also saw Metropolitan present season 10 of the incredible woman podcast series celebrated with a private event in London, hosted by international model actress and campaigner Adova Aboa.

Speaker #3: Mr. Porter's journal feature on Walton Goggins drove 14,500 visits to the journal section, whilst its video attracted 390,000 views on Instagram Reels. It was featured in media outlets including People magazine and the Hollywood Reporter.

Speaker #3: Partnering with such talent has proved effective in reaching new audiences and enhancing brand visibility and driving traffic to the Mr. Porter side. Mr. Porter's film with actor Adam Brody modeling key design items has had 593,000 views.

Speaker #3: Metropolitan created a number of unique experiences for its EIPs, including a dinner in London celebrating 25 years of Metropolitan, to which top clients who have shopped with the brand for the last 25 years were invited.

Speaker #3: And to her art, the new runway collections, Metropolitan hosted EIP dinners for its customers in all four fashion week cities: New York, London, Milan, and Paris.

Speaker #3: Mr. Porter hosted dinners in both New York and Hong Kong for high-profile EIP customers. It also invited guests to a dinner in London to celebrate its collaboration and exclusive capsule with Drake.

Speaker #3: In attendance were press influencers and EIP. A share of the proceeds from the capsule collection was donated to the Mr. Porter charity, Health and Mind, which runs in partnership with Movember, supporting men's mental health.

Speaker #3: This story and capsule collection had the highest click-through rate from the homepage to product seen this quarter. Already, we can see that the new leadership team at Metropolitan and Mr. Porter is driving the creation of much healthier and resilient business models to regain financial strength and growth.

Speaker #3: Martin will later comment on the progress achieved in improving the profitability of the Metropolitan and Mr. Porter luxury segment. Lastly, let me comment on Yuke's standalone performance in Q1 of fiscal year 2026.

Speaker #3: We are pleased with the progress that we have achieved in separating the Yuke's business from the luxury of Y&M. The sale of the outlet assets will allow us to accelerate the process of separation further.

Speaker #3: To create a lean business model that is compatible with a lower margin and lower average order value, off-price business, we are focusing the Yuke's business on the healthy core in terms of geography and operational fulfillment models.

Speaker #3: The closure of the marketplace business, warehouses in Dubai and Hong Kong, as well as the optimization for higher tariff rates, shipping to the United States, causes a deliberate net sales decline in the short term.

Speaker #3: But it will allow us to return to solid profitability. In Q1 fiscal year 2026, net sales declined as expected by 16.5% versus Q1 2025 for Yuke's.

Speaker #3: Europe, including Germany, increased by 1.7% in terms of net sales in Q1 fiscal year 2026 compared to Q1 fiscal year 2025. The overall net sales decline is primarily driven by a renewed focus on a healthy core for the Yuke's business.

Speaker #3: While the overall net sales decline for Yuke's, the top spending customer average spend in terms of GMV grew by 4.7% in Q1 fiscal year 26 versus Q1 fiscal year 25.

Speaker #3: The average order value over the last 12 months increased by a remarkable 17.8% to €256 for Yuke's in Q1 of fiscal year 2026. Finally, the gross profit margin improved by 400 basis points in Q1 of fiscal year 2026 for Yuke's compared to the prior year period, driven mostly by last year’s effects and also a higher share of fair price sales.

Speaker #3: All these KPIs indicate a clear focus on the healthy part of the customer base. As part of the transfer of the outlet assets to the A Group, Lux Experience will, for a certain period after closing, provide certain operational and IT services—all priced at cost level—to the buyer.

Speaker #3: Latest by the end of calendar year 26, all services and activities in relationship to the outlet will have stopped for Lux Experience. Significantly reducing the complexity in the group.

Speaker #3: And now, after having reviewed the good commercial results and improvements across all businesses, I hand over to Martin to discuss the financial results in detail.

Speaker #2: Thank you, Michael. As Michael outlined, we were able to successfully find a new home for the outlet. Just to highlight the financial implications, the outlet assets will be transferred at closing with an expected cash consideration of $30 million, depending on inventory levels at closing.

Speaker #2: Closing of the transaction is expected in the first quarter of calendar year 2026. In line with IFS requirements, we will report the outlet already in this Q1 of fiscal year 2026 as discontinued operations, as it is no longer considered part of our core financial performance.

Speaker #2: The off-price business is now fully focused on Yuke's, and we have adjusted our reporting accordingly. Therefore, with our fiscal Q1 reporting running from July to September 25, we will report quarterly results along our three business segments: luxury resale, Luxury Metropolitan and Mr. Porter, and the off-price business of Yuke's.

Speaker #2: And highlight specific developments that influenced each segment's performance. Following that, I will review the consolidated financial results for Lux Experience at the group level and give an update on guidance.

Speaker #2: Now excluding the outlet. Unless otherwise stated, all numbers refer to euros. Let's first review the performance of our resale business. During the first quarter of fiscal year 2026, GMV grew by 13.5% to €245.9 million, compared to the prior year period.

Speaker #2: Net sales also grew double-digit to $226.3 million, representing a 12.2% increase. We continue to take share in an overall soft market. In Q1 of fiscal year 2026, Might Resell's gross profit margin increased by 70 basis points to 44.6%, compared to 43.9% in the prior year period.

Speaker #2: The main driver was our continuous effort to increase the full-price share. In Q1 of fiscal year 2026, the shipping and payment cost ratio increased by 110 basis points to 14.6%, as compared to 13.5% in the prior year's quarter.

Speaker #2: The increase is mainly due to the new U.S. tariff situation. As we pay all duties for our U.S. customers, the cost increase for us is reflected in our shipping and payment cost ratio.

Speaker #2: If you excluded the duties cost, the shipping and payment cost ratio in relation to GMV decreased by 90 basis points from 8.8% to 7.9% in Q1 fiscal year 26.

Speaker #2: Main drivers of this improved cost ratio were higher AOVs and lower negotiated shipping fees, based on increasing group volumes. With these measures, we limited the effect of increased U.S. customs duties in the quarter to 110 basis points.

Speaker #2: Increase in our shipping and payment cost ratio. And mostly compensated the increase with the above-mentioned 70 basis points increase in our gross profit margin.

Speaker #2: The net effect of U.S. customs and the combined view of the increased shipping and payment cost ratio, along with the increasing gross profit margin, was therefore mostly compensated, and overall not significant.

Speaker #2: In Q1 of fiscal year 26, the marketing cost ratio decreased by 110 basis points to 10.4%. We are successfully capturing market share. But our mindful of the overall soft market situation.

Speaker #2: As targeted, we will increase marketing spend throughout the remaining fiscal year if deemed effective. Also, the Selling, General and Administrative (SG&A) cost ratio decreased by 110 basis points to 12.9%, compared to the prior year quarter.

Speaker #2: SG&A expenses increased by 4.7% compared to the previous year's quarter, and the cost ratio benefited from the strong top-line increase. Subsequently, the adjusted EBITDA margin expanded by 210 basis points during the quarter to 3.5%, compared to 1.4% in the prior year period.

Speaker #2: Adjusted EBITDA grew by 5 million to 7.9 million in Q1 of fiscal year 26. Q1 profitability in the previous year was very low, and given the cost developments just mentioned, we expect profitability levels at might resell in the remaining quarters in this fiscal year 26 transition year to be at previous year profitability levels.

Speaker #2: Inventory levels at MyT Resell are up 4% compared to the previous year, despite double-digit growth. Let me now comment on the luxury Metropolitan and Mr. Porter segments in more detail.

Speaker #2: In the first quarter of our fiscal year 2026, GMV and net sales decreased by 10.8% to $224.5 million and $212.3 million, respectively. The anticipated top-line decrease was fully in line with our expectations and was due to lower merchandise order volumes compared to the previous year.

Speaker #2: The new leadership is working on adjusting upcoming season's buying volumes and aligning subsequent marketing strategy to reembark on top-line growth again. We expect to see first signs on GMV growth in the second half of this fiscal year.

Speaker #2: The gross profit margin in Q1 increased by 130 basis points from 46.5% to 47.8%, with the increase influenced by higher share of full price sales and one-time effects in the previous year.

Speaker #2: More focus of our transformation plan is to bring down the SG&A cost ratio. SG&A expenses in Q1 of fiscal year 2026 decreased by $4.2 million, or 6.8%, compared to the last quarter.

Speaker #2: Which was Q4 of fiscal year 25, running from April to June 25. Compared to the first quarter of previous year, SG&A expenses decreased by minus 6.6 million or minus 9.7%, if you included IT development costs that were capitalized last year.

Speaker #2: As this is the first quarter of fiscal year 2026, we will see more significant effects throughout fiscal year 2026 and fiscal year 2027. With the top-line decrease of -10.8% in GMV in the quarter, the SG&A cost ratio increased marginally by 30 basis points compared to the previous year quarter, including capitalized IT development costs in the previous year quarter.

Speaker #2: Overall, the SG&A cost ratio in the quarter is at 27.6% of GMV compared to 12.9% at Might Resell. We will continue to bring down this more than 1,000 basis points difference by adjusting the operating model and the IT re-platforming, corporate overhead cost savings, and reembarking on top-line growth.

Speaker #2: Given the top-line decrease of minus 10.8% GMV in the quarter, $9.3 million less gross profit was generated. With the other cost lines in line with our expectations, the adjusted EBITDA margin in the quarter was at a negative 6.9%, below the adjusted EBITDA level at Myt Resell.

Speaker #2: The new leadership teams at Metropolitan and Mr. Porter are in the middle of refining and investing in our buying and marketing efforts to set Metropolitan and Mr. Porter on a growth trajectory again, while focusing on profitability.

Speaker #2: With the execution of our transformation plan and bringing down the SG&A cost ratio, we expect the NAP Mr. P segment to achieve comparable profitability levels to the might resell segment, with a targeted adjusted EBITDA margin of 7 to 9% medium term.

Speaker #2: We expect NAP Mr. P to break even on adjusted EBITDA margin level already in fiscal year 2027. Inventory levels at NAP Mr. P are down 8.8% compared to the previous year, with a healthy old season share at targeted levels and in line with the situation at Might Resell.

Speaker #2: Let me now review the financial performance of the off-price business of Yukes. Continuing the path of a more comprehensive restructuring effort at Yukes and with focus on profitable customer cohorts, GMV and net sales in Q1 of fiscal year 26 declined by 19.3% and 16.5%, respectively, to 118.6 million GMV and net sales in the quarter, also driven by the deliberate shutdown of the unprofitable Yukes marketplace which had a GMV of 4.6 million in Q1 fiscal year 25.

Speaker #2: Yukes gross profit margin increased by 400 basis points from 32.6% in the prior year period to 36.5%, mostly driven by previous year destocking initiatives.

Speaker #2: More focus of our transformation plan is to bring down the SG&A cost ratio at Yukes. At Yukes, SG&A expenses in Q1 of fiscal year 2026 decreased by $6.2 million, or 15.5%, versus Q1 of the previous year, if you included all the IT development costs in the previous year on a standalone basis.

Speaker #2: With the carve-out of the outlet from off-price and reporting it as discontinued operations, we excluded all P&L effects that were directly attributed to the outlet and will fall away subsequently.

Speaker #2: Certain cost elements in corporate and tech will not fall away with the sale of the outlet and, therefore, increased the cost share for Yukes and the group.

Speaker #2: With reporting the outlet as a discontinued operations, 3.6 million SG&A expenses from the outlet were allocated to Yukes, already in this quarter. The outlet at net sales of 41 million in Q1 of fiscal year 26.

Speaker #2: At Yukes, the SG&A cost ratio was at 28.6% of GMV. We will continue to bring down the SG&A cost ratio with significantly simplifying the operating model subsequent IT downsizing corporate overhead cost savings and reembarking on top-line growth.

Speaker #2: During the first quarter of fiscal year 2026, the adjusted EBITDA margin was at -18.1%, in line with expectations in our transformation plan. With the execution of our defined transformation measures, we expect to return to adjusted EBITDA profitability of Yukes in 15 to 21 months and to return to top-line growth already in fiscal year 2027.

Speaker #2: Inventory levels at Yukes are minus 13% to previous year in line with our targeted inventory strategy at Yukes. Now that we have reviewed the performance of our individual segments, let's take a look at how these results translate into our group level financials for Lux Experience.

Speaker #2: In Q1 fiscal year 26, group GMV amounted to 588.9 million while group net sales were at 557.2 million. GMV and net sales declined by minus 4.3% and minus 4.2%, respectively, as compared to illustrative levels in Q1 fiscal year 25, excluding the outlet.

Speaker #2: Adjusted EBITDA on a group level stood at minus €28.1 million, with an adjusted EBITDA margin of minus 5%. The top and bottom line of the LuxExperience group are at expected levels for Q1 of fiscal year 2026, excluding the outlet.

Speaker #2: At the end of Q1 fiscal year 2026, and excluding the inventory of the outlet, group inventory stood at $1.018 billion. Operating cash flow of the LuxExperience group was at minus $146.4 million, driven by phasing, seasonal, and one-time effects.

Speaker #2: Excluding the one-time effects, we had around minus $40 million in negative operating cash flow. One-time effects relate to restructuring expenses, phasing of accounts payables, and customs drawback receivables.

Speaker #2: Negative cash flow in the first quarter is typical due to seasonal inventory buildup. For the full fiscal year 2026, we expect operating cash burn to stay well below $200 million, given fiscal year 2026 as the key transition year for our transformation plan.

Speaker #2: We are executing our transformation plan on a fully funded basis with total cash outflow during all years of the transformation plan to range between 350 and 450 million.

Speaker #2: We expect to break even on an operating cash level in 2 to 2 and a half years. The group ended the fiscal year with a cash position of around 460 million and additional access to revolving credit facilities of 200 million.

Speaker #2: Of which $42.2 million were utilized by the end of Q1 fiscal year 2026. Lux Experience has a strong balance sheet with $1.7 billion of current assets, mostly in inventories and cash, almost no bank debt, and an equity ratio of 60%.

Speaker #2: The integration of the YNF finance teams and formation of all Lux Experience group structures has started early in our progress and is going very well. Key activities included a new group-wide organization and governance setup, an integrated finance consolidation and IFS 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.

Speaker #2: The statutory and group audits for fiscal year 2025 under strict DCAOB guidelines were successful, and we filed our 20FS plan on October 30, 2025.

Speaker #2: We are in an ideal position to execute our transformation plan to deliver sustainable growth and profitability, supported by our strategic initiatives across our segments.

Speaker #2: 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 Matapatei, Mr. Porter, and Yukes have begun their work, and at the group level, we are in the midst of implementing the measures of our transformation plan.

Speaker #2: Given our agreement to sell the assets powering the outlet, we would like to provide updated guidance for fiscal year 2026 that reflects the new structure of our Lux Experience group.

Speaker #2: The new guidance takes into consideration the anticipated financial impact of the transaction and reconfirms our guidance for the other business and segments. We remain committed on the full execution of the transformation plan, which includes operational adjustments, technology platform integration, and organizational alignment.

Speaker #2: As communicated fiscal year 26 will be our key transition year. For fiscal year 26, we expect Lux Experience GMV at around 2.4 to 2.7 billion and an adjusted EBITDA margin between minus 2 and plus 1%.

Speaker #2: We expect MyTeresa to grow mid to high single digits in the full fiscal year. Matapatei, Mr. Porter will show growth in the second half of the fiscal year but a decline by low single digits for the full fiscal year.

Speaker #2: Yukes will continue to adjust the revenue base downwards but at a lower extent in the second half of the fiscal year. Our medium-term targets remain unchanged.

Speaker #2: That adjusted EBITDA profitability at 7 to 9% and to return to 10 to 15% annual growth rates. And with this, I hand over to Michael for his concluding remarks.

Speaker #2: Thank you, Martin. We are very pleased with our first quarter of fiscal year '26 earnings results. The outstanding performance of MyTeresa demonstrates our proven ability to drive profitable growth in digital luxury, and the clear signs of the commercial turnaround at Matapatei and Mr. Porter show that we are fully on track with our transformation plan.

Speaker #2: With the agreement to sell the assets of the outlet, we have also found a tailored solution that allows us to accelerate the transformation at Yukes.

Speaker #2: Lux Experience is in the perfect position to benefit from the continued growth of digital luxury and the ongoing consolidation in the sector. We expect to become the one and only destination for luxury enthusiasts worldwide. 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 the line for your...

Speaker #3: Thank you. 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.

Speaker #3: 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 while we compile the Q&A roster.

Speaker #3: Your first question comes from the line of Blake Anderson with Jeffries. Your line is open. Please go

Speaker #3: ahead. Hi, guys.

Speaker #4: Thanks for taking my question. So wanted to ask on the acquisition. Looks like it's been almost seven months now since you closed it. There are lots of moving pieces.

Speaker #4: I wanted to ask, what are the strongest signs that you think your plan is working so far and that it's on track? And what would be any areas, if any, that have surprised you?

Speaker #2: Thank you, Blake. Indeed, we closed in April, so a few months into the overall work. We are well on track as explained in our call.

Speaker #2: If you look at some of the quality KPIs of margin, of AOV, of spend per top customer, we are well on track. And for the luxury Matapatei and Mr. Porter, we believe and expect positive growth already next year in 26 calendar.

Speaker #2: So, really good developments. We are very happy that we were able to bring in new leadership teams so quickly at Matapatei, at Mr. Porter, and also at Yukes.

Speaker #2: The signed agreement to sell the assets of the outlet was a significant milestone. We have announced workforce reductions in multiple locations, so it's all well on track.

Speaker #2: And Martin explained that we already see the results of very early SG&A reductions. I mean, a lot of the activities that we are doing have, of course, lags before they can really take effect in the P&L.

Speaker #2: So we are very happy. We are not surprised. We knew what was not working. We knew what was working because we did a very extensive due diligence.

Speaker #2: And now, of course, in a quite unique position of truly understanding the business model, of Matapatei and Mr. Porter and also a very close to the off-season luxury business.

Speaker #2: So it looks very, very good. We explained in May that this is a multi-year exercise with continuous improvement. This is not front-loaded, back-end-loaded. We will continue to show quarter-by-quarter improvements.

Speaker #2: And this was only the first.

Speaker #4: Makes sense. Still very early. So wanted to ask on the guidance. It sounds like there weren't really any changes there aside from the outlet sale.

Speaker #4: I just wanted to confirm that. And then see if there was any—was any color you could provide on a quarterly basis, kind of by segment there?

Speaker #4: And I think you said the MyTeresa segment was maybe mid to high single-digit GMV growth. Which would, I think, imply slowdowns. Any more color on that segment as well, which has been really strong for you?

Speaker #2: No, you're completely right, Blake. So there's a reconfirmation of the perspective and the guidance for the two segments: MyTeresa and Matapatei, and Mr. Porter.

Speaker #2: And it is obviously an adjustment needed if we take out the outlet and report it as discontinued operations. That is around $212 million of net sales for the full year that we expected.

Speaker #2: And therefore, we had to adjust that. You see that also we narrowed the range on top and bottom line. I mean, we had on bottom line, minus 4% to plus 1%.

Speaker #2: And now we've narrowed it down. So, I think a key success factor is to really start early and push the transformation plan.

Speaker #2: We are well on track to see the good movements. So, yeah, reconfirmation of the guidance, adjusting it for the outlet effect. On the MyTheresa guidance, mid to high single digits—I mean, there's no specific callout.

Speaker #2: I mean, as we are seeing very strong support and great signs of growth throughout. Both luxury segments. But obviously, we want to be mindful in the overall situation of the market.

Speaker #2: I mean, it is always tough to predict. And therefore, it is a—this is in line with what we expect today. In line with an overall soft

Speaker #2: market. Got it.

Speaker #4: Thanks so much. I'll hop back in the

Speaker #3: Your next question comes from the line of Oliver Chen with TD Cohen. Your line is open. Please go ahead. You may need to press *6 to unmute.

Speaker #2: Hey, Oliver, you still seem to be on mute.

Speaker #3: There appears to be no audio from Oliver Chen's line. We will move to the next question. The next question is from Cedric Norris with Morgan Stanley.

Speaker #3: Your line is open. Please go ahead.

Speaker #5: Hi, Michael. And Martin, thank you very much for taking my question. So I have two, if that's okay. First, there is this idea that fashion trends follow a pendulum swinging from maximalism and colorful style to more quiet luxury ones.

Speaker #5: The latest trends are more favorable compared to the recent past. We recently observed waves of fashion designers making their debut in some of the largest luxury houses.

Speaker #5: So, having in mind that fashion trends are hard to predict, could you perhaps elaborate on what you have seen in terms of consumer appetite for bolder looks and the overall interest in the luxury category?

Speaker #5: Have these recent creative director changes generated more interest? And if yes, for which brands? Secondly, if you could share what you saw in terms of performance by category, that would be helpful.

Speaker #5: Thank

Speaker #5: you. Happy

Speaker #2: write. We have come out of a fashion week to do so, Cedric. So we have to cycle with lots of new designers. And at a very high level, because each brand has its own story, there was a bit of movement to more bolder, more colorful femininity across many, many brands.

Speaker #2: We clearly see more buzz. We clearly see more interest. Most of these collections have not dropped yet. So this is really February, March, April where we will see how the appetite for consumers are by different maisons.

Speaker #2: But we have clearly seen a sort of joint idea among many creative directors to move into a new swing, moving out of quiet luxury.

Speaker #2: But I always insist that the drivers of quiet luxury

Speaker #1: No side of fashion that hopefully will excite customers as we move into February , March , April , lot of when a these and shows collections will become available .

Speaker #1: In terms of what is driving the growth , this is of course , very much the story of of of my Theresa , the story of Net-A-Porter and Mr. Porter .

Speaker #1: clothing . It's Its ready to wear . This is where we see the nicest momentum . This is driven a by very diverse our lifestyle of clients .

Speaker #1: Vacation remains a big theme, but for both summer and winter. And then there's one additional category that we always call, which is the outstanding success of fine jewelry.

Speaker #1: Now , also on digital , it's probably one of the later categories that have moved , and we see good traction both on , on , on , on Net-A-Porter and on my Theresa for fine jewelry in the neighborhood of 2050 K pieces .

Speaker #1: So we are gradually moving up into very nice price points. Of course, not auxiliary, but real luxury products.

Speaker #2: Thank you .

Speaker #3: Kind reminder if you would like to ask a question , please use the raise Hand feature at the bottom of your screen . If you have dialed in to today's call , please press star nine to raise your hand and star six to unmute .

Speaker #3: Your next question comes from the line of Oliver Chen from TD Cohen. Mr. Chen, please press star six to unmute. Star six to unmute.

Speaker #4: Hi, Michael. Hi, Martin. Hopefully, you can hear me now.

Speaker #1: It works . Now .

Speaker #4: Perfect . Thank you . Hi , this is Nicholas Sylvia on for Oliver Chen . taking the both for Thank you time . I do believe some of my questions were answered already , but I did want to ask a little bit more on guidance .

Speaker #4: I know you mentioned that EBITDA margin seems to have adjusted a tiny bit on the lower end. If I'm not mistaken, I was just wondering if you could provide any additional color on what you think the primary drivers are there.

Speaker #4: there If are any besides the sale of of Outnet . And my second question is if you could just speak a little bit more on what you were seeing regionally .

Speaker #4: Thank you .

Speaker #5: Maybe I'll take Yeah . the the first question on the guidance . I know we we adjusted upwards . So we had my adjusted EBITDA margin for the group minus 4% to plus 1% .

Speaker #5: Previously . And therefore now guide towards minus two plus 1% . So if you take the midpoints it's it's an improvement . Obviously the the as Michael outlined it is the transformation plan that we are embarking on from a group level .

Speaker #5: And in addition , the work of the , you know , new leadership teams at the brands , we are all , you know , working on improving the profitability from the business side , from the back end side and , and also then , you know , focusing on , on re-embarking , on growth .

Speaker #5: But for us , we outlined that in the in multiple last calls , the ratio cost is really the key element of improving the profitability .

Speaker #5: And it is noteworthy quite that already in Q1 . So July , August , September , just a couple of months after after closing , we were able to decrease SG&A costs by by -15 million .

Speaker #5: If you combine the two segments of the quarter . In comparison to the prior year quarter , so we are obviously front a loading of a lot lot of pain , a lot of adjustments that we that we need to do and we will continue to do so .

Speaker #5: So this is the , the the core element . And I also , you know , guided on growth , especially in that Mr. Porter , already in the second half of this fiscal year to to show growth .

Speaker #5: And this will obviously also help and help on the on on a ratio logic that from a lower expense base to then have obviously profitability improvement on the whole group .

Speaker #5: Re-embarking on the on the growth trajectory , again , and it always helps , you know , to be the number one worldwide to , to to really push also on the on the growth side .

Speaker #1: Yeah . And let me talk about geography . We continue to see very good traction in the US . We highlighted in our script that it is actually the fastest accelerating geography .

Speaker #1: Europe excluding Germany , very stable growth rates . So we are across all the segments happy with with with that these two geographies on the UK side , as we said , we are really focusing on the healthy core , which is Europe .

Speaker #1: So we we intentionally drive business in Europe , Asia has stabilized , obviously at a low level . So we're really looking forward to growth continued in the short in the term US and Europe .

Speaker #1: There may be upside opportunity now in China, but it's probably still early to say. I just want to highlight that, as a group, 31% of our business is now in the United States.

Speaker #1: So, we feel very good about our U.S. business and our scale in the U.S. now.

Speaker #3: Appears to be no further questions at this time. This does conclude today's call. Thank you for attending. You may now disconnect.