MYT Netherlands Parent B.V. Q3 2025 Earnings Call Transcript

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May 14, 2025
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Operator

Greetings, and welcome to Lotus Experience Third Quarter 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 Baer, Chief Financial Officer of Lux Experience. Thank you, sir. Please begin.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

Thank you, operator, and welcome, everyone, to the Luxe Experience Investor Conference Call for the Third Quarter of Fiscal Year twenty twenty five, our first investor conference call since we closed the acquisition of YOOX NET A PORTER and changed our company name to Luxe Experience to reflect the best of the combined companies. Today's call is dedicated for the fiscal Q3 results of the legacy Mytheresa stand alone business. With me today is our CEO, Michael Kieger. Before we begin, we would like to remind you that our discussions today will include forward looking statements. Any statements we make about expectations are forward looking statements and are subject to risks and uncertainties, including the risks and uncertainties described in our annual report.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

Many factors could cause actual results to differ materially. We are under no duty to update forward looking statements. In addition, we will refer to certain financial measures not reported in accordance with IFRS on this call. You can find reconciliations of these non IFRS financial measures in our earnings press release, which is available on our Investor Relations website @investors.luxexperience.com. I'll now turn the call over to Michael.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Thank you, Martin. Also from my side, a very warm welcome to all of you, and thank you for joining our call. We will comment today on the results and performance of our third quarter fiscal year twenty twenty five. We are, of course, truly excited to have completed the acquisition of Jukes Nithaprother on April 23 and to now operate the leading global luxury multi brand retail group under the name Luxe Experience. This acquisition brings together some of the most iconic brands in digital luxury retail and will generate enormous value for our customers, brand partners and shareholders.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Luxe Experience is now the preeminent multi brand group in digital luxury with combined net sales of around €3,000,000,000 Our medium term ambition is to reach €4,000,000,000 in net sales and seven percent to 9% adjusted EBITDA margin. We will provide much more details on the just completed acquisition tomorrow in a separate investor call. As we now embark on the exciting new chapter at Luxe Experian, I'm very proud to see our company in a very healthy and strong position. I'm specifically very pleased with our results in the third quarter of fiscal fiscal year twenty twenty five. With solid revenue growth and positive adjusted EBITDA, we continued to demonstrate our ability to execute well and achieve strong results on the continued macro uncertainties where other players fail.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

We are the leader in a clearly consolidating sector and continue to display the unique characteristic of profitable growth. Our improved gross margin, the strong growth of top customer spend, the outstanding high average order value and the excellent customer satisfaction all highlight the fundamental strengths of our business model. I wish to highlight today three key messages to you that make us stand out in the third quarter and demonstrate the strength of the MyTheresa business despite ongoing macro uncertainty. First, our unique focus on high spending wardrobe building luxury shoppers drove again our solid profitable growth around the world. We build a community for true luxury end users, and we create the viability with them also through unique physical experience.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Second, the strong relationship that we have with big spending water building luxury customers continues to drive the desire by luxury brands to partner with us. This gave us again access to many exclusive capsule collections and prelaunch campaigns that in turn drove our global business growth in the third quarter of fiscal year twenty twenty five. Third, our very resilient and consistent business model and execution allowed us to significantly improve many of our key performance indicators in the third quarter, Expanding gross margin, outstanding AOV and increasing top customer spend were again drivers for improving profitability in terms of adjusted EBITDA in the third quarter. Let me now comment in more detail on these three messages. First, let's look how building a global community for luxury and SUV is driving our business.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

In the third quarter, our GMV with top customers grew by plus 7.8% compared to the prior year period, underlining resilience of top customers to macro headwinds. This growth was largely driven by an outstanding increase of the average spend per top customer in terms of GMV by plus 17.9% in Q3 fiscal year twenty twenty five versus Q3 fiscal year twenty twenty four. In The United States, our business with our top customers even grew by plus 12%, driven by the impressive growth of average spend per U. S. Top customer of plus 17.8%. We mentioned already in the last quarter, our two week immersive invite only up presky experience in Aspen in collaboration with Bamilan's Bar.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

This is a great example how we are able to attract high net worth customers in The United States. Over 1,800 guests were seated over seventeen days in the pop up and over 2,300 contact details were captured with 56% registrants being new contact. Since signing up for the event, guests have generated a total revenue of €830,000 and their repurchase rate is already at 48%. Our clear ambition is to build the strongest relationships with our top customers and we therefore constantly engage with them. In the third quarter, we hosted again various events for our top customers across the globe.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Examples include Style Suites in Miami, Dusseldorf, San Francisco, New York and Hong Kong. We hosted Michelin star dinners in Houston, Washington, D. C. We invited top customers to an intimate lunch with the Kate in the Kate showroom, allowing top customers to meet with Katharine Hohstein, Founder and Creative Director of Kate as well as seeing the latest pieces from the newest collection. Together with Caroline Herrera, we welcomed top customers at the Hotel de Creon, where Creative Director Wes Gordon shared the inspiration and artistry behind his latest runway collection followed by a lunch with himself.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Moreover, we partnered again with Porsche for a driving experience in Los Angeles and for the first time with fat ice race and violating top customers to a motorsport racing experience on ice in Austria, including a cocktail moment with Spurden and Porsche. Please see our investor presentation for more details on our various top customer events. To fulfill our ambition to build a community for luxury enthusiasts through digital and physical experiences, we organize for our top customers through money can't buy experiences. In the third quarter, top customers were invited to an event with Alaia and Ven, including a dinner on the first night at the famous Harry's Bar, a private tour for the very first time in the renowned Miele's Knitwear factory in Vistenza and a beautiful dinner to conclude the event at Villa Valmarano. We hosted an exclusive dinner with the Creative Director, Christopher Esper, of the namesake brand at Lulu restaurant during Paris Fashion Week.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

We hosted a two day experience with Patou in Paris to celebrate the exclusive capsule collection for My Theresa. The first day included an afternoon tea at the private apartment of the brand's Creative Director, Guillaume Henri, followed by an elegant dinner at Brasserie Lemieux. The second day, top customers were invited to explore Paris with a curated guide to the city's hidden gems by Guillaume, concluding with an intimate lunch at Brasserie Neb. Together with Pomelato, we also hosted top customers for a two day Milan experience, including a private tour of the renowned Casa Pomelato factory, an elegant dinner at Craco in Galleria, a Pomelato showroom visit, a private guided tour of Casa Forna Fetti and a lunch at the iconic Beach Restaurant. Finally, we hosted a Texan experience with Gucci to celebrate the launch of the exclusive Gucci capsule collection in Austin.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

The afternoon started with an intimate cocktail moment with Gucci's Artistic Director, Camille Micheli, followed by a cocktail party at the famous Austin Hotel, where guests were treated to custom cowboy hat shaping, a live country music band and lively two step dance performances. In addition to providing our top customers a memorable experience, such events also create brand awareness for the Myteriza brands through global social media amplification. Please see our investor presentation for more details on these unique money can buy experience. Second, our strong relationship with such customers clearly drives the desire of luxury brands to partner. One evidence for the strong trust and support we enjoy is the recent expansion of our partnership with which allows us now to distribute PADA products globally, effectively doubling our reach and our business potential with the brand.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

The third quarter saw again many high impact campaigns and exclusive product launches that drove our global business growth with high spending water building customers. We launched exclusive women's wear and men's wear runway looks from Lueva as well as exclusive bags and accessories from the Lueva Luna New Year collection collection by Manolo Blanik for women's wear and men's wear, only available at Maiteretta. We were the exclusive prelaunch partner for Totem's T Lock clutch bags and the Totem Gardrove collection as well as Etro's SpringSummer twenty five collection. We also launched exclusive womenswear styles from Balenciaga's Summer twenty five collection and exclusive men's wear styles from Todd's SpringSummer twenty five collection. Please see our investor presentation for more details on brand collaborations in the third quarter.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Such unique offers drove the interest by wardrobe building, big luxury spenders and thereby our solid top line in the third quarter of fiscal year twenty twenty five. We grew our net sales by plus 3.8% compared to Q3 of fiscal year twenty twenty four. In the first nine months of fiscal year twenty twenty five, net sales grew by plus 8%. The United States saw similar growth with plus 3.9% in Q3 fiscal year twenty twenty five, while in Europe, Germany and The U. K, we experienced a very strong net sales growth with plus 8.1% in the third quarter compared to the prior year period.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

First, in the third quarter of fiscal year twenty twenty five, we continued to improve our business performance, thanks to our very resilient and consistent business. Martin will talk in a few minutes about the details of our bottom line results for the third quarter, but let me provide you with some key operational highlights. We achieved outstanding customer satisfaction measured by our internal Net Promoter Score that reached a record high of 86% in Q3 fiscal year twenty twenty five, demonstrating the consistent excellence of our customer service proposition. Our average order value last twelve months increased by plus 8.8% to an outstanding €753 in Q3 fiscal year twenty twenty five, demonstrating the success of our focus on selling full price high end luxury products to top customers. Furthermore, our gross margin improved by 140 basis points, which underline our successful strategy of full price selling.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Our return rates decreased in the third quarter also contributing to the strong profitability of plus 3.9% in terms of adjusted EBITDA margin. All these operational highlights serve as a testament to the fundamental strengths of our business. With all the above, it should come as no surprise that we are very pleased with our performance in the third quarter of fiscal year twenty twenty five. We see this quarter as further proof that our business can deliver profitable growth even on the ongoing macro uncertainties due to the strength of our model and consistency of our execution. This proven strength and the track record of our teams for excellent execution drives our strong confidence in creating enormous value through the acquisition of Juuk's Meta Porter.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

And now I hand over to Martin to discuss the financial results in detail.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

Thank you, Michael. As Michael already mentioned, we are very excited about our successful closing of the YOOX NET A PORTER acquisition on April 23. The closing in April falls within our fiscal fourth quarter and as such is not reflected in the reported numbers for our fiscal Q3 reporting, which covers the period from January to March 2025. For this reason, we will dedicate today's call to my Theresa's fiscal Q3 reporting. Tomorrow, on May 15, we have an additional call scheduled to provide more details on the newly formed group structure of Luxe Experience, key strategic initiatives, financial details as well as our plans and strategic direction moving forward.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

Therefore, let's talk today about our fiscal Q3 reporting ended in 03/31/2025. We're very pleased with the financial performance in the third quarter and also in the past nine months of fiscal year '20 '20 '5. In the quarter, we achieved a solid net sales growth of plus 3.8%, fully in line with our guidance. Our AOV LTM again increased plus 8.8% to a record high of €753 per order delivered. Our gross margin expansion, which we've also seen in the two last quarters, continues with now 140 basis points improvement in the quarter.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

We continued to increase our profitability with an adjusted EBITDA margin of plus 3.9% in the quarter. We also achieved positive operating cash flow of €18,700,000 with stable inventory levels compared to previous year and achieving our days inventory outstanding target of two sixty days. This underlines MyChris' unique position with a track record of profitable growth at the high end of true luxury in an overall tough market environment. I will now review the financial results for the third quarter covering January 1 through 03/31/2025 in more detail and give additional information on certain key developments affecting our performance during the quarter. Unless otherwise stated, all numbers refer to euro.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

In the first quarter, net sales grew by €8,900,000 or plus 3.8% to 242,500,000.0 as compared to €233,600,000 in the prior year quarter. GMV per all customers grew by plus 8.9%, while the GMV per top customer grew even stronger by an impressive 17.9 during Q3 of fiscal year twenty twenty five. For the first nine months of fiscal year twenty twenty five, net sales grew by plus 8% to €667,200,000 fully in line with our given top line guidance for the full fiscal year. GMV increased by €9,500,000 to €261,300,000 in the third quarter of fiscal year twenty twenty five, also a plus 3.8% increase from €251,900,000 in the prior year period. Increasing by €61 per order delivered.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

Our average order value LTM grew by plus 8.8%, now standing at a record high of €753 as compared to €692 in the prior year period. The increase in AOV strengthens our unit economics and highlights our strategy of full price selling at the high end of luxury. Our growth was well balanced worldwide with our core market Europe growing by plus 8.1% with a net sales share of 53.8%. The U. S.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

Had a share of 22.5%, Rest of World of 23.7%. In the third quarter of fiscal year twenty twenty five, gross profit increased by plus 7.2% to €108,500,000 from $101,300,000 in the prior year quarter. The gross profit margin increased by 140 basis points to 44.8% as compared to 43.4% in Q3 of fiscal year twenty twenty four. This is fully in line what we achieved in the preceding quarters. In a less competitive and discount driven market, we stay true to our strategy of a higher full price share in our curated offer and thus we were able to improve our gross profit margin.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

In the last nine months fiscal year twenty twenty five, our gross profit margin increased by 150 basis points. The shipping and payment cost ratio decreased by 130 basis points in the third quarter from 15.3% prior year to now 14% of GMV. The decrease is mainly driven by continuously improving unit economics resulting from the increase in AOV and lower return rates. The same effect is visible for the first nine months of fiscal year twenty twenty five during which the shipping and payment cost ratio decreased by 90 basis points to 13.8% compared to 14.7% in the prior year period. The marketing cost ratio increased from 9.2% to 10.2% As we continue to invest in capturing market share, we built on our successful strategy of investing marketing efforts directed towards our top customer base and brand campaigns, while maintaining efficiency in targeting high quality first time buyers.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

Throughout the quarter, we increased our marketing activities in line with this approach. The adjusted selling, general and administrative SG and A cost ratio in the fiscal third quarter stood at 13% lower what we've seen in previous quarters. In relation to fiscal Q3 of the previous year, the cost ratio increased modestly by 80 basis points from 12.2% to 13%. During the first nine months of fiscal year twenty twenty five, adjusted SG and A cost ratio decreased by 40 basis points from 14% from the prior year period to now 13.6%. In Q3 of fiscal year twenty twenty five, adjusted EBITDA increased by €500,000 to €9,300,000 from €8,900,000 in the prior year quarter.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

Adjusted EBITDA margin increased from 3.8% to 3.9% For the first nine months of fiscal year twenty twenty five, adjusted EBITDA increased significantly by €13,200,000 at an adjusted EBITDA margin of 4.3% compared to 2.5% in the previous year period, fully supporting our guidance for the full fiscal year. Depreciation and amortization remained stable at 3900000.01.5% of GMV in Q3 of fiscal year twenty twenty five compared to the previous year period. Our profitable growth is also evident at adjusted operating income and adjusted net income level. In the third quarter of fiscal year twenty twenty five, adjusted operating income was at €5,500,000 a 20 basis points increased margin at 2.3%. For the first nine months in fiscal year twenty twenty five, operating income was at €16,600,000 a 2.5% margin with a significant improvement to previous year.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

We also delivered positive adjusted net income in the quarter at €5,400,000 And for the first nine months of fiscal year twenty twenty five, adjusted net income was at €21,400,000 at a 3.2% margin, also significantly improving from last year. Let's take a look at the cash flow statement. During the third quarter of fiscal year twenty twenty five, we achieved a positive cash flow from operating activities of plus €18,700,000 compared to minus €11,600,000 in the previous year quarter. This is a €30,300,000 positive cash swing driven by effective working capital management. For the first nine months, operating cash flow only used up €13,900,000 compared to €26,400,000 in the prior year period.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

This is mainly driven by our careful management of inventory levels. Our inventories stood at €372,800,000 fully stable compared to the beginning of the fiscal year and despite a 8% net sales growth in the first nine months of fiscal year twenty twenty five. As of 03/31/2025, our days inventory outstanding were right at our long term target of two sixty days. Cash flow from investing only used up €600,000 in the quarter and only €2,300,000 in the first nine months of fiscal year twenty twenty five. The heavy investments in our new tech platform and the move to a new central warehouse, all have been completed successfully.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

And we're now returning to our expected long term CapEx average of below 1% of GMV. We ended the quarter with €14,200,000 cash at hand and a €25,000,000 cash utilization of our €75,000,000 revolver. The solid financial performance in the third quarter of fiscal year twenty twenty five is fully in line with our expectations and supports our given guidance for the full fiscal year on all levels. The new tariff situation and especially its impact on customer sentiment and the global economy still remains unclear. We therefore, for the full fiscal year ending 06/30/2025, expect the lower end of our given guidance of GMV and net sales growth between 713% for the legacy Mytresa standalone business.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

Given our continued focus on profitability, we confirm our guidance on adjusted EBITDA margin between 35%. The acquisition of YOOX NET A PORTER in the fourth quarter of our fiscal year 2025 is expected to add another 300,000,000 to €350,000,000 net sales and an adjusted EBITDA loss of €20,000,000 to €30,000,000 to the legacy MyTriisa stand alone business fiscal year 2025 numbers ending on 06/30/2025. With all of the above, it comes as no surprise that we are very confident in the continued success of MyTriza business as a cornerstone of our new luxe experience group. With the successful closing of the acquisition of YOOX NET A PORTER, we are very excited for the medium and long term outlook of the combined business. With our proven ability to execute and to show strong results, we reconfirm our medium term outlook for the combined business to achieve €4,000,000,000 net sales and an adjusted EBITDA margin of seven to 9%.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

In our tomorrow's call, we will provide more details on our exciting journey ahead and therefore would welcome very much your participation in tomorrow's call on Luxe experience. And with that, I hand over to Michael for his concluding remarks.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Thank you, Markus. We are very pleased with our third quarter fiscal year twenty twenty five earnings results. We have seen a continued performance improvement in this quarter with this strength and consistency of our business model, we see ourselves well positioned for any further macro uncertainties. We continue to focus on building a community for true luxury enthusiasts worldwide and creating desirability through digital and physical experiences. We see ourselves as well prepared for the formation of Luxe experience and the transformation of the combined business to the world's leading multi brand digital luxury platform, creating significant value for our high end customers, brand partners and Shell.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

And with that, I ask the operator to open the line for your questions.

Operator

Thank you. Ladies and gentlemen, we will now begin the question and answer As a reminder, we'll ask everyone to speak to one question and one follow-up so we can take as many questions as possible. Thank you. The first question comes from the line of Oliver Chen with TD Cowen. Please go ahead.

Katy Hallberg
Vice President at TD Cowen

Hi there. This is Katie on for Oliver Chen. I'd like to ask a question about the 4Q sales guidance and what's assumed for the legacy MyTeresa business. I know you spoke to sales sort of at the lower end of the original fiscal year guidance. Can you talk through your assumptions for the consumer health and consumer reaction to the current environment and how that's derived from any trends you saw during the quarter or even quarter to date?

Katy Hallberg
Vice President at TD Cowen

And then what's assumed for both pricing as well as sort of the number of orders? And then I'll have a follow-up. Thank you.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Thank you. I'm happy to give a bit of insight on the assumptions, but of course, mathematically, it is pretty clear if we assume that we believe we're at the lower end. I think the biggest challenge at the moment looking at Q4 is, of course, understanding how further decisions by the administration would influence, consumer sentiment. We have seen a lot of decisions at the April. Some of them were reversed. We saw very positive development on Monday. So we, at the moment, expect a slower demand in the first and last quarter based on uncertainty, particularly in the North American market.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

As we highlighted today in our call, the strongest region in Q3 was Europe with 8%. U. S, North America used to be the strongest region. So that's where feel uncertainty, and therefore, is warranted, as we simply don't know. I mean, how new changes would influence our business model of sending products through customs into North America.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

So current decreases for China made a China tariffs upgrade. There was a report that the de minimis would be abolished. So these are all factors which we don't have specific assumptions other than we feel we expect further uncertainties, and that has dampened demand effects. I don't know, Marcin, do you want to add anything?

Martin Beer
Managing Director & CFO at LuxExperience B.V.

Yes. I mean, but you picked up the growth assumption for Q4, right? I mean, mathematically just easily done. I mean, fiscal year to date for the first nine months, we grew 8% net sales. So if we guide to the lower end of the 7% to 13% top line growth that would imply that we are that we expect to grow in Q4, obviously, at a low rate, percent to 7% in Q4 to arrive at the lower end of the top line guidance.

Katy Hallberg
Vice President at TD Cowen

Okay. And then just as a follow-up to that, how you're thinking about the pricing and if you've seen any different changes in pricing versus the number of orders placed? And then as you think about gross margin, you know, what were really the the most significant drivers to the gross margin improvement in q three?

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

So on pricing, I think we always have to consider the lag effect in our industry. I mean, we are currently selling spring summer. So we do understand that some brands are looking at price increases, some brands have done price increases, but that will most affect fall retail merchandise, which is arriving, but the current season is spring summer, which has price decisions that were taken months ago. So that's on that part. And gross margin, the biggest influence of gross margin is food price selling.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

How high is the share of food price? That's the biggest driver for further margin improvements that we expect.

Katy Hallberg
Vice President at TD Cowen

Very helpful. Thank you.

Operator

Your next question comes from the line of Matthew Boss with JPMorgan. Please go ahead.

Matt Boss
Matt Boss
Equity Research Analyst at JP Morgan

Great. Thanks. So Michael, maybe larger picture, how do you see the luxury industry position today just given the dynamic economic backdrop? And maybe near term, just based on the changes in sentiment that you cited, have you seen any direct impact on spending to date so far with your core high net worth customer base, whether it was April or May, in The U. S.

Matt Boss
Matt Boss
Equity Research Analyst at JP Morgan

Or Europe? Or is your guidance change more reflective of just the prudent potential that we could see a softening effect?

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Thank you, Matt. No, I think this is really influenced by the short term impact that we have seen. It's a it's a it's a multi faceted game. Mean, as you know, a lot of our customers are managers, company owners, so a lot of these have kept them busy. I'm not in a position to say, oh, fundamentally, something in the market has changed.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Was there something broken by these decisions? I don't see that. Have have these decisions over the last couple of weeks, really created uncertainties? Definitely. And and and as always in in the consumer game, stability is the key.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

If the new number is X, but that is a guaranteed new number, companies can adopt to it, consumers can adopt it. We have unfortunately seen more the numbers change all the time. So at the moment, we are cautious, but we have also seen that the mood has dampened. But I don't see at the moment any concerns that something has changed in the luxury industry.

Matt Boss
Matt Boss
Equity Research Analyst at JP Morgan

Okay. Great. And then, Martin, just maybe relative to this year's guidance for 3% to 5% adjusted EBITDA margins for the legacy MyTheresa business, what would be the time line that you see for profitability to return back to the high single digit EBITDA margin that you realized pre pandemic?

Martin Beer
Managing Director & CFO at LuxExperience B.V.

Yes, Matt. I mean, we always said that in the medium term, want to go back to the 7% to 9%, and we will go back. The question is the key determining factor of this reversal we always mentioned is the continuous improvement in the gross profit margin that we saw in the last two quarters that we also see in this quarter, 140 basis points in the quarter. In the last nine months, one hundred and fifty basis points. So we are right on track in improving the overall adjusted EBITDA margin.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

And you also pointed out in the call, the higher AOV, lower return rates all increase unit economics and also help on the, for example, shipping and payment cost ratio. And for this, we expect a continuous improvement in the bottom line and as our core focus stays on improving the profitability levels that we have showed in the last quarter. So with I mean, given the uncertainty in the top line, obviously, has some effect on the profitability, but we explicitly kept the 3% to 5% bottom line guidance because the focus is on maintaining and improving the bottom line profitability and all the underlying business elements of our business model are fully intact on the journey to improve the bottom line profitability to improve the adjusted EBITDA profitability. How and when we will come back to the 7% to 9%? This is in the medium term, and we will continue this trajectory.

Martin Beer
Managing Director & CFO at LuxExperience B.V.

And then in our September call, we'll give the guidance for the next fiscal year, fiscal year twenty twenty six. And at that time, we'll also have a much better visibility on the overall macro situation that obviously is also a key driver. But the driving force is to continue to improve the bottom line profitability, fully intact, and we will strongly continue to follow that path to the 7% to 9%.

Matt Boss
Matt Boss
Equity Research Analyst at JP Morgan

That's great color. Michael, just one quick follow-up. On the dampening that you cited, have you seen that both in The U. S. And in Europe?

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

More so in The U. S.

Matt Boss
Matt Boss
Equity Research Analyst at JP Morgan

Great. Best of

Operator

The next question comes from the line of Ashley Helgeschol with Jefferies. Please go ahead.

Blake Anderson
Vice President at Jefferies & Company Inc

Hi. This is Blake on for Ashley. Thanks for taking our questions. So just wanted to build on that last one in terms of The U. S.

Blake Anderson
Vice President at Jefferies & Company Inc

Performance. Could you break out at all by providing a little bit more color on sales trends by month and then, aspirational versus your top customers in The US? Would be great to get a little bit more color there if you could.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Yeah. Easy on the on the on the on the second one, Blake. Our top customer group in The US in the last quarter, our business grew even by slightly roughly 12%. So that business is intact. It's a third of as we have seen in the past quarters.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

It's always the lower medium and that was hit and uncertainty hit it again. That's where it's happening. The resilience on the top side, the resilience on the ultra top is fully intact. With these shocks that you see, with these shocks that, let's say, the equity markets took this time, The aspirational, the occasional customers not speaking to their else, just speaking to their spending patterns are always impacted more so. And so it's an even deeper polarization.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

But again, what we have observed seems to us a snapshot seems to us an immediate knee jerk reaction to this as we have seen over the last weeks. There has been some reversal of it, but I will not position to predict in which way we will go from here. And so on a month by month basis, it has started January and and and then you get peaks with events. I mean, like, we are really in an eventful moment and the stock market, but it's also macro crisis in regions. I don't know.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

It's almost impossible to predict. But that does not take anything away, as you can see from our numbers, the fundamental strength. I mean, in a reversal, look at what is happening and we can confirm our profitability. We can confirm margin improvement. We can confirm cost control.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

So while the top line is not fully controllable, our business model allows us to control our bottom line.

Blake Anderson
Vice President at Jefferies & Company Inc

That's super helpful. And just to follow-up on that, I wanted to I wanted to ask on gross margin specifically, and you kinda just referenced the ability to still grow margins and maintain profitability. But how should we think about in an environment where maybe the aspirational customer slows down? Can you still grow gross margins, or how much incremental promotions do you see yourself doing? Wondering how you think about your target of maintaining gross margin expansion versus maybe leaning into promotions or any other headwinds that you might foresee that would limit that ability.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

No. We are absolutely able to further increase margin. I mean, the pace and the size of it, we won't guide now, but we absolutely have the ability to further improve our gross margin.

Blake Anderson
Vice President at Jefferies & Company Inc

Got it. And then last one, was just wondering if you had any more color on your exposure to brands that are manufactured in China, maybe how that is impacting your business. I don't know if you could talk anymore about indirect versus direct tariff impacts and maybe China exposure specifically.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

Well, I mean, we had different tariff impacts. One is, of course, that there is a flat increase by 10% for product going into The U. S. And then, of course, made in China has very high, and they were not reversed. They're still in place.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

On Monday, my understanding is they there was a decision to reduce them for the moment, which is, again, this uncertainty. It's not clear if this is now permanent or not. We don't have a huge chunk of made in China in dresses and contemporary brands. We do have brands that have manufacturing in China. Most of our products are not only sourced in Europe, but also manufactured in Europe.

Michael Krieger
CEO & Managing Director at LuxExperience B.V.

And therefore, there is an impact on The U. S. Channel and there is an impact for product made in China. But that impact is at this stage controllable. Obviously, duty rates, which we had at 140%, you cannot pass that along. That effectively means you cannot sell the product.

Blake Anderson
Vice President at Jefferies & Company Inc

Really appreciate the color. Best of luck.

Operator

And it seems that we have no further questions for today. That concludes the Q and A session in today's conference call. We thank you for your participation. You may now disconnect your lines. Have a pleasant day, everyone.

Analysts
    • Martin Beer
      Managing Director & CFO at LuxExperience B.V.
    • Michael Krieger
      CEO & Managing Director at LuxExperience B.V.
    • Katy Hallberg
      Vice President at TD Cowen
    • Matt Boss
      Equity Research Analyst at JP Morgan
    • Blake Anderson
      Vice President at Jefferies & Company Inc
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Key Takeaways

  • Completed the acquisition of YOOX NET-A-PORTER and rebranded as Luxe Experience, forming a leading multi-brand digital luxury group with combined net sales of around €3 billion and medium-term targets of €4 billion in net sales and 7–9% adjusted EBITDA margin.
  • Legacy Mytheresa net sales grew by 3.8% in Q3 and by 8% in the first nine months, driven by robust performances in Europe (+8.1%) and the U.S. (+3.9%).
  • Operational metrics improved significantly in Q3 with a record average order value of €753 (+8.8%), gross margin expansion of 140 basis points to 44.8%, lower shipping and return costs, and a 3.9% adjusted EBITDA margin.
  • High-spending top customers remained resilient, with GMV per top customer up 17.9% overall and 17.8% in the U.S., supported by exclusive events and partnerships to deepen loyalty amid macro uncertainty.
  • For fiscal 2025, legacy Mytheresa guidance targets 7–13% net sales growth and a 3–5% adjusted EBITDA margin, while the YNAP acquisition is expected to add €300–350 million in sales but incur a €20–30 million adjusted EBITDA loss.
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Earnings Conference Call
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