LuxExperience B.V. American Depositary Shares, each representing one Ordinary Share

It is now my pleasure to introduce your host, Martin Beer, the Chief Financial Officer of LuxExperience. Thank you, sir. Please begin.

Thank you, operator, and welcome everyone to the LuxExperience investor conference call for the first quarter of fiscal year 2026. With me today is our CEO, Michael Klieger. Before we begin, we'd like to remind you that our discussions today will include forward-looking statements. Any comments we make about expectations are forward-looking statements and are subject to risks and uncertainties, including the risks and uncertainties described in our annual report. Many factors could cause actual results to differ materially. We are on 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-IRFS financial measures in our earnings press release, which is available on our investor relations website at investors.luxexperience.com. I will now turn the call over to Michael.

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 at the first quarter of fiscal year 2026 of LUX Experience. As a group, we have now become the clear digital multi-brand leader for luxury in Syria worldwide. We are perfectly positioned to benefit from the expected further growth of the digital luxury market as well as from the ongoing consolidation process among the remaining players. As explained last time, Lux Experience reports on the basis of a new segment reporting structure. The three segments are Luxury MyTheresa, Luxury Net-a-Porter and Net-a-Porter, as well as Off-Trade. We are very pleased with the results of the first quarter. Across all three segments, we have delivered strong results and improvements. MyTereza continues to demonstrate our unique ability to deliver strong growth and profitability despite ongoing macro headlifts. Net-a-Porter and Mr. Porter clearly show the first signs of the commercial turnaround, which will drive renewed growth and profitability for the two store brands after years of decline. In the off-price segment, we anticipated a fundamental transformation by focusing on the healthy core, and I am pleased that we have been off to a fast start here also. We just announced that we have reached an agreement to sell the assets powering the outlet platform to the O-Group LLC. Shareholders of the O-Group LLC include Joseph Ellery and Ritesh Punjabi, CEO of Timeless Group of Companies. Both are renowned experts in the off-price luxury fashion sector. The divestment of the outlet assets is a strategic step in line with our transformation plan announced in May 2025. which strengthens the operating model by reducing complexity. We believe that we found a great new home for the Outnet and we can now fully focus on the transformation of the UX business and the disentanglement of off-price from the luxury businesses in the backend. This will allow us to also accelerate the buildup of an efficient infrastructure platform for NetApp OT and Mr. Poulter. The closing of the transaction with the O-Group is expected through Q1 of calendar year 2026, subject to certain closing conditions, including customary regulatory approvals and payment of the purchase price, which is subject to adjustments based on inventory levels at closing. As a result of the transaction, the off-price segment will purely refer to the business of UX from now on, while we classify the OutNet as discontinued operations as it is no longer considered part of our core financial performance. Let me now start by commenting on the MyTheresa business. We are extremely pleased with the outstanding results in the first quarter of fiscal year 2026. The ongoing and even accelerating momentum in the previous quarters demonstrates the strengths of our business model, which focuses on wardrobe building, big spending, luxury customs. In Q1 of Fiske Year 2026, we grew our net sales by plus 12.2% compared to Q1 Fiske Year 25. In the United States, which is a key market for our business, net sales growth reached plus 21.9% in Q1 fiscal year 2026 compared to Q1 fiscal year 2025. The US accounted for 22.1% of the net sales of our total business in the first quarter. In Europe, excluding Germany, we experienced again an excellent net sales growth of plus 14.1% in Q1 fiscal year 2026. Our clear focus on big-spending, world-building customers is the fundamental driver of our outstanding growth and financial strength at MyTheresa. In the first quarter of fiscal year 2026, the top customer base at MyTheresa grew by plus 10.2% compared to the prior year period, significantly higher than in previous quarters. Furthermore, the average spend per top customer insurance at GMV grew again by a very strong plus 15% in Q1 fiscal year 26 versus Q1 fiscal year 25. The average order daily last 12 months for Maite Reza increased by a remarkable plus 10.7% to a record 797 euros in Q1 fiscal year 26. demonstrating the success of our focus on selling full-price, high-end luxury products to top customers. The continued full-price focus at MyTheresa is also evident with the again improved gross profit margin growing by 70 basis points in Q1 2016. Our success with big spending wardrobe building customers makes MyTheresa a highly desired partner for luxury brands. In the first quarter of fiscal year 26, we saw again many high-impact campaigns and exclusive product launches, underlining Maite Reza's strong relationships with luxury brands. We launched exclusive styles from the Loewe Fall Winter 25 runway collection for womenswear and menswear, only available at Maite Reza, as well as an exclusive womenswear Max Mara cashmere capsule collection only available at MyTheresa. We were the exclusive pre-launch partner for Brunella Cucinelli's Fall-Winter 25 collection and Calvin Klein Collection's Fall-Winter 25 collection for womenswear and menswear. We also launched exclusive womenswear styles from Moncler's Fall-Winter 25 collection as well as exclusive styles from God's True Kashmir and Venya's Fall-Winter 25 collection. In addition to creating desirability for our top customers with exclusive digital campaigns and product launches, we also create desirability and a sense of community for MyTheresa's top customers through unique money-can-buy physical experiences. In the first quarter, we hosted various top customer events, including a private diamond masterclass and a tailored styling session with Jessica McCormack at her Mayfair townhouse in London. Together with Givenchy, we celebrated Sarah Burpee's debut runway collection with a curated cocktail reception, a private exhibition tour, and an intimate dinner in Shanghai. She hosted a top customer cocktail in Madrid at the Rosewood Hotel and also held an exclusive Schiaparelli style suite there. To celebrate London, Milan, and Paris Fashion Week, we invited top customers to various shows to experience the magic of one-way firsthand. Furthermore, we hosted style suites in London, the Hamptons, New Jersey, Singapore, Hong Kong, Warsaw, Frankfurt, and Zurich, presenting new collections in an immersive, curated environment. Highlights in the United States included intimate dinners with Michelin-starred chefs in Aspen and Los Angeles. We hosted a New York Fashion Week after-party at the legendary Indochine with Calvin Klein collections. We partnered with Loewe for an exclusive event at the Glass House in Connecticut showcasing the brand's exclusive collection inspired by Joseph and Annie Albers, followed by an intimate dinner by chefs Riyad Nazar and Lee Hansen of Franchette. Furthermore, we hosted an exclusive two-day experience with Zegna in Turin, featuring an on-stage dinner with a private opera performance at Teatro Reggio, and next day, a lunch at the famous Ristorante del Cambio. In summary, we are extremely pleased with the MITRE business in the first quarter of fiscal year 26, and Martin will later show how the outstanding top-line results translated into very strong bottom-line results. Let me now comment on the luxury segment comprised of Net-a-Porter and Mr. Porter. In the first quarter of fiscal year 26, we clearly saw the first signs of the commercial turnaround directly resulting from the execution of a strategy that focuses on luxury customers seeking editorial inspiration and brand discovery, as well as a strict focus on full price selling. In Q1 fiscal year 26, net sales declined as expected by minus 10.8% versus Q1 fiscal year 25 for Net-a-Porter and Mr. Porter combined. The United States declined by minus 10.7%, and Europe, excluding the UK and Germany, by minus 3.6% in terms of net sales in Q1 fiscal year 26 compared to Q1 fiscal year 25. The net sales decline is still driven by too little investments into attractive new merchandise a year ago for the current fall-winter season. For the next spring-summer season, we can already see improved results. While the overall net sales declined for Net-a-Porter and Mr. Porter combined, the average spend in terms of GMV per EIP customer, the so-called extremely important people, customers, grew by plus 4% in Q1 fiscal year 26 versus Q1 fiscal year 25. The average order value last 12 months increased by a remarkable plus 15.5% to 836 euros for Net-a-Porter and Mr. Porter combined in Q1 fiscal year 26. Finally, the gross profit margin improved by 130 basis points in Q1 fiscal year 26 for Net-a-Porter and Mr. Porter combined, driven by a higher share of full price sales amongst other factors. All these KPIs indicated an already much healthier business. In the first quarter of his year 26, a renewed focus on high-impact campaigns and exclusive product launches was successfully initiated for Nekapote and Mr. Porter with a clear focus on luxury customers. Looking for editorial inspiration and brand discovery, Nekapote launched an exclusive capsule with Jimmy Hsu focused on key boot styles for fall-winter 25. Meta Petit also launched an exclusive colorway of the iconic Cloué Paddington bag, which drove outstanding media engagement with audiences, as well as an exclusive on-trend animal print Mimilotan bag. all drove commercial success and increased brand awareness at the destination for fashion discovery. Mr. Porter launched the for Winter 25 collection, the exclusive pre-launch for EIP customers. Mr. Porter also launched 13 exclusive styles from the collection, and Mr. Porter both launched and Leon Door as a new brand, each with exclusive capsule collections. Further new brand launches at Net-A-Porter include Eleventi Apres C, Morjas, and Satoshi Nakamoto. Net-A-Porter also continued to drive outstanding customer engagements through unique editorial content. The Oscar-nominated actress Emily Blunt was the cover star of Porter magazine, marking the most engaged Porter cover in the last 12 months. September also saw Netta Porter present season 10 of the Incredible Woman podcast series, celebrated as a private event in London, hosted by international model, actress, and campaigner Adewa Aboa. Mr. Porter's journal feature on Walton Goggins drove 14,500 visits to the journal section, while its video attracted 390,000 views on Instagram Reels. It was featured in media outlets, including People magazine and The Hollywood Reporter. Partnering with such talent has proved effective in reaching new audiences enhancing brand visibility, and driving traffic to the Mr. Porter site. Mr. Porter's film, with actor Adam Brody modeling key design items, has had 593,000 views. Net-A-Porter created a number of unique experiences for its VIPs, including a dinner in London, celebrating 25 years of Net-A-Porter, to which top clients who have shopped with the brand for the last 25 years were invited. And throughout the new runway collections, Mr. Porter hosted EIP dinners for its customers in all four Fashion Week cities, New York, London, Milan, and Paris. Mr. Porter hosted dinners in both New York and Hong Kong for high-profile EIP customers. It also invited to a dinner in London to celebrate its collaboration and exclusive capsule with Drace. In attendance were press influencers and EIP. A share of the proceeds from the capsule collection were donated to the Mr. Poulter Charity Health and Mind, which runs in partnership with Moderna, which supports men's mental health. Fifth story. and Capsule Collection had the highest click-through rate from the homepage to product seen this quarter. Already, we can see that the new leadership team at Net-a-Porter and Mr. Porter is driving the creation of much healthier and resilient business model to regain financial strength and growth. Martin will later comment on the progress achieved in improving the profitability of the Net-a-Porter and Mr. Porter luxury segments. Lastly, let me comment on Jukes' standalone performance in Q1 of the year 26. We are pleased with the progress that we have achieved to separate the Jukes business from the luxury of YNAM. The sale of the out-net assets will allow us to accelerate the process of separation of all. To create a lean business model that is compatible with the lower margin and lower average order value of price business, we are focusing the youth's business on the healthy core in terms of geography and operational fulfillment models. The closure of the marketplace business Warehouses and B-buy in Hong Kong, as well as the optimization for higher tariff rates shipping to the United States, causes a deliberate net sales decline in the short term, but will allow to return to solid profitability. In Q1 fiscal year 26, net sales declined as expected by minus 16.5% versus Q1 25. Europe, including Germany, increased by plus 1.7% in terms of net sales from Q1 50 or 26 compared to Q1 50 or 25. The overall net sales decline is, as explained, mainly driven by a renewed focus on a healthy core for the VIX business. While the overall net sales declined for VIX, The top spending customer average spend in terms of GMB grew by plus 4.7% in Q150 at 26 versus Q150 at 25. The average order value last 12 months increased by a remarkable plus 17.8% to 256 euros per year in Q150 at 26. Finally, the gross profit margin increased by 400 basis pounds in Q150 at 26 for use compared to the prior year period driven mostly by last year effects and also a higher share of past price sales. All these KPIs indicate a clear focus on the healthy part of the customer base. As part of the transfer of the output assets to the A group, Lux Experience will, for a certain period after closing, provide certain operational IT services all priced at cost level to the buyer. Latest by the end of calendar year 26, all services and activities in relationship to the outlet will have stopped for Lux Experience, significantly reducing the complexity in the group. And now, after having reviewed the good commercial results, and improvements across all businesses, I hand over to Martin to discuss the financial results in detail.

Thank you, Michael. As Michael outlined, we were able to successfully find a new home for the outnet. Just to highlight the financial implications, the outnet assets will be transferred at closing with an expected cash consideration at 30 million US dollar, depending on inventory levels at closing. Closing of the transaction is expected in the first quarter of calendar year 26. In line with IFRS requirements, we will report the outlet already in this Q1 of fiscal year 26 as discontinued operations, as it is no longer considered part of our core financial performance. The off-price business is now fully focused on use. and we adjusted our reporting accordingly. Therefore, with our fiscal Q1 reporting running from July to September 25, we will report quarterly results along our three business segments, Luxury My Teresa, Luxury Net-a-Porter, and Mr. Porter, and Off-Price Business of Jukes, and highlight specific developments that influenced each segment's performance. Following that, I will review consolidated financial results for LuxExperience at group level, and give an update on guidance, now excluding the outlet. Unless otherwise stated, all numbers refer to Euro. Let's first review the performance of our Mitresa business. During the first quarter of fiscal year 26, GMV grew by 13.5 percent to 245.9 million, compared to the prior year period. Net sales also grew double digit to $226.3 million, representing a plus 12.2% increase. We continue to take share in an overall soft market. In Q1 of fiscal year 26, myTheresa's gross profit margin increased by 70 basis points to 44.6% as compared to 43.9% in the prior year period. Main driver was our continuous effort to increase the full price share. In Q1 of fiscal year 26, the shipping and payment cost ratio increased by 110 basis points to 14.6% as compared to 13.5% in the prior year quarter. The increase is mainly due to the new U.S. tariff situation. As we pay all duties for our U.S. customers, the cost increase for us is reflected in our shipping and payment cost ratio. If you excluded the duties cost, the shipping and payment cost ratio in relation to GMB decreased by 90 basis points from 8.8 percent to 7.9 percent in Q1 fiscal year 26. Main drivers of this improved cost ratio were higher AOVs and lower negotiated shipping fees based on increasing group volumes. With these measures, we limited the effect of increased U.S. customs duties and the quarter to 110 basis points, increase in our shipping and payment cost ratio. and mostly compensated the increase with the above-mentioned 70 basis points increase in our gross profit margin. The net effect of U.S. Customs and the combined view of the increased shipping and payment cost ratio and the increasing gross profit margin was therefore mostly compensated and overall not significant. In Q1 of fiscal year 26, the marketing cost ratio decreased by 110 basis points to 10.4%. We are successfully capturing market share, but are mindful of the overall soft market situation. As targeted, we will increase marketing spend throughout the remaining fiscal year if deemed effective. Also, the selling general administrative SG&A cost ratio decreased by 110 basis points to 12.9 percent compared to the prior year quarter. SG&A expenses increased by 4.7 percent compared to the previous year quarter, and the cost ratio benefited from the strong top-line increase. Subsequently, the adjusted EBITDA margin expanded by 210 basis points during the quarter to 3.5% as compared to the 1.4% in the prior year period. Adjusted EBITDA grew by 5 million to 7.9 million in Q1 of fiscal year 26. Q1 profitability in the previous year was very low. And given the cost developments just mentioned, we expect profitability levels at MyTresa in the remaining quarters in this fiscal year 26, transition year, to be at previous year profitability levels. Inventory levels at MyTresa are up 4% compared to previous year, despite double-digit growth. Let me now comment on the luxury net apparté and Mr. Porter's segment in more detail. In the first quarter of our fiscal year 26, GMV and net sales decreased by minus 10.8 percent to 224.5 million and 212.3 million respectively. The anticipated top line decrease was fully in line with our expectations and due to lower merchandise order volumes from previous year. The new leadership is working on adjusting upcoming season's buying volumes and aligning subsequent marketing strategy to re-embark on top-line growth again. We expect to see first signs on GMV growth in the second half of this fiscal year. The gross profit margin in Q1 increased by 130 basis points from 46.5% to 47.8%, with the increase influenced by a higher share of full-price sales and one-time effects in the previous year. More focus of our transformation plan is to bring down the SG&A cost ratio. SG&A expenses in Q1 of fiscal year 26 decreased by minus 4.2 million or minus 6.8 percent compared to the last quarter, which was Q4 of fiscal year 25, running from April to June 25. Compared to the first quarter of previous year, SG&A expenses decreased by minus 6.6 million or minus 9.7 percent if you included IT development costs that were capitalized last year. As this is the first quarter of fiscal year 26, we will see more significant effects throughout fiscal year 26 and fiscal year 27. With the top line decrease of minus 10.8% in GMB in the quarter, the SG&A cost ratio increased marginally by 30 basis points compared to the previous year quarter, including capitalized IT development costs in the previous year quarter. Overall, the SG&A cost ratio on the quarter is at 27.6 percent of GMV compared to 12.9 percent at Mitresa. We will continue to bring down this more than 1,000 basis points difference with adjusting the operating model, the IT replatforming, corporate overhead cost savings, and re-embarking on top-line growth. Given the top-line decrease of minus 10.8 percent GMV in the quarter, 9.3 million less gross profit was generated. With the other cost lines in line with our expectations, the adjusted EBITDA margin in the quarter was at a negative minus 6.9 percent, below the adjusted EBITDA level at MyTresa. The new leadership teams at Net-a-Porter and Mr. Porter are in the middle of refining and investing in our buying and marketing efforts to set Net-a-Porter and Mr. Porter on a growth trajectory again while focusing on profitability. With the execution of our transformation plan and bringing down the SG&A cost ratio We expect the NAB-Mr. P segment to achieve comparable profitability levels to the Mitresa segment with a targeted adjusted EBITDA margin of 7 to 9 percent median term. We expect NAB-Mr. P to break even on adjusted EBITDA margin level already in fiscal year 2017. Inventory levels at Net Mr. P are down minus 8.8% to previous year with a healthy old season share at targeted levels and in line with the situation at Mitresa. Let me now review the financial performance of the off-price business of Jukes. Continuing the path of a more comprehensive restructuring effort at Jukes and with focus on profitable customer cohorts, GMB and net sales in Q1 of fiscal year 26 declined by 19.3% and 16.5% respectively to 118.6 million GMB and net sales in the quarter, also driven by the deliberate shutdown of the unprofitable Ux marketplace, which had a GMB of 4.6 million in Q1 fiscal year 25. Jukes' gross profit margin increased by 400 basis points from 32.6% in the prior year period to 36.5%, mostly driven by previous year destocking initiatives. Our focus of our transformation plan is to bring down the SG&A cost ratio also at Jukes. At Jukes, SG&A expenses in Q1 basically at 26, decreased by minus 6.2 million or minus 15.5% versus Q1 of previous year if you included all the IT development costs in previous year on a standalone basis. With the carve out of the outnet from off-price and reporting it as discontinued operations we excluded all p and l effects that were directly attributed to the outlet and will fall away subsequently certain cost elements in corporate and tech will not fall away with the sale of the outlet and therefore increase the cost share for yukes and the group with reporting the outlet as discontinued operations 3.6 million sgna expenses from the outlet were allocated to Jukes already in this quarter. The Outnet had net sales of 41 million in Q1 of fiscal year 26. At Jukes, the SG&A cost ratio was at 28.6 percent of GMV. We will continue to bring down the SG&A cost ratio with significantly simplifying the operating model subsequent IT downsizing, corporate overhead cost savings, and re-embarking on top-line growth. During the first quarter of fiscal year 26, the adjusted EBITDA margin was at minus 18.1% in line with expectations in our transformation plan. With the execution of our defined transformation measures, we expect to return to adjusted EBITDA profitability of use. in 15 to 21 months and return to top line growth already in fiscal year 27. Inventory levels at Jukes are minus 13% to previous year in line with our targeted inventory strategy at Jukes. Now that we have reviewed the performance of our individual segments, let's take a look at how these results translate into our group-level financials for LuxExperience. In Q1 fiscal year 26, group GMV amounted to $588.9 million, while group net sales were at $557.2 million. GMV and net sales declined by minus 4.3% and minus 4.2%, respectively, as compared to illustrative levels in Q1 fiscal year 25, excluding the out net. Adjusted EBITDA on group level stood at minus 28.1 million, with an adjusted EBITDA margin of minus 5%. Top and bottom line. of the Lux Experience Group are at expected levels for Q1 of fiscal year 26, excluding the OutNet. At the end of Q1 fiscal year 26, and excluding the inventory of the OutNet, group inventory stood at 1 billion, 18 million. Operating cash flow of the Lux Experience Group was at minus 146.4 million, driven by phasing seasonal and one-time effects excluding the one-time effects we had around minus 40 million negative operating cash flow one-time effects relate to restructuring expenses phasing of accounts payables and custom drawback receivables negative cash flow in the first quarter is typical due to seasonal inventory buildup For the full fiscal year 26, we expect operating cash burn to stay well below 200 million, given fiscal year 26 as the key transition year for our transformation plan. We are executing our transformation plan on a fully funded basis with total cash outflow during all years of the transformation plan to range between 350 and $450 million. We expect to break even on operating cash level in two to two and a half years. The group ended the fiscal year with a cash position of around $460 million and additional access to revolving credit facilities of $200 million. of which 42.2 million were utilized end of Q1 fiscal year 26. Lux Experience has a strong balance sheet with 1.7 billion of current assets, mostly inventories and cash, almost no bank debt, and an equity ratio of 60 percent. The integration of the YNAF finance teams and formation of all LexExperience group structures have started early and are progressing very well. Key activities included a new group-wide organization and governance setup, an integrated finance consolidation and IFRS 16 tool, new segment reporting, unified accounting, and reporting policies with transparent cost center structures to enable accountability and cost savings, and a highly efficient and effective finance group team setup. The statutory and group audits of fiscal year 25 under strict DCAOB guidelines were successful, and we filed our 20FS plan on October 30, 2025. We are in an ideal position to execute our transformation plan to deliver sustainable growth and profitability supported by our strategic initiatives across our segments. With our continued success at MyTheresa, we have proven that we are the best execution team and global digital luxury. The new leadership teams at Net-a-Porter, Mr. Porter, and Jux have begun their work, and at group level, we are in the midst of implementing the measures of our transformation plan. Given our agreement to sell the assets powering the outlet, we would like to provide an updated guidance for fiscal year 26 that reflects the new structure of our Lux Experience Group. The new guidance takes into consideration the anticipated financial impact of the transaction and reconfirms our guidance for the other business and seconds. We remain committed on the full execution of the transformation plan, which includes operational adjustments, technology platform integration, and organizational alignment. As communicated, fiscal year 26 will be our key transition year. For fiscal year 26, we expect luxury experience GMB at around 2.4 to 2.7 billion, and an adjusted EBITDA margin between minus two and plus one percent. We expect Mitresa to go mid to high single digits in the full fiscal year. Natapoté Mr. Porter will show growth in the second half of the fiscal year but a decline by low single digits for the full fiscal year. NUX will continue to adjust the revenue base downwards but at a lower extend in the second half of the fiscal year. Our medium-term targets remain unchanged at adjusted EBITDA profitability at 7 to 9 percent and to return to 10 to 15 percent annual growth rates. And with this, I hand over to Michael for his concluding remarks.

Michael Hecht Thank you, Martin. We are very pleased with our first quarter of fiscal year 26 earnings results. The outstanding performance of Mitareza demonstrates our proven ability to drive profitable growth and digital luxury, and the clear signs of the commercial turnaround at Metaportier and Mr. Porter show that we are fully on track with our transformation plan. With the agreement to sell the assets at the outnet, we have also found a tailored solution that allows us to accelerate the transformation at use. Lux Experience is in the perfect position to benefit from the continued growth of digital luxury and the ongoing consolidation in the sector. We expect to become the one and only destination for luxury enthusiasts worldwide. We will continue to generate enormous value for our customers, brand partners, and shareholders. And with that, I ask the operator to open the line for your questions.

Thank you. We will now begin the question and answer session, please limit yourself to one question and one follow up, if you would like to ask a question, please raise your hand now. If you have dialed into today's call please press star nine to raise your hand and star six to unmute the standby will be compiled the Q amp a roster. Your first question comes from the line of Blake Anderson with Jefferies. Your line is open. Please go ahead.

Hi, guys. Thanks for taking my question. So I wanted to ask on the acquisition. Looks like it's been almost seven months now since you closed it. There are lots of moving pieces. I wanted to ask, what are the strongest signs that you think your plan is working so far and that it's on track? And what would be any areas, if any, that have surprised you?

Thank you, Blake. Indeed, we closed in April, so... A few months into the overall work, we are well on track, as explained in our call. If you look at some of the quality KPIs of margin, of AOV, of spend per top customer, we are well on track. And for the luxury Net-A-Porter, Mr. Porter, We believe and expect positive growth already next year in 26 calendar. So really good developments. We are really happy that we were able to bring a new leadership team so quickly at Net-A-Porter, at Mr. Porter, and also at Jukes. The signed agreement to sell the assets of the outnet was a significant milestone. We have announced workforce reductions in multiple locations, so it's all well on track. And Martin explained that we already see the results of very early SG&A reductions. I mean, a lot of the activities that we are doing have, of course, lags before they can really take effect in the P&L. So we are very happy. We are not surprised. We knew what was not working. We knew what was working because we did a very extensive due diligence. And now, of course, in a quite unique position of truly understanding the business model, of Net-a-Porter and Mr. Porter and also very close to the off-season luxury business. So it looks very, very good. We explained in May that this is a multi-year exercise with continuous improvement. This is not front-loaded, back-end loaded. We will continue to show quarter-by-quarter improvements. And this was only the first quarter.

Makes sense. Still very early. So I wanted to ask on the guidance. It sounds like there weren't really any changes there aside from the outlet sale. Just wanted to confirm that and then see if there were any was any color you could provide on a quarterly basis. kind of by uh by segment there and i think you said the my theresa segment was maybe mid to high single digit gmv growth um which would i think would imply a slowdown so any more color on that segment as well which has been really strong for you

No, you're completely right, Blake. So there's a reconfirmation of the perspective and the guidance for the two segments, my Teresa and Mr. Porter. And it is obviously... an adjustment needed if you take out the outnet and report it as discontinued operations. That is around $212 million of net sales for the full year that we expected, and therefore we had to adjust that. You see that also we narrowed the range on top and bottom line. I mean, we had on bottom line minus 4% to plus 1%, and now we narrowed it down. So I think we are, as a key success factor, is to really start early and really push the transformation plan. We are well on track to see the good movements. So yeah, reconfirmation of the guidance, adjusting it for the outlet effect. On the Mitresa guidance, mid to high single digits, I mean, there's no specific call out. I mean, as we are seeing very strong support and great signs of growth throughout both luxury segments. But obviously, we want to be mindful in the overall situation of the market. I mean, it is always tough to predict. And therefore, this is in line with what we expect today, in line with an overall soft market.

Got it. Thanks so much. I'll hop back in the queue.

Your next question comes from the line of Oliver Chen with TD Cohen. Your line is open. Please go ahead. You may need to press star six to unmute.

Hey, Oliver, you still seem to be on mute.

There appears to be no audio from Oliver Chen's line. We will move to the next question. The next question is from Cedric Norris with Morgan Stanley. Your line is open. Please go ahead.

Hi Michael and Martin. Thank you very much for taking my questions. So I have two, if that's okay. First, there is this idea that fashion trends follow a pendulum swinging from maximalism and colorful style to more quiet luxury ones, the latest being more in favor over the recent past. We recently saw waves of fashion designers change during their debut in some of the largest luxury houses. So having in mind that fashion trends are hard to predict, could you perhaps elaborate on what you have seen in terms of consumer appetite for bold looks and the overall interest for the luxury category. Have these recent creative directors changes generated more interest? And if yes, for which brands? And then secondly, if you could share what you saw in terms of performance by category, that would be helpful. Thank you.

Happy to do so, Cedric. So you're absolutely right. We have come out of a fashion week cycle with lots of new designers. And at a very high level, because each brand has its own story, there was a bit of movement to more bolder, more colorful, more femininity across many, many brands. We clearly see more buzz. We clearly see more interest. most of these collections have not dropped it. So this is really February, March, April, where we will see how the appetite for consumers are by different maisons. But we clearly have seen a sort of joint idea of many creative directors to move into a new swing, move out of quiet luxury. But I always insist that the drivers of quiet luxury brands like Zegna, Bonello, Cucinelli, Loro Piana, they will continue to be successful. This is an additional... side of fashion that hopefully will excite customers as we move into February, March, April, when a lot of these shows and collections will become available. In terms of what is driving the growth, This is, of course, very much the story of my Teresa, the story of Net-a-Porter and Mr. Porter. It's clothing. It's ready to wear. This is where we see the nicest momentum. This is driven by a very diverse lifestyle of our clients. Vacation remains a big theme, but both summer and winter. And then there's one additional category that we... always call out which is the success of fine jewelry now also on digital it's probably one of the later categories that have moved and we see good traction both on on on netapote and on my teresa for fine jewelry uh in the neighborhood of 20 50 k pieces so we are gradually moving up into very nice price points. Of course, not haute jewelry, but real luxury products. Thank you.

A kind reminder, if you would like to ask a question, please use the raise hand feature at the bottom of your screen. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. Your next question comes from the line of Oliver Chen from TD Cohen. Mr. Chen, please press star six to unmute, star six to unmute.

Hi, Michael. Hi, Martin. Hopefully you can hear me now.

It works now.

Perfect. Thank you. Hi, this is Nicholas Sylvia on for Oliver Chen. Thank you both for taking the time. I do believe some of my questions were answered already, but I did want to ask, A little bit more on guidance. I know you mentioned that EBITDA margin sounds like was adjusted a tiny bit on the lower end, if I'm not mistaken. I was just wondering if you could provide any additional color on what you think the primary drivers are there, if there are any besides the sale of AboutNet. And my second question is if you could just speak a little bit more on what you're seeing regionally. Thank you.

maybe i'll take the the first question on the guidance yeah i know we we adjusted upwards uh so we had my adjusted ebitda margin for the group minus four percent to plus one percent previously and uh therefore now guy towards minus two plus uh one percent so if you take the midpoints it's uh it's an improvement obviously As Michael outlined, it is the transformation plan that we are embarking on from a group level. And in addition, the work of the new leadership teams at the brands, we are all working on improving the profitability from the business side, from the back end side. and also then focusing on re-marketable growth. But for us, and we outlined that in multiple last calls, the SG&A cost ratio is really the key element of improving the profitability. And it is quite noteworthy that already in Q1, So July, August, September, just a couple of months after closing, we were able to decrease SG&A costs by minus 15 million, if you combine the two X YNAB segments of the quarter. in comparison to the prior year quarter. So we are obviously front-loading a lot of pain, a lot of adjustments that we need to do, and we will continue to do so. So this is the core element. And I also guided on growth, especially in the double-T. Mr. Porter, already in the second half of this fiscal year, to show growth. And this will obviously also help on a ratio logic that from a lower expense base to then have obviously profitability improvement on the whole group re-embarking on the growth trajectory again. And it always helps to be the number one worldwide to really push also on the undergrowth side.

Yeah, and let me talk about geography. We continue to see very good traction in the US. We highlighted in our script that it is actually the fastest at accelerating geography. Europe, excluding Germany, very stable growth rates. So we are across all the segments happy with that trend. these two geographies. On the EU side, as we said, we are really focusing on the healthy core, which is Europe. So we intentionally drive business in Europe. Asia has stabilized obviously at a low level. So we're really looking forward to continued growth in the short term in the US and Europe. There may be upside opportunity now in China, but probably still early to say. And I just want to highlight that as a group, 31% of our business is now in the United States. So we feel very good about our US business and our scale in the US now.

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