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

Greetings and welcome to the Lux Experience fourth quarter and full fiscal year 2025 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&A. It is now my pleasure to introduce your host, Martin Beer, the Chief Financial Officer of Lux Experience. Thank you, sir. Please begin.

Thank you, Operator. and welcome everyone to the Lux Experience investor conference call for the fourth quarter and full fiscal year 2025. 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 under 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-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 of the fourth quarter and the full fiscal year 2025 of Lux Experience. As you know, we successfully closed the acquisition of Jux Net Apport on April 23rd. Under the new name Lux Experience, we now operate the leading global digital multi-brand luxury group. Lux Experience operates a portfolio of some of the most distinguished store brands in digital luxury and creates communities for luxury enthusiasts worldwide with unique digital and physical experiences. MyTheresa, Net-a-Porter and Mr. Porter offer highly curated edits of the most prestigious luxury brands featuring women's wear, men's wear, kids wear, fine jewelry and watches, as well as lifestyle products. Jukes and the Outnet are the leading destinations for multi-brand off-season online luxury shopping. With the acquisition now complete, we will report going forward on the basis of a new segment reporting structure. The three segments are Luxury MyTheresa, Luxury Net-a-Porter and Mr. Porter, as well as Off-Price, which is comprised of YUX and the OutNet. As the transaction closed on April 23rd, the performance of the two new segments were mostly driven by the previous management. But in order to provide a more comprehensive view of the underlying performance of the segments, we will comment for all businesses on the full 12-month period ending June 30th, 2025, even though our financial reporting for the Lux Experience Group reflects the contribution from the acquired businesses only for the periods between closing and fiscal year end. Let me start by commenting on the overall progress of establishing a new operating model for the now-formed Lux Experience Group which is built on strong store brand differentiation while enabling significant cost efficiencies in the joint infrastructure for the luxury businesses and the separated infrastructure for the off-price businesses. We managed to have a very fast start and have already made significant changes to the YNAB structure, processes, and infrastructure since the completion of the acquisition in April. We have initiated cost reduction actions across all operations functions. This relates to changes of the global warehouse footprint and fulfillment models, the customer service provider landscape, and a global renegotiation of carrier contracts, all yielding significant savings going forward for the group. The technology migration for luxury as well as the simplification of a separate off-price tech stack has also started and we have fully validated our expectations for the time and effort needed that we had before the acquisition. We have also already enabled customer data analytics across the group by creating a joint data analytics layer on top of the different data platforms. We have come already a long way in the transformation of the group finance and HR functions, supporting the new operating model and driving significant G&A savings going forward. Finally, we have announced partial workforce reductions across YNAB that are subject to the completion of applicable information and consultation processes. All these actions aim to regain financial strength after years of decline for YNAB. We are very pleased with the fast start of the transformation to leverage the scale and scope for strong growth and profitability for the whole group. Medium term, we expect therefore to reach Euro 4 billion in net sales and an adjusted EBPA margin of 7% to 9% for the group. Max Experience is in a remarkable position to become the one and only destination for luxury enthusiasts worldwide. Let me now comment on the MyTeresa business, the main driver of our financial performance in fiscal year 2025. We are extremely pleased with the results of our MyTeresa business. confirming again our unique ability to deliver profitable growth despite ongoing macro headwinds. We clearly demonstrated the strengths of our business model, which focuses on wardrobe building, big spending, luxury customers. In Q4 fiscal year 25, we grew our net sales by plus 11.5% compared to Q4 fiscal year 24. And for the full fiscal year 25, by plus 8.9% compared to full fiscal year 24. This was an acceleration over the results of the third quarter, and we closed the year fully in line with our given guidance. In the United States, the MyTheresa business generated a net sales growth of plus 6.4% in Q4 fiscal year 25 compared to Q4 fiscal year 24. For the full fiscal year, the US accounted for 20.6% of net sales of our total business. In Europe, excluding Germany, we experienced an excellent net sales growth with plus 19.4% in Q4 fiscal year 25 compared to the prior year period. This growth of myTheresa was again driven by our resilient and loyal top customers. The top customer base of MITREVA grew by plus 3.6% in the fourth quarter compared to the prior year period. More importantly, the average spend per top customer in terms of GMV grew by plus 16.1% in Q4 fiscal year 25 versus Q4 fiscal year 24 and plus 15.9% for the full fiscal year 25. As a consequence of our successful strategy at MITREVA, Our top customers accounted for 3.8% of all customers and numbers, but for 42.6% in terms of total GMV in fiscal year 2025. The average order value last 12 months for my Teresa increased by a remarkable plus 10% to an outstanding 773 euros in Q4 fiscal year 2025. demonstrating the success of our focus on selling full-price, high-end luxury products to top customers, including our successful expansion of our fine jewelry offer. This high average order value also provides further economic leverage that we also use, for example, to invest further in our unboxing experience with added gifting for kids' wear orders and branded hangers as well as garment bags for high-value ready-to-wear items. The continued focus of MyTheresa on selling full price is also evident with the again improved gross profit margin growing by 90 basis points in Q4 fiscal year 25. For the full fiscal year 2025, the gross profit margin grew by 130 basis points Our excellent customer service proposition is highlighted by our internally measured net promoter score of 82.6% in Q4 of this year 25, showing our consistently outstanding customer satisfaction. Our success with big spending wardrobe building customers makes MyTheresa a highly desired partner for luxury brands. The fourth quarter of this year 25, We saw again many high-impact campaigns and exclusive product launches, underlying also MyTheresa's strong relationships with luxury brands. We launched the exclusive Dolce & Gabbana Taumina capsule collection for womenswear and kidswear, only available at MyTheresa. We launched also high summer exclusive capsules with Pucci, Versace, Chloe, La Dublige, and Missoni for women's wear. All only available at MyTeresa. We were the exclusive pre-launch partner for the Alaia Archetype Collection, Valentino's Etefoo capsule collection, as well as the Rose Fall Winter 25 collection, for womenswear and menswear. We also launched exclusive womenswear bags and shoe styles from Bottega Veneta's pre-fall 25 collection and exclusive womenswear and menswear styles from Prada's new season 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. We aspire to constantly engage with our top customers across the globe to build strong, long-lasting relationships. In the fourth quarter, we hosted various top customer events, including an intimate afternoon tea with Patou at the private apartment of the creative director Guillaume Henry. We celebrated a De Vaux pop-up at the Maite Reza store in Munich. We invited top customers to a dinner and shopping experience with Prada at the Roundtree Hotel in Ammerganfurt. Further highlights in the United States included a private behind-the-scenes viewing of the Boston ballet's rehearsal of Romeo and Juliet, and the private tour at the Frieze Art Exhibition at Huxley Arts, hosted in collaboration with Stone Island. In Shanghai, we created an unforgettable experience around Sarah Burton's debut runway collection together with Givenchy. In the spirit of being a community for luxury enthusiasts, We hosted a two-day Taomina experience in Sicily with Dolce & Gabbana in attendance of Alfonso Dolce. We invited guests to a dinner at the famous San Domenico Palace and a Sicilian market experience at Taomina Central Market. Another highlight was our two-day room experience with Acquazur, including a private dinner at the Cinecittà film studio attended by Edgardo Osorio, founder and creative director of Acquazua. We also hosted a Mediterranean escape in Ibiza with Missoni, including a boat tour and pool party. Finally, we invited clients to Naples to attend a private fashion show with Kiton and learn about the sartorial craftsmanship of the brand. In summary, we are extremely pleased with the results of the MyTheresa business. We have demonstrated clear operational and financial leadership in an otherwise struggling sector, and we have also underlined that we have the expertise of Lux Experience to achieve profitable growth in digital luxury. Let me now comment on the luxury segment comprised of Net-a-Porter and Mr. Porter. As stated in our investor presentation, both Net-a-Porter as well as Mr. Porter are truly iconic digital luxury brands that have distinct high-end customers quite different from the MyTeresa customer base. Our key strategic priority will be to strengthen the unique identities of the brands and maintain the differentiation for MyTeresa. A renewed, clear focus on luxury customers looking for editorial inspiration and brand discovery, as well as a focus on full price selling, will be fundamental for the turnaround at Net-a-Porter and Mr. Porter. Of course, reduced cost of operation will also be needed. In Q4 fiscal year 25, net sales declined by minus 8.9% versus Q4 fiscal year 24 and by minus 10.9% for the full fiscal year 25 compared to full fiscal year 24 for Net-a-Porter and Mr. Porter combined. The United States with minus 8% and Europe excluding the UK and Germany with minus 6.5% saw similar decreases in terms of GAV in Q4 fiscal year 25 compared to Q4 fiscal year 24. While the overall top line declined, The average order value last 12 months increased by plus 14.5 percent to 811 euros for MetaPorter and Mr. Porter combined in Q4 fiscal year 25. The gross profit margin remained almost stable in Q4 fiscal year 25 for MetaPorter and Mr. Porter combined compared to the prior year period. Going forward, the clear strategy will be on a renewed focus on high end big spending customers and on full price selling, both fully in line with our group strategy. The immediate priority after closing the acquisition has been to appoint highly experienced and strongly driven leadership teams at Net-a-Porter and Vista-Porter after years of decline. Both store brands now have outstanding dedicated leadership teams in place. This needed change was done in record speed. Under the leadership of Net-a-Porter's new CEO, Heather Kamenetsky, who significantly drove MyTereza's U.S. growth since 2021, new Chief Buying and Merchandising Officer, Brigitte Chartrand, and new Chief Brand and Customer Officer, Claudia Plant, are engineering the successful return of Net-a-Porter's global appeal and customer passion based on editorial authority and luxury fashion discovery. No less pivotal is the return of co-founder Toby Bateman as CEO to Mr. Porter. Under his leadership, Jeremy Langmead as new brand director, Daniel Todd as buying director, and Cassandra Baxland as new customer director are charting the course of Mr. Porter to regain its unique leadership position as the only global menswear digital luxury destination. While we expect net sales to continue to decline in the short term for Net-a-Porter and Mr. Porter based on a lack of marketing spend in the past as well as too little investments into the buying of attractive new merchandise, the new leadership team in place And a radical transformation program will soon bear fruit and create a much healthier and resilient business model. Lastly, let me comment on the off-price segment, comprised of yukes and the outset. Both store brands have suffered the most from a lack of dedicated resources, marketing spend, as well as low investments in attractive new merchandise. Furthermore, the off-price businesses shared infrastructure and resources with the luxury businesses, which did not really fulfill the needs of a lower margin off-price business model. As stated in May, only by separating off-price from luxury and by decisively streamlining the businesses will the vicious cycle of declining revenues and decreasing investments be stopped. In Q4 fiscal year 25, net sales declined by minus 17.4% for Jukes and the Outlet combined. For the full fiscal year 2025, the decline was minus 13.2% compared to full fiscal year 24. The United States with minus 21.8% and Europe excluding the UK and Germany with minus 15.6% saw similar negative developments in terms of GMV for Jukes and the Altnet for Q4 fiscal year 25 compared to Q4 fiscal year 24. As for the other businesses, the average order value last 12 months for Jukes and the Altnet combined increased by plus 17.4% to 292 euros. The gross profit margin decreased in Q4 by 490 basis points compared to the prior year period. This was mostly driven by the shutdown of the Jukes marketplace business as well as clearance activities during this quarter. Fully in line with our strategy, we have already taken very clear action since the closing of the acquisition of YMO. Separate leadership teams have been put in place and confirmed for Jukes and the output. Dedicated brand and marketing functions separate from luxury have been built up. infrastructure resources and processes in finance hr operations and most importantly in technology are being separated from the luxury segment and streamlined to create the lean operating model required for the off-price business select operational and administrative structures are being consolidated and workforce reductions have been announced A group remains fully committed to Italy for EUGS and the United Kingdom for the Altnet as their respective headquarters. All these measures will help us to regain growth and financial strength after years of decline for the off-price businesses. And now, I hand over to Martin to discuss the financial results in detail.

Thank you, Michael. As explained by Michael, we report across three sectors. Luxury Mitresa, our legacy business, Luxury NAP and Mr. P, which is comprised of Net-a-Porter and Mr. Porter, and Off Price, which consists of Jukes and the Outland. As the transaction closed on April 23rd, 2025, and our fiscal year ended June 30th, our financial reporting for our Lux experience group reflects the contribution from the acquired businesses only for the period between closing and fiscal year-end. We will refer to these as reported figures. To provide a more comprehensive view of the underlying performance of the segments and the combined business group, we will also report on certain key metrics of the new segments and the Lux Experience Group on an illustrative basis, reflecting the full last quarter and full 12-month period ending June 30, 2025. I will now review the financial results for the fourth quarter and full fiscal year ended June 30, 2025 on a segment basis and highlight specific developments that influenced each segment's performance. Following that, I will review the consolidated financial results for LuxExperience at group level and will then provide an outlook for fiscal year 26 and the medium term. Unless otherwise stated, all numbers refer to Euro. Let's begin with the performance of our Mitresa business. During the fourth quarter, covering April to June, Mitresa's net sales increased by plus 11.5% to 248.9 million. For the full fiscal year, net sales grew by 8%. to $916.1 million in line with our guidance. GMV grew by plus 11.1% in the quarter to $265.9 million and to $988.5 million in the full fiscal year, a growth of plus 8.2%. MyTreesource growth profit margin increased by 90 basis points from 47.4% the prior year quarter to now 48.3 percent with our continued focus on full price sale this marks the fourth consecutive quarter of margin expansion for the full fiscal year 25 the gross profit margin increased by 130 basis points to 47 percent from 45.7 percent in the prior year period i will now briefly review the cost line developments. The shipping and payment cost ratio improved by 180 basis points in the fourth quarter from 14.7% to now 12.9%. The reduction is a result of our continuous focus on improving unit economics, mostly driven by an increase in AOV and lower return rates. In the full fiscal year 25, the shipping and payment cost ratio decreased by 110 basis points to 13.6%. While the marketing cost ratio saw a slight increase both in the quarter and over the full fiscal year, the selling and general and administrative SG&A cost ratio decreased. In Q4 of fiscal year 25, the SG&A cost ratio stood at 13.4%. as a percentage of GMB, decreasing by 70 basis points from the prior year quarter. For the full fiscal year, the SG&A cost ratio decreased by 40 basis points to 13.6%. In Q4 of fiscal year 25, the adjusted EBITDA margin expanded by 180 basis points, from 4.7% to now 6.5%. For the full fiscal year 25, the adjusted EBITDA margin increased by 180 basis points to 4.9%, with an adjusted EBITDA of $44.6 million in line with our given guidance. Key drivers were our increasing gross profit margin and better unit economics through diligent cost management in all our cost lines. To be able to continuously improve our profitability even in challenging times for the overall industry, shows the resilience of our business model and the value of our positioning. Our inventory levels at MyTresa stayed flat compared to the previous fiscal year end, despite double-digit top-line growth. During Q4 of fiscal year 25, MyTresa had a positive operating cash flow, plus $17.6 million, For the full fiscal year, MyTheresa also had a positive operating cash flow of plus 3.6 million. In sum, MyTheresa outperformed its peers with double digit top line growth and improving its profitability. In Q4 and for the full fiscal year 25, we proved again that we are the best operator in digital luxury and are ideally positioned to fortify the leadership position of lax experience along its three segments. Let me now comment on the luxury Net-a-Porter and Mr. Porter segment in more detail. In the fourth quarter of fiscal year, net sales decreased by minus 8.9% and minus 10.9% LTM on an illustrative basis. As Michael outlined, this development is driven by lack of targeted marketing and merchandise strategy and is being readjusted by the new leadership in place. This was anticipated and it's reflected in our overall budget plan. The average order value on an LTM basis increased by plus 14.5% from 708 to 811 euros. The adjusted gross profit margin in Q4 was mostly stable at around 51% both in line with a strategic refocus on improving customer quality. Adjusted EBITDA profitability at NetMrP is below Mitresa level at minus 1.1% adjusted EBITDA margin in the quarter compared to plus 6.5% at Mitresa. On an LTM basis, the NetMrP adjusted EBITDA margin was at minus 0.7% compared to the plus 4.9% at Mitresa. As outlined in our May investor presentation, the key focus area for NAP and MRP rests in the SG&A cost ratio. In Q4, the SG&A cost ratio at NAP MRP was at 24.6%, with now also integrating IT development costs into operating expenses. instead of capex, the same way we have treated IT development costs at MyTheresa. In fiscal year 24, NAB Mr. P had tech people capex of 26 million. With closing of the acquisition, we changed towards this integration into SG&A expenses starting in this fiscal year Q4. From now on, this enables full transparency in the true SG&A cost development. The 24.6% SG&A cost ratio at NetMrP in the quarter compares to the 13.4% SG&A cost ratio at MyTheresa. This is over a 1,000 basis points difference and is therefore the focus area of our transformation plan with IT, replatforming, operational efficiencies, simplifying the business model, and cutting overhead costs. Other cost lines of the NetMrP Q4 and LTM performance are in line with our expectations and the transformation plan. We also provided illustrative previous year numbers of NetMrP. Given the alignment to the group CapEx policy mentioned above and other adjustments in the setup, previous year numbers are not fully comparable to the current Q4 performance. As we provide previous year comparisons in the MyTheresa segment, we wanted to also make the financial development transparent at the other two segments. With the new leadership team, NAP and Mr. P on board, we will refine and invest in our buying and marketing efforts to set Net-a-Porter and Mr. Porter on a growth trajectory again while improving profitability. With the execution of our transformation plan, we expect the Net Mr. P segment to achieve comparable profitability levels to the MyTheresa segment with a targeted adjusted EBITDA margin of around 7% to 9% medium term. Let me now review the financial performance of the off-price segment. The off-price segment is set to more comprehensive restructuring of its business model. The new leadership team has been initiating multiple changes in its operational and business setup to return to a simplified, efficient, and more quality-focused setup. In Q4, especially with the discontinuation of the unprofitable Jukes marketplace model, This led to a deliberate net sales reduction of minus 17.4% to 159.1 million. On an LTM basis, net sales decreased by 13.2% to 792.8 million. The AOV on an LTM basis increased by plus 17.4% to 292 euros in line with the customer quality shift. The gross profit margin was at 37.9% in the quarter and 35% in the LTM period. The SG&E cost ratio of 28.1% in Q4 mirrors the fundamental restructuring effort needed to enable the off-price segment to return to its historic profitability levels. As with the net Mr. P segment, SG&A cost ratio now includes the IT development costs into operating expenses instead of capex. In fiscal year 24, off-price had tech people capex of 18 million euros. We're starting to drastically simplify the operating model and to capture efficiencies in its IT and operational setup and corporate overhead. In this current state, the off-price segment experienced an adjusted EBITDA margin in Q4 of minus 17.9% and minus 12.1% on an LTM basis, in line with our expectations and the long-term plan. With the execution of our defined transformation plan, we expect to return to adjusted EBITDA profitability of the off-price segment in 18 to 24 months. In Q4, the two new segments Net Mr. P and Off Price had combined a negative operating and investing cash flow of minus 46.6 million. For the full fiscal year 25, those two segments had an operating and investing cash flow of minus 4.6 million, driven by low inventory intake and low marketing investments. With the measures of the transformation plan coupled with investments in marketing and networking capital buildup, fiscal year 26 will be a cash consumption year for Lux Experience. Now that we've reviewed the performance of our individual segments, let's take a look at how these results translate into our group-level financials for Lux Experience. When we refer to reported numbers, it is our financial reporting reflecting the true contribution from the acquired businesses between closing and fiscal year end. When we refer to elucidative numbers, it is reflected in the contribution of the acquired businesses as if they were part of the group for the full periods presented, but excluding acquisition accounting and OFS and Fang Mao businesses that are being wound down. For the full fiscal year 25 and the June 30, reported group GMV amounted to 1.3 billion. On an illustrative basis, group GMV in the full fiscal year 25 was 2.9 billion, decreasing from 3.1 billion in the previous 12 months period, representing an overall decrease of minus 6.3%. Reported group net sales amounted to 1.3 billion, for the full fiscal year 25. On an elucidative basis, net sales were 2.8 billion compared to 2.9 billion in the comparable period, resulting in a decrease of minus 5.9%. Reported group adjusted EBITDA for the full fiscal year 25 amounted to plus 44.2 million at an adjusted EBITDA margin of 3.5%. This higher reported group adjusted EBITDA in comparison to elucidative numbers is mostly driven by effects from acquisition accounting. On an elucidative basis, group adjusted EBITDA was minus 15.3 million in Q4 of fiscal year 25 and minus 58.7 million for the full fiscal year 25. The adjusted EBITDA margin was minus 2.3% in Q4 and minus 2.1% for the full fiscal year. At the end of the full fiscal year 25, reported group inventory stood at 1 billion and 20 million with networking capital at 814.4 million. Reported group operating cash flow the fiscal year was minus 30.6 million on an illustrative basis including all three segments operating and investing cash flow for the last 12 months was minus 2.3 million driven by significantly reduced inventory intake at net mr p and off price the group ended the fiscal year with a cash position of $603.6 million and additional access to an undrawn revolving credit facility of $179.8 million. Lux Experience has a strong balance sheet with $1.8 billion of current assets, mostly inventories and cash, almost no bank debt, and an equity ratio of 59%. Let me now talk to the financial outlook of LuxExperience based on the most recent near-term and medium-term expectations. With the implementation of our transformation plan, fiscal year 26 will be a transition year. In addition, given the persistent uncertainties on the direct and indirect US customs effects, on worldwide customer sentiment, we look at the next 12 months with prudent conservatism. We expect MyTreeset to continue growing its GMV top line. Nat Mr. P will still need fiscal year 26 to readjust its buying and marketing strategy and will therefore still slightly decline in GMV. Off-Price in fiscal year 26 will continue the restructuring of its operating and business model. We therefore expect GMV at off-price to continue to decrease considerably. In sum, and in fiscal year 26, lax experience at group level is expected to have a GMV at around 2.5 to 2.9 billion. Medium term, we expect lax experience to return to 10 to 15% annual growth rates. Given the uncertainties in the market mentioned earlier and fiscal year 26 being a transition year, we expect in fiscal year 26 comparable profitability levels to fiscal year 25. In sum, lax experience at group level is expected to report an adjusted EBITDA margin between minus 4 and plus 1%. We are in an ideal position to execute our transformation plan. With our continued success at Mitresa, we have proven that we are the best execution team in global digital luxury. The new leadership teams at NetMisterP and OfPrice have begun their work, and at group level, we are in the midst of implementing the measures of our transformation plan. The integration of the YNAB finance teams and formation of all LuxExperience group structures have started early, and we are well on the way. Key activities included a new group-wide organization and governance setup, an integrated finance consolidation and IRF-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 for fiscal year 25 under strict PCAOB guidelines are progressing well, and we expect to file our 20F as planned end of October. The full execution of the transformation plan, which includes operational adjustments, technology platform integration, and organizational alignment is already fully funded and with additional leeway with a 555 million cash injection of Bridgemore at closing. At the end of June 2025, Lux Experience had a total available liquidity of 784 million euros, including cash at hand of 604 million and no bank debt, just a small utilization of our revolver of 20.2 million. We expect turnaround to require funds in total of no more than 350 to 450 million and we expect to report positive operating cash flow for the group in two to two and a half years the setup of lux experience with its three operating segments is designed to preserve the strength of each segment while unlocking meaningful long-term value While we are already seeing initial positive momentum, we will continue to carefully manage the business to drive operational improvements and strategic growth. We are fully committed on executing our transformation plan and creating significant value for our shareholders and stakeholders. Medium term, we expect to grow LuxExperience to 4 billion revenues with adjusted EBITDA of around 320 million and an adjusted EBITDA margin of around 8%. at the levels we have proven to achieve in the past. As the clear leader in global digital luxury, we have the track record of multi-year growth at CAGRs well above 12%. And with this, I hand over to Michael for his concluding remarks.

Lux Experience is in a remarkable position to become the one and only destination for luxury enthusiasts worldwide. bringing together some of the most iconic brands in digital luxury retail. The outstanding performance of myTereza shows our unique ability to deliver continued success in digital luxury. We will bring these capabilities and our successful approach to the new store brands. We managed to have a very fast start and have already made significant changes to the YNAB structure, processes and infrastructure since the completion of the acquisition in April. We will leverage the scale and scope of the newly formed group for efficiencies and value creation across the business segments by building a community for luxury enthusiasts worldwide and creating desirability through digital and physical experiences we will continue to generate enormous value for our customers, brand partners and shareholders. With that, I ask the operator to open the line for your questions.

We will now begin the question and answer session, please limit yourself to 1 question and 1 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 9 to raise your hand. And star 6 to unmute please stand by briefly while we compile the Q and a roster. Your first question comes from the line of Oliver Chen with TD Cohen. Your line is open. Please go ahead.

Hi, Michael Martin. Thank you. On the MyTheresa business, the AOV was impressive as well as the margins. What parts of the MyTheresa business experienced upside relative to your expectations, and what should we expect in terms of the margin profile going forward? You had a nice benefit with the unit economics. Also, you called out that SG&A, big opportunity on the SG&A side. on the net-a-porter division. What's the roadmap for timing of what we should expect there, given it's a nice opportunity and some of it's within your control. And then on the customs effect, that would be helpful for us to understand what we should be thinking about with the risk associated with the sentiment that you articulated relative to customs. And finally, as you articulated that the guidance on the 2.5 to 2.9 billion it'd be helpful for us to understand what you're seeing regionally and what you're assuming geographically in terms of achieving that guidance level at the top line thank you thank you oliver for this one question let me uh start with your first question um i think

clearly the group guidance expects that we will continue to improve the profitability in the miter razor business continually improving full price and thus have a further increase in in gross margin um Upsides, I mean, we reported a very strong European business in this quarter, which is great. Um, this is an important or the largest part of the, um, trading and, uh, we will. Uh, we, we do expect a continued strong growth in in us. Um, we all aware that things are quite fickle nowadays. So this is all based on what we know today, but there is. Um, continued growth and, uh, and continued margin improvement for for my definitely. Definitely possible on the roadmap. I think, uh, also based on the main presentation, the elements are clear. It's in the operations. It's in the corporate functions in the technology. It's in the data leverage. Um. A lot of it is under our control as you rightly put all of us. Um, we are maybe moving very fast on operation and so this will definitely show the faster than 1st results. Um, corporate also, we are going with a fine comb to to all cost technology. This is the biggest part of savings, but this is the 1 that definitely takes 2 to 2 and a half years. And maybe for the two last questions, I hand over to Martin on customs and guidance.

Happy. Hi, Oliver. Happy to answer on the customs side. I mean, what we currently see is that the indirect customs effect on the customer sentiment is containable. continued strong growth of of my trees and and all other business so they the overall effect obvious customs and industry is still there but we see green shoots we see positive developments and also for us not a barrier to continue our strong growth worldwide

And so we'll see the 2nd question regionally as you think about the growth rates and how are you thinking about the US relative to Europe and any comments or thoughts on what you're seeing in Asia in terms of the model going forward geographic dynamics. Thank you.

Yeah, I mean, maybe we start with the last aspect. In our guidance growth, there's nothing like unexpected, you know, super growth in Asia modeled in or built in. So we continue to see what everybody sees that, you know, Asia, especially China, is still weak. As you know, our base is very small, so we don't, So China is for us rather an option for further growth once this situation improves. But in the guidance, nothing is built in there. And as Michael called out, I mean, the regional growth avenues are quite vast for us. So we continue and expect to continue to grow worldwide. with strong growth in Europe, continued also strong growth in the US. This is also clearly visible for us. And we are able to grow in all regions, no matter what the situation is there. So on the regional side, especially looking at the guidance, no unexpected or change in what we have seen so far.

uh continuous strong development of lex experience in all regions thank you best regards as a reminder if you'd like to ask a question please raise your hand if you've dialed into today's call please press star 9 to raise your hand and star 6 to unmute your line We have a follow up question from the line of Oliver Chen. Please go ahead. Hi, Oliver. Can't hear you currently, so we're going to move on to the next question. Next question comes from the line of Blake Anderson with Jefferies. Your line is open. Please go ahead.

Hi guys, congrats on all the deal progress so far and I appreciate you taking the questions. So I wanted to just ask on guidance. Could you give any more color on the key factors that would lead you to hitting the lower end of your EBITDA margin guidance? versus the higher end. And then I'm wondering on quarterly cadence, can you provide maybe any quarter to date trends you've seen and any shaping of the year? Thanks so much.

Yeah, I mean, if you look at the quarterly guidance, I mean, as you know, as you well know, the quarters are mostly driven by the seasonality of the business. So, with Q2 and Q4 being stronger quarters and Q1 and fiscal Q3 being being weaker quarters. So this season cadence will will continue. And on the overall guidance, obviously, given that we're in the midst of the restructuring of two segments and seeing the overall situation in the market, also with other brands, we want to be conservatively prudent. And therefore, we have guided for a large spread of the adjusted EBITDA margin. and therefore the lower end is then driven by a more conservative approach of looking at the overall market development that obviously stays still a bit uncertain on multiple fronts.

Thank you. As a reminder, if you'd like to ask a question, please raise your hand. We have a follow up question from Oliver Chen. Oliver, please ensure your line is unmuted.

All right. Thanks a lot. I appreciate that. On the details on net-a-porter, you mentioned a couple of issues regarding inventory as well as demand creation on the marketing side. What's the timing and roadmap on both of those opportunities? It looks like they're definitely impacting the margin. Thanks.

Well, as you know, there is a significant lead time in terms of changing assortment, moving the buy. So we have a strong new buying director in place. He's in the market. the fall winter 26 is the assortment that is now being bought. And so this kicks in early deliveries in May of next year. So the performance of the coming fiscal year is still very much influenced by spring summer 26, that outside of the main selections has already been been bought, but there are many other opportunities on the marketing side in terms of customer acquisition, customer targeting. We are changing the approach to performance marketing based on the experience and also models that we have built at MyTheresa over the years. So merchandise, longest lead time on marketing and customers, but customer tactics, top customer engagement, all of these levers that have been neglected or, in our view, not executed correctly, this will kick in and you will already see impact in those aspects in the first half of the next calendar year.

Okay, Michael. Also, there's been a lot happening in the backdrop with different closures and distress as well. What are your thoughts on the current state of the promotional environment that you're seeing and opportunities amidst the closures? And then as we look at the designer landscape, you have a lot of really strong relationships and there's a ton of newness on the creative side. What are your latest thinkings on the changes creatively and in quiet relative to louder luxury?

Yeah, on your 1st part, I think, yes, we, we have seen further steps in in the consolidation of the sector. Uh, I still refer to it or the sort of. perfect example of an industry curve that after boom and and some weaker demand seasons there is consolidation and i continue to believe and i think this also drives some of our numbers this consolidation helps to get to a healthy industry to a reduction in promotional activities of different players. It's for sure that we have a much more balanced inventory to demand equation at the moment in place. So as long as demand continues to develop as it has over the last couple of months, we should be very fine. Of course, these things are fickle. And to your second part, you're absolutely right. I mean, we are really at the pivotal moment at many houses, new designers, We've seen some first debuts to name Demar Garzali as the new creative director at Gucci, which brought a lot of new attention to the brand. We will have further new designers at Bottega on Saturday with Louise Trotter. We will have a new designer at Versace presenting on Friday. And we believe there's a huge level of opportunity in there. There will be a lot of attention garnered by press, by influencers, by ambassadors. So we believe that not everything will work, but there's a significant amount of creativity coming into this market. That's what it needs. And so we're really looking forward to it. And our buyers are ready to jump in when they see opportunities, when they see attractive merchandise. As outlined by Martin, we are in a position to put dollars behind us if we believe there is a strong trend in the market.

Okay. And on the consumer sentiment piece, as you know, it's been somewhat volatile. What are you seeing with consumer sentiment and the feel-good factor in relation to your business? Demna has been exciting at Gucci as well. It's a rebirth or a transformation with what's happening at that brand. Would love any thoughts on that opportunity as well.

um i think i have whatever i say i have to really build on your remark we are in a very volatile environment so everything we see is only as valid as far as we can sort of predict the future but sentiment has been improving i mean i refer back to the strong results in the last quarter in europe for my teresa we continue to see good growth and acceleration in the demand in the United States. In Asia, from a very low level, there are improvements visible. So current trends are positive at different sort of levels of strength. But again, we are in a volatile environment and we have seen a lot of macro shocks that change that quite quickly. um gucci is one of the biggest luxury brand in in in in in the industry uh one even even with the negative trend of recent years it's still a top five luxury brand and so a new designer bringing in a lot of creativity and creating Quite a lot of buzz in the last two days is very positive. Again, this is never a one season game. This is establishing new codes, building on the existing codes of the brand. So great start. And without a great start, you can't have a continuation. But a great start alone is, of course, also not enough.

Thank you. Final, on the off-price division, you've been consistent with the need to take out costs there and rebase it to what's appropriate for the margin profile of that division. What are the harder parts of that business? And it's pretty different in terms of the buying techniques as well as the customer. What do you see happening in terms of your core competencies relative to that division? And how quickly can you get the margin structure in a place that you're happy with?

It is a different business. I mean, we have shared the small overlap between the 2 luxury segments and that segments, but still. It is retail and still, we firmly believe that the strict application of the principles of focusing on the customer, understanding what he or she really desires servicing them. Well. And, of course, being approval and and it's not. So much that these 2 businesses. spend without any understanding of their cost structure they were sitting on a cost structure that was not engineered for off-price so it's really what we stressed often the separation of the infrastructure from the luxury to provide them an infrastructure that fits their gross profit margin and off price and off season is lower by the by definition of that business model And so I think there are different challenges, but the opportunities are as big and the time horizon is as fast as we see with the Net-a-Porter, Net-a-Potem, Mr. Porter luxury figures.

Thank you. There are no further questions pending at this time. This concludes today's call. Thank you for attending. You may now disconnect.