Q2 2026 Mavi Giyim Sanayi ve Ticaret AS Earnings Call

September 17, 2026

Moderator: Q2 2026 earnings webcast. Our CEO, Cüneyt Yavuz, will present the Q2 and H1 results, followed by a Q&A session. Please note that this webcast is being recorded. We kindly ask you to review the disclaimer and take into consideration the forward-looking statements included in the presentation accordingly. Please keep your microphones muted throughout the presentation. I will now leave the floor to Cüneyt Yavuz.

Duygu İnceöz: -Q2 2026 earnings webcast. Our CEO, Cüneyt Yavuz, will present the Q2 and H1 results, followed by a Q&A session. Please note that this webcast is being recorded. We kindly ask you to review the disclaimer and take into consideration the forward-looking statements included in the presentation accordingly. Please keep your microphones muted throughout the presentation. I will now leave the floor to Cüneyt Yavuz.

Speaker #1: Through 2026 earnings net cap. Our CEO, Junaid Deluz, will present the second quarter and first half results. Followed by a Q&A session. Please note that this webcast is being recorded.

Speaker #1: At this time, we ask you to review the disclaimer and take into consideration the forward-looking statements included in the presentation accordingly. Please keep your microphones muted throughout the presentation.

Speaker #1: I will now leave the floor to Junaid Deluz.

Speaker #2: Thank you, Duygu. Hello, and thank you all for joining us in this webcast regarding the financial results of Q2 2026. I would like to start with an overview of the trading environment and our performance in the quarter.

Cüneyt Yavuz: Thank you, Duygu. Hello. Thank you all for joining us in this webcast regarding the financial results of Q2 2026. I would like to start with an overview of the trading environment and our performance in the quarter. The operating environment remains challenging, particularly in Türkiye. Persistent high inflation continues to weigh on purchasing power and consumer demand, while competition across the apparel market is ongoing. Against this backdrop, we remain focused on the areas within our control and continue our execution with discipline and confidence. Our right product, right price, and premium quality strategy, supported by our flexible supply chain and effective planning, continues to deliver good results. Strong brand execution, continuous customer engagement, and dynamic product and price positioning has supported further improvement in our gross margin.

Speaker #2: The operating environment remains challenging, particularly in Turkey. Persistent high inflation continues to weigh on purchasing power and consumer demand, while competition across the apparel market is ongoing.

Speaker #2: Against this backdrop, we remain focused on the areas within our control and continue our execution with discipline and confidence. Our right product, right price, and premium quality strategy supported by our flexible supply chain and effective planning continues to deliver good results.

Speaker #2: Strong brand execution continues to drive customer engagement and dynamic product and price positioning, which has further supported improvement in our gross margin. At the same time, disciplined inventory and working capital management enabled us to generate more than TRY 2 billion in operational cash flow, preserving our robust balance sheet and financial flexibility.

Cüneyt Yavuz: At the same time, disciplined inventory and working capital management enabled us to generate more than TRY 2 billion in operational cash flow, preserving our robust balance sheet and financial flexibility. Profit before tax more than doubled year on year, increasing by 117%. Turning to Türkiye, our strong market positioning and continued investment in the brand supported volume performance in a softer consumer demand environment. Total retail sales volumes increased by 7.3% year on year. The online channel in Türkiye remains highly competitive, with elevated promotional activity, particularly on marketplace platforms. While this puts pressure on online revenue growth figures, sales volumes are holding strong, with 8% year on year growth in the quarter. Our international operations, driven by US retail growth, also maintain positive momentum, with sales increasing by 3% in constant currency. In the quarter, the United States delivered 24% year on year revenue growth.

Cüneyt Yavuz: At the same time, disciplined inventory and working capital management enabled us to generate more than TRY 2 billion in operational cash flow, preserving our robust balance sheet and financial flexibility. Profit before tax more than doubled year-on-year, increasing by 117%. Turning to Türkiye, our strong market positioning and continued investment in the brand supported volume performance in a softer consumer demand environment. Total retail sales volumes increased by 7.3% year-on-year. The online channel in Türkiye remains highly competitive, with elevated promotional activity, particularly on marketplace platforms. While this puts pressure on online revenue growth figures, sales volumes are holding strong, with 8% year-on-year growth in the quarter. Our international operations, driven by US retail growth, also maintain positive momentum, with sales increasing by 3% in constant currency. In the quarter, the United States delivered 24% year-on-year revenue growth.

Speaker #2: Profit before tax more than doubled year-on-year, increasing by 117%. Turning to Turkey, our strong market positioning and continued investment in the brand supported volume performance in a softer consumer demand environment.

Speaker #2: Total retail sales volumes increased by 7.3% year on year. The online channel in Turkey remains highly competitive, with elevated promotional activity, particularly on marketplace platforms.

Speaker #2: While this puts pressure on online revenue growth figures, sales volumes are holding strong, with 8% year-on-year growth in the quarter. Our international operations, driven by the U.S.,

Speaker #2: retail growth, also maintain positive momentum, with sales increasing by 3% in constant currency. In the quarter, the United States delivered 24% year-on-year revenue growth.

Speaker #2: This year marks Mavi's 35th anniversary, an important milestone for a brand that has grown from Turkey into an international lifestyle brand while staying true to its denim roots.

Cüneyt Yavuz: This year marks Mavi's 35th anniversary, an important milestone for a brand that has grown from Türkiye into an international lifestyle brand while staying true to its denim roots. We lead the Turkish jeans market, rank among the top three brands in overall apparel market, and remain the destination for casual wear. Our focus on denim innovation and fit variety further strengthens Mavi's top of mind leader position in jeans. Always looking ahead, we continue to invest behind this brand strength. We maintain an always-on communication with our customers and have further elevated our marketing and brand investments this year. Together with our strong standing brand ambassadors, Kıvanç Tatlıtuğ and Serenay Sarıkaya, we continue to strengthen Mavi's premium brand image and communicate the stories behind our iconic jeans and brand identity. We are also deepening our connection with younger generations.

Speaker #2: We beat the Turkish jeans market, ranked among the top 3 brands in overall apparel market, and remain the destination for casual wear. Our focus on denim innovation and fit variety further strengthens Mavi's top-of-mind leader position in jeans.

Speaker #2: Always looking ahead, we continue to invest behind this brand's strength. We maintain an always-on communication, with our customers and further elevated our marketing and brand investments this year.

Speaker #2: Together with our strong-standing brand ambassadors, Kıvanç Tatlıtuğ and Serenay Sarıkaya, we continue to strengthen Mavi's premium brand image, and communicate the stories behind our iconic jeans and brand identity.

Speaker #2: We are also deepening our connection with younger generations. This year, Zeynep Sönmez and Kenan Yıldız joined the Mavi team of celebrities. Both are exceptionally young athletes who represent the energy, ambition, and authenticity we associate with Mavi and are inspiring role models for the next generation.

Cüneyt Yavuz: This year, Zeynep Sönmez and Kenan Yıldız joined the Mavi team of celebrities. Both are exceptional young athletes who represent the energy, ambition, and authenticity we associate with Mavi and are inspiring role models for the next generation. Finally, our commitment to long-term value creation continues to gain recognition both in Türkiye and internationally. In the H1, Mavi was named a most honored company in the Extel EMEA survey for the third consecutive year. We ranked fourth among 400 companies in Forbes Türkiye's best employer survey, and became the first and only apparel brand from Türkiye to be included in the S&P Global Sustainability Yearbook 2026. We were also included in the FTSE4Good Index Series in recognition of our environmental, social, and governance platforms.

Speaker #2: Finally, our commitment to long-term value creation continues to gain recognition both in Turkey and internationally. In the first half, Mavi was named a Most Honored Company in the EXTEL EMEA survey, for the third consecutive year.

Speaker #2: We ranked fourth among 400 companies in Forbes Turkey's Best Employees survey, and became the first and only apparel brand from Turkey to be included in the S&P Global Sustainability Yearbook 2026.

Speaker #2: We were also included in the FTSE4Good Index series, gaining recognition for our environmental, social, and governance platforms. These recognitions reflect the strength of Mavi not only in terms of financial and operational performance, but also as a brand, an employer, and a responsible company.

Cüneyt Yavuz: These recognitions reflect the strength of Mavi, not only in terms of financial and operational performance, but also as a brand, an employer, and a responsible company. Overall, I believe our H1 performance demonstrates the resilience of our business in a challenging operational environment. We continue to improve gross margin, generate cash, and maintain a strong balance sheet while investing in our brand, our customers, and the capabilities that will support Mavi's long-term growth. With this introduction, let's quickly review our results for the H1 2026. Consolidated revenue declined 1.1% year on year and realized at TRY 25 billion 832 million. Türkiye retail sales was flat while Türkiye online sales declined by 2.9% in the H1 of 2026. Our EBITDA for the period is TRY 4 billion 679 million, resulting in 18.1% EBITDA margin.

Cüneyt Yavuz: These recognitions reflect the strength of Mavi, not only in terms of financial and operational performance, but also as a brand, an employer, and a responsible company. Overall, I believe our H1 performance demonstrates the resilience of our business in a challenging operational environment. We continue to improve gross margin, generate cash, and maintain a strong balance sheet while investing in our brand, our customers, and the capabilities that will support Mavi's long-term growth. With this introduction, let's quickly review our results for the H1 2026. Consolidated revenue declined 1.1% year-on-year and realized at TRY 25 billion 832 million. Türkiye retail sales was flat while Türkiye online sales declined by 2.9% in the H1 of 2026. Our EBITDA for the period is TRY 4 billion 679 million, resulting in 18.1% EBITDA margin.

Speaker #2: Overall, I believe our first-half performance demonstrates the resilience of our business in a challenging operational environment. We continue to improve gross margin, generate cash, and maintain a strong balance sheet while investing in our brand, our customers, and the capable teams that will support Mavi's long-term growth.

Speaker #2: With this introduction, let's quickly review our results for the first half of 2026. Consolidated revenue declined 1.1% year over year and reached 25,832 million Turkish liras.

Speaker #2: Turkey retail sales were flat, while Turkey online sales declined by 2.9% in the first half of 2026. Our EBITDA for the period is 4 billion 679 million Turkish liras, resulting in an 18.1% EBITDA margin.

Speaker #2: We recorded TRY 807 million in net income in the first half of the year. With 682,000 new customer acquisitions in the first six months of 2026, the number of active loyalty card members now stands at 6.2 million.

Cüneyt Yavuz: We recorded TRY 807 million net income in the H1 of the year. With 682,000 new customer acquisitions in the first six months of 2026, the number of active loyalty card members now stands at 6.2 million. Moving on to review our channel performance on slide seven. Despite all the challenging conditions weighing on consumer demand, total Türkiye sales grew 0.4% in the Q2, resulting in a 0.5% contraction in the H1. Within that, retail sales performance was most resilient, staying flat year on year, while wholesale contracted 1.5% and eCom contracted 2.9%. Total international revenue, constituting 9% of total consolidated sales, was down 7.4% year on year in inflation-adjusted Turkish lira terms, but grew 1.4% in constant currency in the H1 of 2026. The US business recorded 18% growth in US dollar terms in the H1 of 2026.

Cüneyt Yavuz: We recorded TRY 807 million net income in the H1 of the year. With 682,000 new customer acquisitions in the first six months of 2026, the number of active loyalty card members now stands at 6.2 million. Moving on to review our channel performance on slide seven. Despite all the challenging conditions weighing on consumer demand, total Türkiye sales grew 0.4% in the Q2, resulting in a 0.5% contraction in the H1. Within that, retail sales performance was most resilient, staying flat year-on-year, while wholesale contracted 1.5% and eCom contracted 2.9%. Total international revenue, constituting 9% of total consolidated sales, was down 7.4% year-on-year in inflation-adjusted Turkish lira terms, but grew 1.4% in constant currency in the H1 of 2026. The US business recorded 18% growth in US dollar terms in the H1 of 2026.

Speaker #2: Moving on to review our channel performance on slide 7, despite all the challenging conditions weighing on consumer demand, total Turkey sales grew 0.4% in the second quarter, resulting in a 0.5% contraction in the first half.

Speaker #2: Within that, retail sales performance was most resilient, staying flat year on year, while wholesale contracted 1.5% and e-commerce contracted 2.9%. Total international revenue, constituting 9% of total consolidated sales, was down 7.4% year on year in inflation-adjusted Turkish lira terms, but grew 1.4% in constant currency in the first half of 2026.

Speaker #2: The U.S. business recorded 18% growth in U.S. dollar terms in the first half of 2026. Looking into our Turkey retail business in more detail, we remain committed to strengthening our physical presence in Turkey through disciplined, return-focused investments.

Cüneyt Yavuz: Looking into our Türkiye retail business in more detail, we remain committed to strengthening our physical presence in Türkiye through disciplined return-focused investments. New stores opened over the past two years are delivering positive contributions, while expansions and renovations are driving improvements across key store KPIs and enhancing the overall customer experience. Our retail development plans for 2026 are ambitious, with a significant part of the pipeline scheduled for the H2 of the year. As of the end of July, we are on track with our four new store openings, four closures, seven expansions, and 14 store upgrades. To bring you fully up to date, as of today, we have completed seven new store openings, five closures, seven expansions, and 19 renovations and upgrades, demonstrating the strong pace of execution since quarter end. Let's briefly elaborate on the like-for-like store performance on the next page.

Speaker #2: New stores opened over the past two years are delivering positive contributions, while expansions and renovations are driving improvements across key store KPIs and enhancing the overall customer experience.

Speaker #2: Our retail development plans for 2026 are ambitious, with a significant part of the pipeline scheduled for the second half of the year. As of the end of July, we are on track with our 4 new store openings, 4 closures, 7 expansions, and 14 store upgrades.

Speaker #2: To bring you fully up to date, as of today, we have completed 7 new store openings, 5 closures, 7 expansions, and 19 renovations and upgrades, demonstrating the strong pace of execution since quarter after.

Speaker #2: Let's briefly elaborate on the like-for-like store performance on the next page. In the second quarter, like-for-like sales increased by 31.3% in nominal terms, corresponding to a 0.6% decline in real Turkish lira terms.

Cüneyt Yavuz: In the second quarter, like-for-like sales increased by 31.3% in nominal terms, corresponding to a 0.6% decline in real Turkish lira terms. Our category mix and pricing strategy supported gross profitability while preserving market share. The underlying like-for-like dynamics reflect this approach, with the average basket down 3.9%, offset by a 3.5% increase in the number of transactions. Importantly, like-for-like sales volumes increased by 5.8% in Q2, bringing H1 volume growth to 2.5%. Including the contribution from new square meters, total Türkiye retail volumes grew by 7.3% in the quarter and 4% in the H1. Now let's move on to slide 11 to review category-based developments in Türkiye retail. In the second quarter, we recorded volume growth across all categories. The variation we see in the H1 category performance, therefore, largely reflects the dynamics of the first quarter.

Speaker #2: Our category mix and pricing strategy supported gross profitability, while preserving market share. The underlying like-for-like dynamics reflect this approach, with the average basket down 3.9%, offset by a 3.5% increase in the number of transactions.

Speaker #2: Importantly, like-for-like sales volumes increased by 5.8% in Q2, bringing first-half volume growth to 2.5%. Including the contribution from new square meters, total Turkey retail volumes grew by 7.3% in the quarter and 4% in the first half.

Speaker #2: Now, let's move on to slide 11 to review category-based developments in Turkey retail. In the second quarter, we recorded volume growth across all categories.

Speaker #2: The variation we see in the first-half category performance, therefore, largely reflects the dynamics of the first quarter. Then, it performed broadly in line with the overall business, with first-half sales down 2% year on year, mainly due to a slightly weaker performance of denim shorts and tops, while jeans remained relatively resilient.

Cüneyt Yavuz: Denim performed broadly in line with the overall business, with H1 sales down 2% year on year, mainly due to a slightly weaker performance of denim shorts and tops, while jeans remained relatively resilient. This was significantly affected by unfavorable weather conditions in the first quarter. The category recovered in Q2, posting 2.3% real growth, bringing the H1 decline to 4%. Jackets were down 8% in the H1, largely reflecting a strong comparable base. Given the seasonality of this category, full-year performance will provide a more meaningful indication of the underlying trends. Our non-denim categories maintained their positive momentum, with accessories and non-denim bottoms both growing 8% in real terms. This performance supports our category diversification strategy while contributing positively to profitability and new customer acquisition. It also demonstrates the benefits of our larger store formats, which provide greater space and visibility to showcase a broader product offering.

Cüneyt Yavuz: Denim performed broadly in line with the overall business, with H1 sales down 2% year-on-year, mainly due to a slightly weaker performance of denim shorts and tops, while jeans remained relatively resilient. This was significantly affected by unfavorable weather conditions in the first quarter. The category recovered in Q2, posting 2.3% real growth, bringing the H1 decline to 4%. Jackets were down 8% in the H1, largely reflecting a strong comparable base. Given the seasonality of this category, full-year performance will provide a more meaningful indication of the underlying trends. Our non-denim categories maintained their positive momentum, with accessories and non-denim bottoms both growing 8% in real terms. This performance supports our category diversification strategy while contributing positively to profitability and new customer acquisition. It also demonstrates the benefits of our larger store formats, which provide greater space and visibility to showcase a broader product offering.

Speaker #2: This was significantly affected by unfavorable weather conditions in the first quarter. The category recovered in Q2, posting 2.3% real growth, bringing the first-half decline to 4%.

Speaker #2: Jackets were down 8% in the first half, largely reflecting a strong comparable base. Given the seasonality of this category, we believe full-year performance will provide a more meaningful indication of the underlying trend.

Speaker #2: Our non-denim categories maintained their positive momentum, with accessories and non-denim bottoms both growing 8% in real terms. This performance supports our category diversification strategy while contributing positively to profitability and new customer acquisition.

Speaker #2: It also demonstrates the benefits of our larger store formats, which provide greater space and visibility to showcase a broader product offering. Now, let's move forward to review our online sales performance on page 13.

Cüneyt Yavuz: Now let's go forward to review our online sales performance on page 13. Global online sales, including sales generated through our wholesale partners' online channels, represented 10% of consolidated revenues in the H1 of 2026. In Türkiye, with 5.7 million active Mavi app users, mavi.com continued to outperform other online channels. Revenue declined 0.6% on mavi.com compared to a 5.5% decline on marketplace platforms. Türkiye online business accounted for 7.8% of total Türkiye sales during the H1 of the year. International online sales declined by 6.6% in inflation-adjusted real terms, primarily due to a significant contraction in the wholesale channel. International mavi.com continued to perform well, delivering 1.7% growth in real Turkish lira terms and 13% growth in constant currency. Overall, online sales represent 33.9% of total international revenues. Now let's move on to review our consolidated financial results.

Speaker #2: Global online sales, including sales generated through our wholesale partners’ online channels, represented 10% of consolidated revenues in the first half of 2026. In Turkey, with 5.7 million active Mavi Q1 users, mavi.com continued to outperform other online channels.

Speaker #2: Revenue declined 0.6% on mavi.com, compared to a 5.5% decline on marketplace platforms. The Turkey online business accounted for 7.8% of total Turkey sales during the first half of the year.

Speaker #2: International online sales declined by 6.6% in inflation-adjusted real terms, primarily due to a significant contraction in the wholesale channel. International mavi.com continued to perform well, delivering 1.7% growth in real Turkish lira terms and 13% growth in constant currency.

Speaker #2: Overall, online sales represented 33.9% of total international revenues. Now, let's move on to review our consolidated financial results. Against a backdrop of heightened global economic uncertainty and a continued challenging demand environment in Turkey, we are pleased to have improved our underlying gross margin by nearly 60 basis points in the second quarter, and by nearly 90 basis points in the first half.

Cüneyt Yavuz: Against a backdrop of heightened global economic uncertainty and a continued challenging demand environment in Türkiye, we are pleased to have improved our underlying gross margin by +60 basis points in the second quarter and +90 basis points in the H1. This performance reflects the strength of our product planning capabilities, our flexible and agile sourcing model, and the effectiveness of our pricing and category management strategies. Reported gross margin reached 53.1%, where lower interest impact was mostly offset by lower inflation accounting impact. Moving on to slide 16 to review our EBITDA performance. We generated TRY 2,065,000,000 of EBITDA in the second quarter, growing 4% year on year, while EBITDA margin also improved 70 basis points, realizing at 16.4%. The 200 basis points increase in OPEX to sales ratio was mainly offset by higher gross margin.

Cüneyt Yavuz: Against a backdrop of heightened global economic uncertainty and a continued challenging demand environment in Türkiye, we are pleased to have improved our underlying gross margin by +60 basis points in the second quarter and +90 basis points in the H1. This performance reflects the strength of our product planning capabilities, our flexible and agile sourcing model, and the effectiveness of our pricing and category management strategies. Reported gross margin reached 53.1%, where lower interest impact was mostly offset by lower inflation accounting impact. Moving on to slide 16 to review our EBITDA performance. We generated TRY 2,065,000,000 of EBITDA in the second quarter, growing 4% year-on-year, while EBITDA margin also improved 70 basis points, realizing at 16.4%. The 200 basis points increase in OPEX to sales ratio was mainly offset by higher gross margin.

Speaker #2: This performance reflects the strength of our product planning capabilities, our flexible and agile sourcing model, and the effectiveness of our pricing. Category gross margin reached 53.1%, where lower imputed interest impact was mostly offset by lower inflation accounting impact.

Speaker #2: Moving on to slide 16 to review our EBITDA performance, we generated TRY 2,065,000,000 of EBITDA in the second quarter, growing 4% year on year, while EBITDA margin also improved 70 basis points, reaching 16.4%.

Speaker #2: The 200 basis points increase in the OPEX-to-sales ratio was mainly offset by higher gross margin. Let's look into our net income margin performance. Given better operational profitability and lower financial expenses in the second quarter, our profit before tax grew 117% to 505 million Turkish liras.

Cüneyt Yavuz: Let's look into our net income margin performance. Given better operational profitability and lower financial expenses in the second quarter, our profit before tax grew 117% to TRY 505 million. As we have discussed in previous quarters, inflation accounting has a disproportionate impact on asset-light companies with strong equity positions such as Mavi. With inflation accounting no longer applied to statutory financial since the end of 2025, this impact is now reflected more prominently through the effective tax rate. in the second quarter, our effective tax rate is 53% compared to 6% in the prior year. This resulted in TRY 239 million of net income in Q2 2026, growing 9% year-on-year and corresponding to a net margin of 1.9%. Net income for the H1 of the year realized at TRY 870 million with 3.1% margin.

Speaker #2: As we have discussed in previous quarters, inflation accounting has a disproportionate impact on asset-light companies with strong equity positions, such as Mavi. With inflation accounting no longer applied to statutory financials since the end of 2025, this impact is now reflected more prominently through the effective tax rate.

Speaker #2: In the second quarter, our effective tax rate is 53%, compared to 6% in the prior year. This resulted in TRY 239 million of net income in Q2 2026, growing 9% year on year and corresponding to a net margin of 1.9%.

Speaker #2: Net income for the first half of the year was realized at 870 million Turkish liras, with a 3.1% margin. On slide 18, we will review our operational cash flow and working capital performance.

Cüneyt Yavuz: On slide 18, we will review our operational cash flow and working capital performance. We continue to efficiently manage inventory and working capital, ensuring operational agility. I'm pleased to share that our consolidated inventory levels remain at a very healthy territory, being 7% over the same period last year, and comprises mostly of fresh fall/winter season products. Having said that, I would like to highlight one point for the coming periods. As our square meter expansion strategy results in a growing number of larger store formats, the business will naturally require somewhat higher inventory levels to support the broader selling space and product offering. This is a planned evolution of our inventory needs, designed to improve product availability and support sales productivity across our expanded store network.

Speaker #2: We continue to efficiently manage inventory and working capital, ensuring operational agility. I'm pleased to share that our consolidated inventory levels remain in a very healthy territory, being 7% lower than the same period last year, and comprise mostly fresh fall/winter season products.

Speaker #2: Having said that, I would like to highlight one point for the coming period. As our square meter expansion strategy results in a growing number of larger store formats, the business will naturally require somewhat higher inventory levels to support the broader selling space and product offering.

Speaker #2: This is a planned evolution of our inventory needs, designed to improve product availability and support sales productivity across our expanded store network. Therefore, in the coming quarters, we cautiously plan to see Mavi operating with slightly higher inventory levels as these investments progressively come on stream.

Cüneyt Yavuz: Therefore, in the coming quarters, we consciously plan to see Mavi operating with slightly higher inventory levels as these investments progressively come on stream. Moving on to the next slide. In the H1 of 2026, we invested TRY 1,325,000,000 in capital expenditure, resulting in a CapEx to sales ratio of 5.1%. Turkey retail investments, including store openings, expansions, and renovations, accounted for 55% of total capital expenditures. Approximately 22% was related to investment in our US retail operations, while 11% was allocated to R&D and 8% to digital initiatives. As always, the foreign currency debt reflected in our consolidated financial statements relates exclusively to our international subsidiaries, which borrow in their respective local currencies. As a result, these borrowings do not create a material foreign exchange risk at the consolidated level.

Speaker #2: Moving on to the next slide. In the first half of 2026, we invested 1,000,325,000,000 Turkish liras in capital expenditure, resulting in a CAPEX-to-sales ratio of 5.1%.

Speaker #2: Turkey retail investments, including store openings, expansions, renovations, accounted for 55% of total capital expenditures. Approximately 22% was related to investment in our US retail operations, while 11% was allocated to R&D and 8% to digital initiatives.

Speaker #2: As always, the foreign currency debt reflected in our consolidated financial statements relates exclusively to our international subsidiaries, which borrow in their respective local currencies.

Speaker #2: As a result, these borrowings do not create a material foreign exchange risk at the consolidated level. Given our first half performance and the higher inflationary trajectory in Turkey compared to expectations at the beginning of the year, we are revising our full-year top-line guidance.

Cüneyt Yavuz: Given our H1 performance and the higher inflationary trajectory in Turkey compared to expectations at the beginning of the year, we are revising our full year top line guidance. At this stage, we expect to close 2026 with consolidated revenue ranging from flat to a low single-digit decline in real terms under IAS 29 inflation accounting. Our retail investment plans and EBITDA margin guidance remain unchanged. I would also like to share some early observation on our Q3 trading. August marks the end of summer season and is typically characterized by elevated promotional activity across the industry. As such, we view the month as less representative of underlying new season performance. During August, Turkey retail sales grew by 25% in nominal terms, while online sales increased by 30%.

Speaker #2: At this stage, we expect to close 2026 with consolidated revenue ranging from flat to a low single-digit decline in real terms, under IS-29 inflation accounting.

Speaker #2: Our retail investment plans and EBITDA margin guidance remain unchanged. I would also like to share some early observations on our third quarter trading. August marks the end of the summer season and is typically characterized by elevated promotional activity across the industry.

Speaker #2: As such, we view the month as less representative of underlying new season performance. During August, Turkey was up 25% in nominal terms, while online sales increased by 30%.

Speaker #2: The first two weeks of September delivered 24% nominal growth in Turkey retail sales, with the back-to-school season beginning to gain momentum toward the end of the period.

Cüneyt Yavuz: The first 2 weeks of September delivered 24% nominal growth in Turkey retail sales, with the back-to-school season beginning to gain momentum toward the end of the period. In the second week alone, retail sales grew by 42%, providing an encouraging early indication of back-to-school trading. Looking ahead, our focus is on navigating the current environment with discipline without compromising Mavi's long-term potential. We will keep investing in our brand, customer experience, and retail network with the ambition to strengthen market share, build deeper customer relationships, and translate these investments into sustainable, profitable growth. Before ending my presentation, I have one final important announcement to make. Our board of directors has decided to initiate a second phase of share buyback transactions.

Speaker #2: In the second week alone, retail sales grew by 42%, providing an encouragingly early indication of back-to-school trading. Looking ahead, our focus is on navigating the current environment with discipline, without compromising Mavi's long-term potential.

Speaker #2: We will keep investing in our brand, customer experience, and retail network, with the ambition to strengthen market share, build deeper customer relationships, and translate these investments into sustainable, profitable growth.

Speaker #2: Before ending my presentation, I have one final, important announcement to make. Our Board of Directors has decided to initiate a second phase of share buyback transactions.

Speaker #2: The objective is to protect the interests of all our stakeholders, support sound price information and share price stability, and contribute to long-term shareholder value through the cancellation of the purchased or repurchased shares following its completion.

Cüneyt Yavuz: The objective is to protect the interest of all our stakeholders, support sound price information and share price stability, and contribute to long-term shareholder value through the cancellation of the purchased shares following its completion. The program will have a maximum duration of one year with TRY 1 billion of authorized funds. I would also like to highlight two important points regarding the execution of the program. Particularly, to provide clarity around how investors should interpret our daily buyback activity. First, under capital markets regulations, our buyback orders are placed as passive orders. This means we do not actively chase the market price. Whether an order is executed depends on market conditions and trading activity at the relevant price levels. Please make note that on certain days, orders may be only partially filled, and on other orders, there may be no execution at all.

Speaker #2: The program will have a maximum duration of one year, with ₺1,000,000 of allocated funds. I would also like to highlight two important points regarding the execution of the program, particularly to provide clarity around how investors should interpret our daily buyback activity.

Speaker #2: First, under capital markets regulations, our buyback orders are placed as passive orders. This means we do not actively chase the market price. Whether an order is executed depends on market conditions and trading activity at the relevant price levels.

Speaker #2: Please note that, on certain days, orders may be only partially filled, and for some orders, there may be no execution at all. Second, Mavi applies a 40-day no-purchase period ahead of each financial results announcement.

Cüneyt Yavuz: Second, Mavi applies a 14-day no purchase period ahead of each financial result announcement. We do not conduct any share buyback transactions during this period. This is a clear internal rule that we apply consistently around our financial reporting calendar. Taken together, these execution principles mean that buyback activity will not necessarily be linear or evenly distributed throughout the program. We will execute the program within the announced framework and applicable regulations while maintaining a disciplined approach to capital allocation. At this point, I am more than happy to take any questions you may have. Thank you for joining and being with us in this presentation.

Speaker #2: We do not conduct any share buyback transactions during this period. This is a clear internal rule that we apply consistently around our financial reporting calendar.

Speaker #2: Taken together, these execution principles mean that buyback activity will not necessarily be linear or evenly distributed throughout the program. We will execute the program within the announced framework and applicable regulations, while maintaining our disciplined approach to capital allocation.

Speaker #2: At this point, I’m more than happy to take any questions you may have. Thank you for joining and being with us in this presentation.

Speaker #1: Ladies and gentlemen, if you wish to ask a question, please raise your hand and we will call your name. If you prefer to type your questions, you may use the chat screen.

Moderator: Ladies and gentlemen, if you wish to ask a question, please raise your hand and we will call your name. If you prefer to type your questions, you may use the chat screen. For those of you who have dialed in via audio, we will take your questions last, and there are no more questions left on the platform. Our first question comes from Yapı Kredi, Eren Erdiş. Eren, please go ahead.

Duygu İnceöz: Ladies and gentlemen, if you wish to ask a question, please raise your hand and we will call your name. If you prefer to type your questions, you may use the chat screen. For those of you who have dialed in via audio, we will take your questions last, and there are no more questions left on the platform. Our first question comes from Yapı Kredi, Eren Erdiş. Eren, please go ahead.

Speaker #1: For those of you who have dialed in for the audio, we will take your questions last, when there are no more questions left on the platform.

Speaker #1: Our first question comes from—please go ahead.

Speaker #2: Hello. Thank you for the presentation and congratulations on the results. I have a couple of questions. The first one is on the US side.

Eren Erdiş: Hello. Thank you for the presentation, and congratulations for the results. I have a couple questions. The first one is on the US side. As I see, the business is really growing, but how much of the CapEx went there, and what is the US contribution to consolidated EBITDA right now? When do you expect it to become meaningfully profitable? The second one is on Türkiye stores. Most of the 15 net openings seem to be left for the H2. How confident are you in hitting that, and what size should we expect for the new stores? I am talking about actually average selling space per store. The third one is on margins. Gross margin was up about 240 bps despite weaker real pricing and higher personal costs. How much of that would you attribute to product mix? Could you more elaborate that? That is my questions.

Eren Erciş: Hello. Thank you for the presentation, and congratulations for the results. I have a couple questions. The first one is on the US side. As I see, the business is really growing, but how much of the CapEx went there, and what is the US contribution to consolidated EBITDA right now? When do you expect it to become meaningfully profitable? The second one is on Türkiye stores. Most of the 15 net openings seem to be left for the H2. How confident are you in hitting that, and what size should we expect for the new stores? I am talking about actually average selling space per store. The third one is on margins. Gross margin was up about 240 bps despite weaker real pricing and higher personal costs. How much of that would you attribute to product mix? Could you more elaborate that? That is my questions.

Speaker #2: As I see the business is growing, but how much of the CAPEX went there, and what's the US contribution to consolidated EBITDA right now?

Speaker #2: When do you expect it to become meaningfully profitable? And the second one is on Turkey stores. Most of the 15 net openings seem to be left for the second half.

Speaker #2: How confident are you in hitting that, and what size should we expect for the new stores? I'm talking about the actual average selling space per store.

Speaker #2: And the third one is on margins, gross margin was up about 240 bips despite weaker real pricing and higher personal costs. And how much of that would you attribute to product mix?

Speaker #2: Could you elaborate on that further? That's my question. Thank you again for the presentation.

Eren Erdiş: Thank you for the presentation again.

Eren Erciş: Thank you for the presentation again.

Speaker #3: You also. I'm just checking the numbers. I mean, of our total CAPEX, approximately, as I just mentioned, 22% was related to investments in our U.S. retail operations.

Cüneyt Yavuz: Sure, sir. I am just checking around just the numbers. Of our total CapEx approach, as I just mentioned, 22% was related to investments in our US retail operations. So you can figure that out versus the TRY 1 billion, TRY 325 million that we have invested. About one-fifth of that has already been directed towards US operations. In US, within a couple of months, we will have reached the initial target number of stores that we wanted to open in the US. There are, I think, two more stores that are being built as we speak. If I am not mistaken, one is in Denver and the other is in Florida, in Jacksonville. That will bring us to between, depending on how you count the stores, because we have also two stores relating to roofing industries, should bring us to around 15 dedicated Mavi stores, in total, 17 stores in the US.

Speaker #3: So you can figure that out versus the $1,000,325,000,000 that we have invested. About one-fifth of that has already been directed towards the US operations.

Speaker #3: In the US, within a couple of months, we will have reached the initial target number of stores that we wanted to open in the US.

Speaker #3: There are, I think, two more stores that are being built as we speak. If I'm not mistaken, one is in Denver and the other is in Florida.

Speaker #3: In Jacksonville. And that will bring us to between depending on how you count the stores, because we have also stores two stores relating to Brooklyn Industries.

Speaker #3: That should bring us to around 15 dedicated Mavi stores, and in total, 17 stores in the US. In terms of how the business grows, it is, of course, as we open up new stores.

Cüneyt Yavuz: In terms of how the business is going, it is, of course, as we open up new stores, it is definitely positively contributing to our top line growth. In terms of net contribution to EBITDA, there is still time to go. We are now mostly in an investment stage. When it comes to the international markets, at this point, the board of directors chooses to sort of continue to report the international business as one consolidated number. I think over the course of the next couple of quarters, once we review how the US's business is going, then I will be in a position to separately start reporting for the investment community as we are making a conscious effort in terms of growing our US business to give you more flavor in terms of what we are doing here.

Speaker #3: It is definitely positively contributing to our top-line growth. In terms of net contribution to EBITDA, etc., there is still time to go. We are now mostly in an investment stage.

Speaker #3: And when it comes to the international markets, at this point, the Board of Directors chooses to continue to report the international business as one consolidated number.

Speaker #3: I think over the course of the next couple of quarters, once we review how the U.S. business is going, then I will be in a position to separately start reporting for the investment community, as we are making a conscious effort in terms of growing our U.S. business, to give you more flavor in terms of what we are doing here.

Speaker #3: But at this point, if you are doing any calculations or looking for guidance from me, don't expect a positive contribution, because we are in an investment mindset—opening new stores.

Cüneyt Yavuz: At this point, I'm sorry, if you are doing any calculations or guidance from me, don't expect a positive contribution because we are in an investment mindset, opening new stores, where we are taking some hits in terms of store contributions and a ramp-up period, and more to come. It's really, really early days to definitely be in a position to guide you this way or that way in terms of plans and how things will play out. In terms of store openings and space, for the rest of the year in Türkiye, we are confident. We believe we will hit our guidance and maybe potentially even have some sort of positive surprises. Looking at our pipeline and expansion plans and refurbishments, we have more stores than what we are suggesting here that we could potentially handle.

Speaker #3: We are taking some hits in terms of store contributions and experiencing a ramp-up period. There is more to come, and it's really, really, really early days to be in a position to guide you one way or the other in terms of when and how things will play out.

Speaker #3: In terms of store openings and space, for the rest of the year, in Türkiye, we are confident. We believe we will hit our guidance.

Speaker #3: And maybe potentially even some positive surprises. Looking at our pipeline, expansion plans, and refurbishment, actually, we have more stores than what we are suggesting here.

Speaker #3: That we could potentially handle. But as you know, there can always be some delays and cancellations. So we maintain our current guidance, and we think these numbers are achievable.

Cüneyt Yavuz: As you know, there can be always some delays and calculations. So we maintain our current guidance, and we think these numbers are achievable. In terms of the space, at this current pace, if you're doing any calculations, estimates, calculating around 1,000 square meters for each and every new store or square meter growth, directionally would be right. Some of them will be 800,000, 900,000 square meters, depending on the location, and there will be others that will be 1,200, 1,300 square meters. But on average, indicator of 1,000 square meters is the right methodology to follow. That's what I'm using in terms of category and product planning. In terms of gross margin, I think Mavi is doing a great job in terms of gross margin. Definitely, product mix has a positive impact.

Speaker #3: In terms of the space, at this current pace, if you're doing any calculations or estimates, calculating around 1,000 square meters for each and every new store or square meter growth, directionally would be right.

Speaker #3: Some of them will be 800, 900 square meters, depending on the location. And there will be others that will be 1,200, 1,300 square meters.

Speaker #3: But on average, indicator of 1,000 square meters is the right methodology to follow. That's what I'm using. In terms of category and product planning.

Speaker #3: In terms of gross margin, I think Mavi is doing a great job in terms of gross margin. Definitely, product mix has a positive impact.

Speaker #3: But you will all recall that all the categories, as well as all the channels—meaning e-commerce to retail—have a similar contribution and business model within Mavi.

Cüneyt Yavuz: You will all recall that all the categories, as well as all the channels, meaning e-com to retail, have a similar contribution and business model within Mavi. Meaning our denim business is profitable, just as well as our T-shirts are profitable, just as well as our non-denim bottoms are profitable. Therefore, consumer tendencies, trend tendencies or migrations or growth, for that matter, in any one direction, generally speaking, a relative neutral impact. We have been growing our kids business, we have been growing our accessories business, and we have been growing our non-denim bottoms business.

Speaker #3: Meaning our denim business is profitable, just as well as our T-shirts are profitable, just as well as our non-denim bottoms are profitable. Therefore, consumer tendencies, trend tendencies, or migrations—or growth, for that matter—in any one direction is a positive. It has, generally speaking, a relatively neutral impact.

Speaker #3: We have been growing our kids' business. We have been growing our accessories business. And we have been growing our non-denim bottoms business. I'm also happy to say, generally, these categories are potentially even one or two points higher in terms of gross margin vis-à-vis, let's say, outerwear, which, in terms of total gross profit, has a greater sum.

Cüneyt Yavuz: I'm also happy to say, generally, these categories are potentially even one or two points higher in terms of gross margin vis-a-vis, let's say, outerwear, which is, in terms of total gross profit, at a greater sum, but as a margin, they typically have a lower contribution because of its more competitive nature and a higher ticket item. Therefore, moving into fall/winter, typically, we will have more, of course, outerwear coming in, especially in winter, which typically makes the fall/winter a little more challenging for us when it comes to gross margin management. What we try to do through the season is capitalize on our outerwear. These are categories outside of outerwear, like non-denim bottoms, shirts, kids accessories, to sweeten that mix so that we can maintain, and as we always try to do, hopefully even come out with better than expected gross margin improvements.

Speaker #3: But as a margin, they typically have a lower contribution because of its more competitive nature and higher ticket item. Therefore, moving into fall and winter, typically, we will have more, of course, outerwear coming in, especially in winter, which typically makes the fall and winter a little more challenging for us when it comes to gross margin management.

Speaker #3: What we try to do throughout the season is capitalize on our outerwear and other categories outside of outerwear, like non-denim bottoms, shirts, kids' accessories, to sweeten that mix so that we can maintain—and as we always try to do, hopefully even come out with—better than expected gross margin improvements.

Speaker #3: We are just as we are on this. I think the overall challenge for Mavi—and I'm giving this as an extra comment and introduction—is, I think, typical for many of the Turkish companies.

Cüneyt Yavuz: Just as we are on this, I think the overall challenge for Mavi, I think typical for many of the Turkish companies, where I think we are in a blessed situation where we have a pretty strong working capital and balance sheet. We do not have debt, and we are able to generate cash. This is something we want to continue. On the other hand, of course, pressures in terms of energy pricing, overheads, and OPEX related costs are still on a momentum. As you know, the inflationary targets that we started the year with in terms of the mid-term targets of the Central Bank and the government are falling short of expectations.

Speaker #3: I think we are in a blessed situation where we have a very strong working capital and balance sheet. We don't have debt, and we're able to generate cash.

Speaker #3: This is something we want to continue. On the other hand, of course, pressures in terms of energy pricing, overheads, and OPEX-related costs are still ongoing.

Speaker #3: And as you know, the inflationary targets that we started the year with, in terms of the mid-term targets of the Central Bank and the government, are falling short of expectations.

Speaker #3: And we were hoping that we would have better numbers. But now, the inflation seems to be 5 to 10 percent higher than what was expected, primarily due to regional conflicts and energy prices.

Cüneyt Yavuz: We were hoping that we would have better numbers, but now the inflation seems to be 5% to 10% higher than what was expected, primarily due to regional conflicts and energy prices. As many companies, we are more struggling or under more pressure when it comes to OPEX management and the costs increasing in that front. I am confident with the productivity of my team, technology, AI, intelligence, and also the disciplined approach where we are putting our money. This is my job. It is something that I have to deal with. Down the road, I think this is something we will come out on top and be one of the better companies that manages its pressures that are hitting the bottom line of the company. I hope that covers some of the questions and hopefully around your basket. Thank you.

Speaker #3: Like many companies, we are struggling more or under more pressure when it comes to OPEX management, and the costs are increasing in that trend.

Speaker #3: But I am confident in the productivity of my team, technology, AI, intelligence, and also the disciplined approach regarding where we are putting our money. Also, this is my job.

Speaker #3: It's something that I have to deal with, but down the road, I think this is something we will come out on top of and be one of the better companies that manages its pressures coming that are hitting the bottom line of the company.

Speaker #3: I hope that covers some of the questions I, hopefully, ran you by. Thank you.

Speaker #1: That was helpful. Thank you.

Eren Erdiş: That was helpful. Thank you.

Eren Erciş: That was helpful. Thank you.

Speaker #3: You're welcome.

Cüneyt Yavuz: You are welcome.

Speaker #2: Thank you. You can go ahead, please.

Moderator: Ece, you can go ahead, please.

Duygu İnceöz: Ece, you can go ahead, please.

Speaker #4: Thank you very much for the presentation. There was news regarding one of your suppliers ending operations in Türkiye. This week, as far as I know, you also shifted some of your sourcing to Egypt.

[Analyst]: Thank you very much for the presentation. There was news regarding one of your suppliers ending operations in Turkey this week. As far as I know, you also shift some of your sourcing to Egypt. Could you provide an update regarding the cost level, Egypt versus Turkey, and what additional effects in terms of working capital management could that bring any shift in your procurement? Thank you very much.

Speaker #4: Could you provide an update regarding the cost level in Egypt versus Türkiye, and what additional effects, in terms of working capital management, could that bring in a shift in your procurement?

Speaker #4: Thank you very much.

Speaker #3: Thank you, Ajay. Yes, unfortunately, one of the key players in the Turkish market, and also in the global denim market in terms of fabric manufacturing, has decided to exit the business.

Cüneyt Yavuz: Thank you, Ece. Yes, unfortunately, one of the key players in the Turkish market, also global denim markets in terms of fabric manufacturer, decided to exit the business. This year, Mavi is celebrating its 35th year, and for many years, from the day one inception, it was one of our key business partners. We had, of course, the privilege and opportunity, a heads-up opportunity of them sharing with us ahead of their business decision so that we could develop and move some of the product needs to other manufacturing sites to have minimal business disruption. I think this is a testament, of course, also of Mavi's working relationship with many of its suppliers in terms of also our credit department, finance department, as well as sourcing department, really staying close and on top with our sourcing environment and, let's say, the whole infrastructure.

Speaker #3: This year, Mavi is celebrating its 35th anniversary. For many years, from day one, it has been one of our key business partners.

Speaker #3: We had, of course, the privilege and opportunity—a heads-up opportunity—of them sharing with us ahead of their business decision so that we could develop and move some of the product needs to other manufacturing sites to have minimal business disruption.

Speaker #3: I think this is a testament, of course, also to Mavi’s working relationship with many of its suppliers, in terms of not only our credit department and finance department, but also our sourcing department—really staying close and staying on top of our sourcing environment and, let's say, the whole infrastructure.

Speaker #3: Mavi has been producing in Egypt not just recently, but has been producing for more than 30 years. So this is something not many people realize.

Cüneyt Yavuz: Mavi has been producing in Egypt, not just recently, but has been producing for more than 30 years. This is something not many people realize. Yes, there is currently in Turkey many brands, especially over the last couple of years, trying to find ways and find in ways into growing their business in Egypt and establishing new business models in Egypt. For us, the biggest priority is quality, and then price, of course. Again, just to give you another flavor, we have a country manager of sourcing based in Egypt with a team who is managing with our sourcing partners there for more than 3 years now. So we are already a well-established company when it comes to sourcing and contacts in the Egyptian market on top of the 30-plus years of experience of our denim relationship in Egypt.

Speaker #3: Yes, there is currently, in Turkey, many brands—especially over the last couple of years—trying to find ways and find ways into growing their business in Egypt and establishing new business models in Egypt.

Speaker #3: For us, the biggest priority is quality, and then price, of course. Again, just to give you another flavor, we have a country manager of sourcing based in Egypt with a team who’s managing with our sourcing partners there.

Speaker #3: For more than three years now. So we are already a well-established company when it comes to sourcing and contacts in the Egyptian market. On top of the 30-plus years of experience of our denim relationship in Egypt, in terms of what we are trying to manage, is a gross margin stability.

Cüneyt Yavuz: In terms of what we are trying to manage is a gross margin stability. Trying to move products from, let's say, Vietnam to Türkiye, to Türkiye to Egypt, from Egypt to Serbia. The number one priority, of course, is first and foremost, get the right product, right time, quality. For us, you must always remember that we are in the end of each other. You have to first have the right product, the right quality, and the right time. Then the second thing is get the right amount so we can sell it to the consumers so that we can have a best-in-class working capital, and keep the products moving. I am very proud that we are able to do this. Gross margin is a follow-through. It is a sort of an outcome.

Speaker #3: So, trying to move products from, let's say, Vietnam to Turkey, then Turkey to Egypt, from Egypt to Serbia—the number one priority, of course, is first and foremost to get the right product, at the right time, with the right quality. And you must always remember, Ajay, that in the end, we are a retailer.

Speaker #3: You have to first have the right product, the right quality, and, second, the right timing. And then the next thing is to get the right amount so we can sell it to the consumers.

Speaker #3: So that we can have a best-in-class working capital and keep the products moving. I'm very proud that we were able to do this.

Speaker #3: Gross margin is a follow-through. It's a sort of an outcome. And typically, if you do all of this, meaning have the right business partners who are manufacturing for you, have the right capacity planning, have the right fabric planning, because we do go deep dive not only just placing products as a whole, but we are looking into fabric, accessories, threads, buttons, zippers, the whole details of the building a pair of pants, and making sure that all the components come as we dedicate them, as we sort of dictate them to our manufacturers.

Cüneyt Yavuz: Typically, if you do all of this, meaning have the right business partners who are manufacturing for you, have the right capacity planning, have the right fabric planning, because we do go deep dive, not only just placing products as a whole, but we are looking into fabric, accessories, threads, buttons, zippers, the whole details of building a pair of pants and making sure that all the components come as we dedicate them, as we sort of dictate them to our manufacturers. Yes, moving around helps. Moving from one place to another in the Egyptian case, because coming back to a specific question, the labor cost will come down, but on the other hand, there will be time costs, and there will be some operating cost by moving products there. Typically there is a trade-off.

Speaker #3: So yes, moving around helps. And moving from one place to another, in the Egyptian case—because coming back to a specific question—the labor cost will come down.

Speaker #3: But on the other hand, there will be time costs, and there will be some OPEX-related costs by moving products there. So, typically, there is a trade-off.

Speaker #3: I mean, if you just look at one component, it would be a misleading approach. Actually, unfortunately or fortunately, I'll just comment also on this and be a bit extra wordy again.

Cüneyt Yavuz: If you just look at one component, it would be a misleading approach. Actually, unfortunately or fortunately, I will just comment also on this and a bit of extra words again. Many Turkish manufacturers moving into Egypt because labor is cheap, is finding out that labor as a component on its own being cheap is not enough to get the right results because manufacturing a certain product also requires the knowhow of the people there, getting the operation system up and running, and there will be other inefficiencies in the system. But again, for Mavi, these things do not hold because we are already working with the right manufacturers, and we have already taken the right actions.

Speaker #3: Many Turkish manufacturers moving into Egypt because labor is cheap are finding out that labor, as a component on its own being cheap, is not enough to get the right result, because manufacturing a certain product also requires the know-how of the people there, getting the operation system up and running, and there will be other inefficiencies in the system.

Speaker #3: But again, for Mavi, these things don't hold because we are already working with the right manufacturers and we have already taken the right actions Mavi right now has a one-plus-one strategy, meaning for every domestic manufacturer, we have a ghost or an alternative international manufacturer.

Cüneyt Yavuz: Mavi right now has a 1 plus 1 strategy, meaning for every domestic manufacturer, we have a ghost or an alternative international manufacturer that will meet our standards, whether it comes to gross margin or quality and on-time delivery. This has become a new trend, and it is a new stress point, but I am very proud to say that as a global company, our sourcing team is also a global sourcing team, and they are able to maintain our business as we go through. This is part of the textile apparel business. From time to time, certain countries will be more expensive, some will be cheap. There will be wars, unfortunately, there will be taxes, there will be tariffs, and Mavi is able to mitigate and find the best optimum scenario.

Speaker #3: That will meet our standards, whether it comes to gross margin, quality, or on-time delivery. So this has become a new trend, and it's a new stress point.

Speaker #3: But I'm very proud to say that, as a global company, our sourcing team is also a global sourcing team. And they're able to maintain our business as we go through.

Speaker #3: And this is part of the textile apparel business. From time to time, certain countries will be more expensive, and some will be cheaper. There will be wars, unfortunately.

Speaker #3: There will be taxes. There will be tariffs. And Mavi is able to mitigate and find the best optimum scenario, which is not going to which is never going to be, I can be quite confident, never going to be more worse than any of our competitors.

Cüneyt Yavuz: Which is never going to be, I can be quite confident, never going to be more worse than any of our competitors in terms of the current playing ground. So it is an externality, but it is an externality I see where we can handle the best, and I don't think we are going to be short selling vis-à-vis whether it is in the textile group or as we put on the de facto the local manufacturers. I hope that gives you a sense of where we are heading. I would say just generally speaking, look at Mavi in terms of our guidance, in terms of how we think gross margin is going to run. And I think whether it is international or domestic is a bit secondary. Thank you.

Speaker #3: In terms of the current playing ground, it's an externality. But it's an externality where I see we can handle it the best. And I don't think we're going to be short selling vis-à-vis Inditex, the Zara Group, or elsewhere if you go to, de facto, the local manufacturers.

Speaker #3: I hope that gives you a sense of where we're heading. So, I would say just generally speaking, look at me and Duygu in terms of our guidance on how we think gross margin is going to run.

Speaker #3: And I think whether it's international or domestic is a bit secondary. Thank you.

Speaker #1: Do we have any other questions? Okay, it seems like we don't have any other questions. Thank you for your attendance and contribution to our webcast.

Moderator: Do we have any other questions? Okay, seems like we don't have any other questions. Thank you for your attendance and contribution to our webcast. Should we have any follow-up questions, please don't hesitate to reach out. Hope to see you again in 3 months' time.

Duygu İnceöz: Do we have any other questions? Okay, seems like we don't have any other questions. Thank you for your attendance and contribution to our webcast. Should we have any follow-up questions, please don't hesitate to reach out. Hope to see you again in 3 months' time.

Speaker #1: Should you have any follow-up questions, please don't hesitate to reach out. Hope to see you again in three months' time.

Cüneyt Yavuz: Thank you. Bye-bye.

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Q2 2026 Mavi Giyim Sanayi ve Ticaret AS Earnings Call

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