MYT Netherlands Parent B.V. Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
February 11, 2025

Key Takeaways

  • MyTeresa reported 13.4% net sales growth and a 7.3% adjusted EBITDA margin in Q2, marking sustained profitable growth.
  • The United States led regional performance with 17.6% net sales growth and top-customer GMV up 34.7%, while Europe grew 12.8% amid ongoing macro headwinds in Asia.
  • Revenue from top customers grew by 9.1%, driven by a 13.6% increase in GMV per top customer, underscoring the success of its “wardrobe-building” model.
  • Operational metrics improved with average order value up 9.5% to €736, return rates stable, and an NPS of 83.3%, reflecting strong customer satisfaction.
  • MyTeresa reaffirmed its FY25 outlook and remains on track to close the YNAP acquisition in H1 2025, paving the way for the new “Luxe Experience” global luxury group.
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Earnings Conference Call
MYT Netherlands Parent B.V. Q2 2025
00:00 / 00:00

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Operator

Greetings and welcome to the MyTeresa Second Quarter of Fiscal Year twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. Today's call is being recorded and we have allocated one hour for prepared remarks and Q and A. It is now my pleasure to introduce your host Martin Beer, MyTeresa's Chief Financial Officer. Thank you, sir. Please begin.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

Thank you, operator, and welcome, everyone, to MyTeresa's investor conference call for the second quarter of fiscal year twenty twenty five. With me today is our CEO, Michael Kiger. Before we begin, we'd like to remind you that our discussions today will include forward looking statements. Any comments we make about expectations are forward looking statements and are subject to risks and uncertainties, including the risks and uncertainties described in our annual report. Many factors could cause actual results to differ materially.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

We are on a no duty to update forward looking statements. In addition, we will refer to certain financial measures not reported in accordance with IFS on this call. You can find reconciliations of these non IFS financial measures in our earnings press release, which is available on our Investor Relations website at investors.mytreisa.com. I will now turn the call over to Michael.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Thank you, Martin.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Also from my side, a very warm welcome to all of you and thank you for joining our call. Today, we will comment on the results and performance of our second quarter of fiscal year twenty twenty five. We are very pleased with our results in a still volatile macro environment. With strong accelerating revenue growth and positive significantly improved adjusted EBITDA in the second quarter, we continued our very positive business momentum from the previous quarter and have achieved a significant step up in financial performance. In H1 of fiscal year twenty twenty five compared to H1 of fiscal year twenty twenty four, We believe that they are clear signals for an improving overall luxury market, while of course concerns remain for the macro environment.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We have reaffirmed our leadership position in terms of financial performance and reputation in digital luxury. Our clear focus on the high spending wardrobe building top customers sets us apart and allows us to win market share and grow profitably. Strong top customer revenue growth and outstanding average order value and excellent customer satisfaction scores demonstrate our relentless customer focus, which is a key success factor for MyTeresa. We continue to be very excited about the expected acquisition of YNAB. This acquisition will allow us to create a global digital luxury platform across multiple highly distinguished storefronts.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We believe we will be able to generate significant synergies in using a joint backbone but most importantly, we will have one of the most relevant overall value propositions for global luxury shoppers and brands. We continue to expect closing of the transaction in the first half of calendar year 2025. Today, I wish to highlight three key messages to you that set us apart in the second quarter and clearly demonstrate the continued success of the Mai Der Riva business despite the ongoing macro uncertainty. First, with our distinctive business model focusing on big spending, wardrobe building, luxury shoppers, we showed that we are fully on track for strong profitable growth for full fiscal year 2025. Second, we have clearly demonstrated again that Mai Theresa builds a community for true luxury enthusiasts and creates desirability through digital and physical experiences which makes us highly attractive for true luxury brands to partner with.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Third, we are well positioned and equipped to create a leading global digital luxury group of enormous reach and relevance with the expected acquisition of YNAB. Let me now comment in more detail on these three messages. First, the second quarter demonstrated again our unique ability to generate profitable growth based on our distinctive business model focusing on the wardrobe building big spenders. In Q2 of fiscal year twenty twenty five, we grew our GMV by plus 11.9% compared to Q2 fiscal year twenty twenty four. We achieved a strong net sales growth of plus 13.4% in Q2 of fiscal year twenty twenty five compared to Q2 of fiscal year twenty twenty four.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We are fully on track to achieve our outlook for the full fiscal year 2025. The United States continues to be a significant growth driver for our business. We saw again a double digit net sales growth of plus 17.6% in Q2 fiscal year twenty twenty five compared to Q2 fiscal year twenty twenty four. And The U. S.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Accounted for 20.6% of total net sales of our business in the second quarter of fiscal year twenty twenty five. Our highly curated selection of true luxury brands resonates very well with the big spending U. S. Luxury customers looking for multi brand inspiration. And we continue to see the market as a major source for future growth.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

In Europe, including Germany and The UK, we also experienced a strong double digit net sales growth of plus 12.8% in the second quarter of fiscal year twenty twenty five compared to the second quarter of the previous year, while results in China and Asia continue to be impacted by the ongoing macro headwinds and uncertainties. Our clear focus on big spending water building customers is the fundamental driver of our continued success. Our GMV with our top customers grew by plus 9.1% compared to Q2 of fiscal year twenty twenty four. This was largely driven by an increase of the average spend in terms of GMV per top customers by plus 13.6% compared to the same period last year. In The United States, our business with top customers in terms of GMV grew by plus 34.7% in the second quarter of fiscal year twenty twenty five.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Martin will talk in a few minutes about the details of our bottom line results for the second quarter, but let me provide you already with some key operational highlights. We achieved excellent customer satisfaction measured by our internal Net Promoter Score that reached an outstanding 83.3% in Q2 fiscal twenty twenty five, demonstrating the consistent excellence of our customer services proposition. Our average order value last twelve months increased by plus 9.5% to Euro $7.36 in Q2 fiscal year twenty twenty five demonstrating the success of our focus on selling high end luxury products to top customers. Furthermore, we reported stable return rates and improving cost ratios in the second quarter of fiscal year twenty twenty five. All these operational highlights underline the fundamental strength and the consistent performance of our business model.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Second, the second quarter clearly shows that Mitre Raiza builds a community for true luxury enthusiasts and creates desirability through digital and physical experiences. This makes us highly attractive for luxury brands to partner with. The second quarter saw many high impact campaigns and exclusive product launches that drove our global business with high spending wardrobe building customers. We launched exclusive womenswear and menswear runway looks from Moncler Grenoble as well as exclusive bags and accessories from Eva SUNYAFUGITA collection for womenswear, menswear and life. We launched an exclusive womenswear capsule collection by Victoria Beckham, only available at Maitre Reza.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We were exclusive partner for launching the womenswear NuMu ski collection only available at NuMu and Maitre Reza. And we exclusively offered our top customers early access to the Women's Wear Good Cheap Holiday collection. We were exclusive pre launch partner for Kate's Resort 2025 collection and Eliade's Archetypes collection. Finally, I wish to mention that we launched an exclusive menswear eveningwear collection from L'Oreal piano. Please see our investor presentation for more details on brand collaborations in the second quarter.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Another very recent and noteworthy collaboration is the launch of Bvlgari Fine Jewelry and Watches in my Terezin. With the prestigious Italian Maison Bvlgari, we are further extending our fine jewelry assortment. This latest brand partnership is a clear testimony and reinforcement of our clear focus on high spending top customers. In addition to creating the viability for our top customers with exclusive digital campaigns and product launches, we also hosted again many events and physical experiences for our top customers, some of which were true money can't buy experience. We aspire to constantly engage with our top customers across the globe to build strong long lasting relationships.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

In the second quarter, we hosted various top customer events including style suites in New York, Singapore, Toronto and Miami. We also invited top customers to a multi day style suite event at the Nature Discovery Park on the rooftop of K11 Musea in Hong Kong. We arranged an intimate cocktail event for top customers in Jeddah and an intimate dinner in Abu Dhabi. Top customers were invited to an exclusive Parisian experience with Berluti in Paris that included a private tour of Verluti's renowned Chaux Atelier. We also hosted an elegant cocktail reception and dinner with the article at the iconic Saint Ambrose in Milan in attendance of both designers Giulia Ambrosio and Giorgia Todi.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Together with Oscar de la Renta, we hosted a dinner at the Hia hapten Rias in attendance of the designers Fernando Garcia and Laura Kim. Another highlight was an intimate cocktail and dinner with Victoria Beckham at CocoDuck in New York to celebrate the launch of the third exclusive Victoria Beckham X Myteriva capsule collection. We also hosted several fine jewelry events including a cocktail at La Miratage Beverly Hills and an exclusive event with the fine jewelry brand Jeprim in New York. Please see our investor presentation for more details on our various exclusive events around the world in the second quarter. As always, the Absence highlights for our top customers were amazing true money can buy experiences that we created for them in the spirit of being a community for luxury enthusiasts.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We invited guests to an unforgettable mountain experience with Zenia between the scenic Biella Alps of Piedmont and the culinary treats of Milan. Guests were welcomed to Oasi Zenia where they immersed themselves into the history and craftsmanship of Xenia through a private tour of the houses we live. The visit continued to the founder's villa, Ermina Giro D'O Xenia, where guests enjoyed a lunch inspired by the family recipes of Nina Zegna. The experience concluded with an intimate dinner in Milan in attendance of Artistic Director Alessandro Saar Toki. Another highlight was an exclusive multi day Nordic winter experience with Mount Clare Grimoble in Oslo.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Over two days, our guests were invited to various unique moments, including a cocktail reception and dinner at the iconic contemporary Oslo Opera House followed by snow activities at Skimor Park Ski Resort the day after. In The United States, we have just announced that we will team up with Bemelmans Bar, the storied New York bar with an exclusive invite only pop up in Aspen. Together, we are creating an immersive apres ski experience bringing luxury fashion and BEMERMANN's signature martinis to Aspen from February 14 through March 2. In addition to providing our top customers with memorable experiences, all these events also created global brand awareness for MyTeresa through press and social media amplification. Third, we see ourselves well positioned and equipped to create a leading global digital luxury group with enormous reach and relevance with the expected acquisition of Jukes Neta Porter.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We will be home to some of the most distinguished digital store brands in the world. MyTeresa and the brands Neta Porter, Mr. Porter, Duke's and The Outnet all individually have earned a strong reputation in the luxury industry for their pioneering roles in innovation, authoritative editorial voice and curation as well as high quality customer service. All store brands stand for clearly differentiated but complementary multi brand offerings for luxury customers worldwide. We are committed to further strengthen and develop the unique store brands and their identities within the group by building on their heritages while fostering synergies in the back of house.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We expect closing of the transaction in the first half of twenty twenty five. As we enter a new and exciting phase of our company, we have decided to form the new group under the new brand name Luxe Experience, which will replace mighty Netherlands parent EV as our group name upon closing. This new name clearly underlines our unique focus on creating desirability for luxury enthusiasts with digital and physical experiences. Luxe Experience will serve as a unifying symbol reflecting the core values of a strong customer focus, a highly curated edit and inspiration as well as the creation of their liabilities through unique digital and physical experience. Of course, we will continue to serve our customers with our well known and highly loved brand name, Mykalay.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We will continue to be listed on the New York Stock Exchange with the trade name LuxeXperience and the new ticker symbol of Luxe LUXE that will replace the current ticker symbol MYTE. Luxe Experience will present the most exciting opportunity for investors worldwide to participate in the huge market opportunity in digital multi brand luxury shopping. We also recently announced the nomination of Burkhard Gold, Chief Financial Officer of Richemont as a new Supervisory Board member. With the completion of the transaction we are excited to welcome Richemont one of the most renowned and largest luxury companies as a major shareholder of Mitreuse. As part of the agreement signed Richemont has the right to nominate a candidate for a seat on the Supervisory Board, expanding it from seven to eight seats.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We are delighted that Volker Gund, a highly qualified financial and industry expert in the luxury goods sector has been nominated to join the Board upon closing. The Board will remain composed of a majority of independent directors under both NYSE and Dutch corporate governance code standards. Both the renaming and denomination of Burkhard Gond will be presented for approval by our shareholders at an extraordinary general meeting scheduled for March 6 and are subject to completion of the Wainab acquisition. With all the above, it should come as no surprise that we are very pleased with our performance in the second quarter of fiscal year twenty twenty five. We believe that the strong financial results demonstrate the strength and consistency of our business model delivering profitable growth.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We are extremely well positioned and fully prepared for the expected acquisition of YNAB which will unlock even greater opportunities for profitable growth and will create significant value for our share. All this and the results of the first half of fiscal year twenty twenty five support our strong confidence in our medium term growth trajectory and profitability target. And now I hand over to Maarten to discuss the financial results in detail.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

Thank you, Michael. As mentioned, we continue to successfully work towards the closing of our acquisition of the Jukes Net a Porter Group expected in the first half of twenty twenty five.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

And we are truly excited for this next chapter of growth with establishing Luxe Experience, a clear global leader in online and multi brand luxury. We will provide a more in-depth view on the performance and our plans for the future after closing. I will therefore focus this call on the financial highlights of our second quarter and the first half of fiscal year twenty twenty five ended 12/31/2024. We are very pleased with our results in the second quarter of fiscal year twenty twenty five. Double digit net sales growth of plus 13.4%.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

Our AOV LTM increased by plus 9.5%. An improvement in the gross profit margin of 110 basis points and a strong adjusted EBITDA margin of plus 7.3%, an increase of three fifty basis points versus last year. Even with our strong top line growth, inventory levels decreased minus 1.3% year over year with a DIO of two fifty eight days right at the target level. We will continue our track record of profitable growth, leveraging our global presence, increasing acquisition of true top luxury customers worldwide and ever increasing support from the strongest luxury brands. I will now review the financial results for the second quarter and first half of fiscal year twenty twenty five ended 12/31/2024 in more detail and give additional input on certain key developments affecting our performance.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

Unless otherwise stated, all numbers refer to Europe. September Through December 20 20 4 net sales grew by 26,400,000 or 13.4%. In the first six months of the first fiscal year, net sales grew by 10.6% to

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

424,700,000.0. We saw an increase in GMV per all customers of plus 6.3% in the second quarter of fiscal year twenty twenty five and even more impressive, the GMV per top customer increased by plus 13.6% during the quarter. With that, GMV increased by 26,000,000 or 11.9% to 244,700,000 as compared to 218,700,000 in the prior year quarter. In the first six months, GMV grew by 9.2% to 461,200,000 with an increase of per order. Our average order value in the last twelve months now stands at an outstanding €736 as compared to €672 in the prior year period, a plus of 9.5%.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

Our increase in AOV improves not only our unit economics but also manifests our successful focus on full price selling at the very high end of true luxury. We are outpacing our competitors and thus continuously capture market share. In Q2 of fiscal year twenty twenty five, we grew our business in The U. S. By plus 17.6%.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

Our net sales share in The U. S. Now stands at 20.6% driven by increase in GMV coming from our top customers of plus 34.7%. Our core market Europe also grew by plus 12.8% in net sales and we are strengthening our market positions worldwide. In the second quarter of fiscal year twenty twenty five, gross profit increased by 16% to 113,600,000.0 as compared to 97,900,000.0 in the prior year period.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

The gross profit margin increased by 110 basis points to 50.9%. In H1 of fiscal year twenty twenty five, the gross profit margin increased by 140 basis points from 46.2% to 47.6%. We continue to focus on increasing our share of full price sales and remain cautiously optimistic that we will be able to successfully continue to do so. The adjusted shipping and payment cost ratio decreased by 90 basis points during the quarter now standing at 13.8% as compared to 14.7% in the prior year period. The improvement mainly stands from our high quality customer focus resulting in higher AOVs and stable return rates.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

In H1 of fiscal year twenty twenty five, the adjusted shipping and payment cost ratio decreased by 60 basis points to 13.7% from 14.3% in the prior year period. In the second quarter of fiscal year twenty twenty five, the marketing cost ratio increased by 160 basis points from 10.7% to now 12.3%. We stay focused on acquiring high potential customers and retaining our top customers. With returning to these normal levels of marketing costs, we are able to position Margi Riza even more successfully to capture market share as the market continues to pick up. During the six months ended 12/31/2024, the marketing cost ratio as a percentage of GMV increased by 70 basis points to now 11.9 as compared to 11.2% in the prior year period.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

Adjusted selling, general and administrative SG and A cost ratio decreased by 160 basis points to 13.9% during the second quarter of fiscal year in line with our preceding quarters of around 14% of GMV. On an absolute basis, adjusted SG and A expenses remained stable at $33,900,000 In the first six months, fiscal year twenty twenty five, the adjusted SG and A cost ratio decreased by 110 basis points to 13.9%. We capitalize on cost leverage to optimize our operational efficiencies as we scale. We remain committed to continuously decrease our SG and A cost ratio. In the second quarter of fiscal year 'twenty five, adjusted EBITDA increased by $8,700,000 to $16,200,000 The adjusted EBITDA margin increased by three fifty basis points to 7.3% as compared to 3.8% in the prior year quarter.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

The increase is mainly driven by our gross profit margin improvement and further efficiencies in all cost lines despite investments in our market position. For H1 of fiscal year twenty twenty five, adjusted EBITDA was at $19,100,000 with an adjusted EBITDA margin of 4.5% increasing by two eighty basis points. Depreciation and amortization remained fairly stable in the second quarter of fiscal year twenty twenty five with $3,900,000 as compared to $3,800,000 in the prior year quarter. As a percentage of GMV, depreciation and amortization decreased from 1.8% to now 1.6%. Our profitable growth and the strength of our business model were also visible on adjusted operating income and adjusted net income level.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

In the second quarter of fiscal year twenty twenty five, adjusted operating income was at a margin of 5.5%, just slightly below the 7.3% adjusted EBITDA margin. This has been and is a continuous highlight of the Mitricep business model. Adjusted net income in the second quarter was $10,600,000 or 4.8% of net sales. Let's take a look at the cash flow statement. In the second quarter of fiscal year twenty twenty five, operating cash flow used only $6,000,000 as we're coming back to normalized levels of working capital.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

We are fully on track with managing our inventory levels. Our inventory stood at 404,600,000.0, decreasing by minus 1.3% year over year even with our top line growth. As of 12/31/2024, we had a DIO of two fifty eight days, which is right at our long term target of around two sixty days inventory outstanding. Cash flow from investing used up 400,000.0 in the second quarter and 1,700,000.0 in the first six months of the fiscal year. With this, CapEx was significantly below 1% of GMV, another highlight of our business model.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

We ended the six month period with 13,800,000.0 cash attached. The excellent performance of the quarter is fully in line with our expectations. Given the seasonality in the business, you always need to look at the first half and the second half of the fiscal year combining fiscal Q1 and Q2 and combining fiscal Q3 and Q4. For the first half of fiscal year '20 '20 '5, net sales grew plus 10.6% and GMV grew plus 9.2%. The adjusted EBITDA margin was at 4.5%.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

We therefore confirm our guidance for the full fiscal year 2025 ending 06/30/2025 with GMV and net sales growth between 713% and an adjusted EBITDA margin between 35%. In line with our seasonality, we expect a typically weaker fiscal Q3, comparable with fiscal Q1 and a typically strong fiscal Q4. With all the above, it comes as no surprise that we are very confident in the success of our unique positioning and business model and we will continue our clear focus on strong and profitable growth. We are also truly excited for the medium and long term outlook of our business as we embark on the next chapter of growth with the expected closing of the acquisition of the Jukes Net a Porter Group in H1 of calendar year twenty twenty five. Forming the new group Luxe Experience, we aim to fortify our clear market leadership position in global multi brand luxury.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

That's a strong profitable growth and thereby creating significant value for our shareholders and all stakeholders in MyTeresa and the JUXT NET A PORTER group. And with that, I will now turn the call back over to Michael for his concluding remarks.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Thank you, Martin. We are very pleased with our second quarter of fiscal year twenty twenty five earnings results. We are even more pleased to see ourselves well positioned to achieve our fiscal year twenty twenty five guided targets based on the first half of fiscal year twenty twenty five.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We continue to focus on creating a community for true luxury enthusiasts worldwide and the desirability through digital and physical experience. We see ourselves well prepared for the expected acquisition of liner and are excited to create significant value for our high end customers, brand partners and shareholders. And with that, I ask the operator to open the line for your questions.

Operator

Our first question will come from the line of Oliver Chen with TD Cowen. Please go ahead.

Oliver Chen
Managing Director & Senior Equity Research Analyst at TD Cowen

Hi. Thank you very much. Exciting with the deal. As you think about getting ready for the deal, what are your thoughts on the technology stack and what you're doing just to optimize the integration opportunity? Also, as we look forward to that, any other thoughts on the Ute side of the business in terms of restoring better profitability there?

Oliver Chen
Managing Director & Senior Equity Research Analyst at TD Cowen

And then a follow-up on guidance, would love color on gross margins in the second half and how you're viewing those. It sounds like inventory is in really good shape. Thank you.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Thank you, Oliver. Let me address the first two Russians and then Martin will speak about the guidance. As we are before closing, we of course are not in a position to have full operational insights, but we explained clearly in our investor presentation on the announcement of the deal agreement that the clear strategy is to bring the luxury businesses of Luexner Teleporto onto the Maite Resa platform in the sense of our only own developed technology that is clear clearly the best solution. We have a platform that works. It's fully owned by us, fully operated by us.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We know it inside out. We have a strong engineering bench to do that. Clearly, such a replatforming exercise will require twenty four to thirty six months. That is an expected duration and is quite achievable based on our experience of our own replatforming. We strongly believe that with a joint back office and a separated back office for the off price businesses, we do and provide the best and most efficient solutions for all those banners that join our group.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

And then on the banner side, we see opportunity to make them even stronger even though the brand equity of Netter Pulte, Mr. Pulte, Jug's outlet are quite strong, but we will invest to make them even more desirable and to be fully in line with the principles of Luxe Experience which is customer focused, curation and inspiration. So we're really excited about this and are hopeful to close the deal in the next couple of months. And then Martin maybe you take up the margin question?

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

Yeah, happy to do so guidance and gross profit margin development, exactly as you rightfully focus on how is the quarter performance changing the overall guidance and how it is relating to the guidance.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

The performance in Q2 is fully in line with our expectations and it is always given the seasonality, you have to look at always the first and the second half. So Q2 and Q4 are very strong quarters. Q1 and Q3 given seasonality are weaker quarters. And that's why looking at the performance of H1 and the as you rightfully point out Oliver the improvement in the the gross profit margin of 140 basis points in Q2 it was 110 basis points. We expect a similar performance of H2 than what we saw in H1.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

So therefore, I mean the 140 basis points I'm not sure whether due to the lapsing of some effects we everybody should expect for H2 but we don't want to come back to decreasing gross profit margins. We want to continue and that is clearly visible in our numbers on or focus on a full price on a very strong full price share on targeting the right set of customers and this is fully in line with our guidance. So also expect in H2 a stable, slightly increasing gross profit margin and the overall H2 to be very comparable with H1.

Oliver Chen
Managing Director & Senior Equity Research Analyst at TD Cowen

Thank you. Best regards.

Operator

And we'll take our next question from the line of Matt Boss with JPMorgan. Please go ahead.

Matt Boss
Equity Research Analyst at JPMorgan - Equity Research

Thanks and congrats on a nice quarter. So Michael, could you speak to current health of the digital luxury backdrop today maybe relative to the last two years in terms of what you're seeing? And just elaborate on the acceleration in demand that you saw across The U. S. And Europe in the second quarter and has the momentum continued post holiday?

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Sure. Thank you, Matt. I think the digital sector is in good health if you regard it from the consumer perspective. The expansion of the digital share in luxury is continuing. Of course, there are sort of polarizations out there.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

It's absolutely true for the big spenders. We continue to see they spend more and more with us spend more and more on digital and there is this geographic polarization. We have seen continuous improvement in U. S. Post election, really strong demand and we are very happy with our European business, almost 13% growth.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

So we have now a second strong lag in the business and is of course also a very strong business in the Arabic Peninsula. While Asia, particularly Greater China still lags behind still the demand is still dampened by the economic outlook. So we would say the health is very good. We have really seen a turn out of the heavy discounting that we saw last year. The slowdown as discussed before has really surprised many players leading to high inventory levels and not low yields.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Martin clearly highlighted, we are actually slightly below last year's inventory despite revenue growth, but the digestion of inventory or oversupply of inventory has happened across the board. So while we only see small green shoots in some places, The health of the industry is dramatically better than twelve months ago and we in our numbers for sure have seen a pivot now for some quarters and therefore our outlook is positive, not negating that the macro environment is still quite volatile.

Matt Boss
Equity Research Analyst at JPMorgan - Equity Research

Great. And then Martin, maybe relative to 3% to 5% EBITDA margins this year, how best to think about the time line you see as reasonable for a return to historical high single digit EBITDA margin?

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

Yes. Happy to do so, Matt. I mean, obviously, we in the first half of the fiscal year, we had an EBITDA margin of 4.5%. And for the second half, I mean, for the full fiscal year, we guide to 3% to 5%. Given the uncertainties in the industry, the shifts that I mean nobody really can foresee how '25 and '26 will unfold.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

But it is clear that we embarked on a trend on the gross margin side and this is the key driver for our overall profitability. So we clearly expect in the medium term to come back to the higher single digit margins that we used to have a couple of years ago.

Matt Boss
Equity Research Analyst at JPMorgan - Equity Research

Great. Best of luck.

Operator

Our next question will come from the line of Ashley Helgans with Jefferies. Please go ahead.

Blake Anderson
Vice President at Jefferies & Company Inc

Hi. It's Blake on for Ashley. Thanks for taking our question. Wanted to start with, it sounds like your high end luxury consumer is obviously really strong. Can you talk at all about the trends of the more aspirational customer throughout the quarter?

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Sure. Happy to do so. What we have seen and it continues that The U. S. Consumer is really leading the way and we have really seen strong growth in The U.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

S. Market for some quarters at least for my telenovela that is. And now we have also seen double digit growth in Europe, which is quite nice to see even though of course also in Europe there are markets that grow even stronger and some markets are lagging. And this is starting to be also driven by aspirational customers, also starting to be driven by better sales in accessories and bags, which are the categories that are driven by or at least driven more by aspirational customers. This is by no means where we were in 2022.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

But as you rightly say, our strong driver of growth driver is the better part of the customer cohorts and here we continue to see also in this quarter double digit revenue increase per capita. These are the drivers. This makes Maite River so successful in a still volatile environment. But we and I will repeat, we see a pivot in the market if you exclude Greater China and we clearly see a pivot in the market.

Blake Anderson
Vice President at Jefferies & Company Inc

That's encouraging. And then wanted to ask two more, if I could. One was on the marketing ratio. It seemed to be up you seemed to lean into marketing spend a bit more in Q2. How should we think about that rate for the second half on marketing?

Blake Anderson
Vice President at Jefferies & Company Inc

And then the touching again on the top customers, I think they did decline slightly year over year, versus being positive recently. How are you thinking about managing the growth of AOV versus top customers in that trade off?

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Very happy to answer and you're right and you picked up correctly on our presentation. I'll leave it to Martin for the outlook of marketing spend, but actually the two questions are connected. We have, as you heard from Martin, increased our marketing spend significantly over the quarter last year. And what we are doing now, we are investing in growth with upper funnel investments. Of course, in 2023, as the market was more difficult and as we managed costs very tightly to achieve still good financial results, we focused a lot of the marketing spend on the lower immediately returning investments.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

But now that we see opportunity to grab market share and as now the market is picking up, we're also investing more on the upper funnel, which does not give you immediate new customers, which does not drive immediate pickup in revenue, but sets and lays the ground for future cohort acquisition because for new customers, it takes a while and actually it's not immediate conversion. And that's what you see and what you rightly picked up, a small decrease in the base even though the quality is amazing with double digit revenue growth per capita is actually a consequence of lower longer term operating marketing spend a year ago. So it's good news. We are back. We're investing in marketing and this lays the foundation for more customer growth and also expansion of the top customer cohort.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

So nice pickup and Martin maybe you give an outlook in that sense.

Martin Beer
Martin Beer
Chief Financial Officer at MYT Netherlands Parent

Yeah. And with that what Michael said we expect also for H2 a comeback to the normal levels of the marketing cost ratio that we always had around 1212.5%.

Blake Anderson
Vice President at Jefferies & Company Inc

Great. Thank you so much and best of luck for the second half.

Operator

Our next question comes from the line of Grace O'Sador with Morgan Stanley. Please go ahead.

Grace Osadolor
Grace Osadolor
Equity Research Associate at Morgan Stanley

Hi. Thank you for taking my question and congratulations on the results. I wanted to ask on what you're seeing around price points.

Grace Osadolor
Grace Osadolor
Equity Research Associate at Morgan Stanley

You've had a lot of evidence of more premium brands doing better than luxury in the industry. So any color there that you can call out and also in terms of what you're seeing from luxury prices being put through if you're seeing more entry price for items in the industry? Thank you.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Thank you. Honestly, in our business, the emergence of more entry price points I cannot confirm. The business is driven by big spenders is driven by high priced items. What I can confirm is however that we clearly are in the moment of pause of hold on any further price increases. So in that sense, we have come out of a phase where a lot of price increases happened and arguably some of them were too far or too high.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

The market overall I think is looking at opportunities to bring back the aspirational customer as just discussed and we do believe that well priced entry price level or of course in the context of True Luxury is one element of that strategy. But in our business, the growth that you have seen and as demonstrated by the average order value, which in turn is driven really by the average item value, the 9.5% increase, not our growth is not driven by business that is tilting towards premium or entry price points.

Operator

Thank We'll take our next question from the line of Oliver Chen with TD Cowen. Please go ahead.

Oliver Chen
Managing Director & Senior Equity Research Analyst at TD Cowen

Hey, Michael Martin, thanks a lot. U. S, you've had really great momentum and you continue to have. What are your thoughts in terms of what's fueling that and also service levels and distribution centers? And question, longer term, our thesis is for physical meets digital and bricks meets clicks.

Oliver Chen
Managing Director & Senior Equity Research Analyst at TD Cowen

What do you think about the future of how you'll evaluate physical distribution as well more broadly?

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Well, I mean, on the second part, I agree, we agree that physical presence is key. I mean, we believe we need to form strong customer relationships and we are. We need to present digital but physical experiences as well. And for the moment, this clearly means physical pop ups, physical presentations of our brand of what we do. As of this weekend.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

We will be present physically in Aspen with Apres Ski experience together with our friends from Vemelmans Bar from New York. First time you can experience Vemelmans Bar outside of the car lot in New York. So that we totally agree with and it's no coincidence that we name our overall group Luxe Experience, therefore physical incarnations so to speak RT. The key for our success, we believe at least, is our customer focus, really understanding what it is that our customer wants, introducing products that they desire, be it kits, life and now a clear focus on fine jewelry, and really establishing relationships with a customer clientele that is very careful with its time. So, you need occasional moments to really strengthen and form relationships and otherwise time is and speed is still one of the key components of excellent service in e commerce and we are working hard on this.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Our new distribution center in Leipzig has again made it possible to be faster. We always said down on the roadmap if we achieve critical mass in certain geographies, we also believe that regional distribution centers can play a role in making time a real USP and obviously with the expected acquisitions there are more opportunities to start doing this.

Operator

We'll take our final question from the line of Wendy Gao with CICC. Please go ahead.

Wendy Gao
Associate at China International Capital Corporation (CICC)

Okay. So hello, Martin and Michael, and congratulations to the nice results. I think I have a question about the top customer profile by region. Like can you share any something about the maybe the mix of all the top customer profile and also the relevant average order value?

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

I mean, we have shared in the past that the top customers in numbers account for close to 4% and make up close to 40% of revenue and that mix is actually quite similar across geographies. So this was true for Europe, for The Americas and for Asia and Greater China. What is true is that the average order values, particularly in Greater China, particularly in Asia, also in the Arabic Peninsula tend to be higher. So we are getting there more to four digits and above whereas across the other geographies it is three digits and the average is seven thirty six. So there is even higher appetite for some of the more expensive items, fine jewelry in the Arabic Peninsula, higher priced accessories in Asia, Southeast Asia and Greater China.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

But the percentage and the importance also driven by our focus of top customers is the same across all geography and the desire to have the latest European luxury available in those regions is also the same in terms of which brands are popular. We always shared that if you look at the top 30 brands, they are very similar. Maybe the sequence is different across geographies, but the top 30 brands are very similar across the whole world for us.

Wendy Gao
Associate at China International Capital Corporation (CICC)

Understood. And if we just talking about like with the China, you mentioned that this region is still impacted by maybe the macro on the ticket or something else. But if you look at, like, quarter by quarter, how do you think of the trend? Do you think, like, steroids will like recover a bit?

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

Yes, you're absolutely right. It's still dampened. But we do also for this region see continuous improvement, particularly in Greater China. We see that the business is improving slowly after of course quite significant contraction. We do believe it has a lot to do with the macroeconomic environment and therefore it is quite interesting and important to see what additional economic stimulus and economic programs the government will launch in China.

Michael Kliger
Michael Kliger
CEO at MYT Netherlands Parent

But at the moment, we do see a slow recovery already.

Operator

That will conclude our question and answer session in our call today. Thank you all for joining and you may now disconnect.

Analysts
    • Martin Beer
      Chief Financial Officer at MYT Netherlands Parent
    • Michael Kliger
      CEO at MYT Netherlands Parent
    • Oliver Chen
      Managing Director & Senior Equity Research Analyst at TD Cowen
    • Matt Boss
      Equity Research Analyst at JPMorgan - Equity Research
    • Blake Anderson
      Vice President at Jefferies & Company Inc
    • Grace Osadolor
      Equity Research Associate at Morgan Stanley
    • Wendy Gao
      Associate at China International Capital Corporation (CICC)
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