MYT Netherlands Parent BV ADR

Greetings and welcome to Lux Experience, third quarter of 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 Baer, 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 third quarter of fiscal year, 2025. Our first investor conference call since we closed the acquisition of Ux Metaporte and changed our company name to Lux Experience to affect the best of the combined companies. Today's call is dedicated to the fiscal Q3 results of the legacy MyTresa standalone business. With me today is our CEO, Michael Kiger. Before we begin, we would like to remind you that our discussions today will include forward looking statements. Any statements we make about expectations of 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 report in accordance with IFS on this call. You can find the conciliations of these non-IFS financial measures in our press release, which is available on our investor relations website at .luxexperience.com. We'll 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 our third quarter of fiscal year 2025. We are of course truly excited to have completed the acquisition of Uxniffa quota on April 23rd and to now operate the leading global luxury multi-brand retail group under the name Lux 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. Lux Experience is now the preeminent multi-brand group in digital luxury with combined net sales of around 3 billion euros. Our medium term ambition is to reach 4 billion in net sales and 7% to 9% adjusted EBTA 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 as Lux Experience, 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 year 2025. With solid revenue growth and positive adjusted EBTA, we continue to demonstrate our ability to execute well and achieve strong results and the continued macro uncertainties where other players fail. We are the leader in a clearly consolidating sector and continue to display the unique characteristic of profitable growth. Our improved cost margin, the strong growth of top customer spent, 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 strengths 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 ensues and we create the viability with them also through unique physical experience. Second, the strong relationship that we have with big spending wardrobe 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 pre-launch campaigns that in turn drove our global business growth in the third quarter of fiscal year 2025. 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 spent were again drivers for improving profitability in terms of adjusted EBDA 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 ensues here is driving our business. In the third quarter, our GMV with top customers grew by plus .8% compared to the prior year period underlining resilience of top customers to macro headsets. This growth was largely driven by an outstanding increase of the average spend per top customer in terms of GMV by plus .9% in Q3 fiscal year 25 versus Q3 fiscal year 24. In the United States, our business with our top customers even grew by plus 12% driven by the impressive growth of average spend per US top customer of plus 17.8%. We mentioned already in the last quarter, our two week immersive invite only up-trade ski experience in Aspen in collaboration with Bamelman's Bar. 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 17 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 euro 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. Examples include StyleSweep in Miami, Dusseldorf, San Francisco, New York and Hong Kong. We hosted Michelin star dinners in Houston, Washington DC. We invited top customers to an intimate lunch with the Kate in the Kate showroom, allowing top customers to meet with Kathleen Holstein, founder and creative director of Kate, as well as seeing the latest pieces from the newest collection. Together with Caroline Herrera, we welcome top customers at the Hotel de Criant where creative director Wes Gordon shared the inspiration and artistry behind his latest runway collection followed by a lunch with himself. Moreover, we partnered again with Porsche for a driving experience in Los Angeles and for the first time with Fat Ice Race inviting 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 insurers through digital and physical experiences, we organized for our top customers true money can't buy experiences. In the third quarter, top customers were invited to an event with Alaya 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 Balmaran. We hosted an exclusive dinner with the creative director Christopher Esper at the namesake brand and Lula restaurant during Paris Fashion Week. 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 Le Mil. 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 Le. Together with Pomellato, we also hosted top customers for a two day Milan experience, including a private tour of the renowned Casa Pomellato factory, an elegant dinner at Cracow in Galleria, a Pomellato showroom visit, a private guided tour of Casa Fornazetti and a lunch at the iconic Beacher restaurant. Finally, we hosted a Texan experience with Pucci to celebrate the launch of the exclusive Pucci capsule collection in Austin. The afternoon started with an intimate cocktail moment with Pucci's artistic director Camille Puccelli, followed by a cocktail party at the famous Austin Motel where guests were treated to custom cowboy head 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 Miteriza brands through global social media amplification. Please see our investor presentation for more details on these unique money can buy experiences. 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 Prada, which allows us now to distribute Prada products globally, effectively doubling our reach and our business potential with the brand. 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 menswear run relooks from Louvre as well as exclusive bags and accessories from the Louvre Luna Nullier collection for women's wear. We launched an exclusive capsule collection by Manolo Blahnik for women's wear and menswear only available at Miteriza. We were the exclusive pre-launch partner for Totem's C-Lock clutch bags and the Totem Garderovel collection as well as Etro's Spring Summer 25 collection. We also launched exclusive women's wear styles from Balenciaga's Summer 25 collection and exclusive menswear styles from Tod's Spring Summer 25 collection. Please see our investor presentation for more details on brand collaborations in the third quarter. 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 25. We grew our net sales by plus 3.8 percent compared to Q3 of fiscal year 24. The first nine months of fiscal year 25 net sales grew by plus 8 percent. The United States saw similar growth with plus 3.9 percent in Q3 fiscal year 25 while in Europe including Germany and UK we experienced a very strong net sales growth with plus 8.1 percent in the third quarter compared to the prior year period. But in the third quarter of fiscal year 25 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 from 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. It reached a record high of 86 percent in Q3 fiscal year 25 demonstrating the consistent excellence of our customer service proposition. Our average order value last 12 months increased by plus 8.8 percent to an outstanding euro 753 in Q3 fiscal year 25 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. Our return rates decreased in the third quarter also contributing to the strong profitability of plus 3.9 percent in terms of adjusted and BTA 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 2025. We see this quarter as further proof that our business can deliver profitable growth even under 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 Yuke's MetaPorter. And now I hand over to Martin to discuss the financial results in detail.

Thank you Michael. As Michael already mentioned we are very excited about our successful closing of the Yuke's MetaPorter acquisition on April 23rd. 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 Teresa'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 Lux Experience, key strategic initiatives, financial details as well as our plans and strategic direction moving forward. Therefore, let's talk today about our fiscal Q3 reporting ended in March 31st 2025. We're very pleased with the financial performance in the third quarter and also in the past nine months of fiscal year 2025. In the quarter we achieved a solid net sales growth of plus .8% fully in line with our guidance. Our AOV LTM again increased plus .8% to record high of 753 euros 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. We continued to increase our profitability with an adjusted EBITDA margin of plus .9% in the quarter. We also achieved positive operating cash flow of 18.7 million with stable inventory levels compared to previous year and achieving our day's inventory outstanding target of 260 days. This underlines my Teresa's 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 1st through March 31st 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. In the first quarter net sales grew by 8.9 million or plus .8% to 242.5 million as compared to 233.6 million in the prior quarter. GMV per all customers grew by plus .9% while the GMV per top customer grew even stronger by an impressive .9% during the first few three of fiscal year 25. In the first nine months of fiscal year 25 net sales grew by plus 8% to 667.2 million fully in line with our given top-line guidance for the full fiscal year. GMV increased by 9.5 million to 261.3 million in the third quarter of fiscal year 25 also a plus .8% increase from 251.9 million in the prior year period. Increasing by 61 euro for order delivered our average order value LTM grew by plus .8% now standing at a record high of 1753 euros as compared to 692 euros in the prior period. The increase in AOV strengthens our unit economics and highlights our strategy of full price selling the high end of luxury. Our growth was well balanced worldwide with our core market Europe growing by plus .1% with a net sales share of .8% The US had a share of .5% rest of world of .7% In the third quarter of fiscal year 25 gross profit increased by plus .2% to 108.5 million from 101.3 million in the prior quarter. The gross profit margin increased by 140 basis points to .8% as compared to .4% in Q3 of fiscal year 24. This is fully aligned what we achieved in the preceding quarters. And less competitive and discount driven market we stay true to our strategy of a higher full price share in our Q rated offer and thus we were able to improve our gross profit margin. In the last nine months fiscal year 25 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 .3% prior to now 14% of the year. 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 25 during which the shipping and payment cost ratio decreased by 90 basis points to .8% compared to .7% in the prior period. The marketing cost ratio increased from .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. Throughout the quarter we increased our marketing activities in line with this approach. The adjusted selling general and administrative S&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 .2% to 13%. During the first nine months of fiscal year 25 adjusted S&A cost ratio decreased by 40 basis points from 14% prior period to now 13.6%. In Q3 of fiscal year 25 adjusted EBITDA increased by 0.5 million to 9.3 million from 8.9 million in the prior quarter. Adjusted EBITDA margin increased from .8% to 3.9%. For the first nine months of fiscal year 25 adjusted EBITDA increased significantly by 13.2 million and then adjusted EBITDA margin of .3% compared to .5% in the previous year period. Fully supporting our guidance for the full fiscal year. Depreciation and amortization remained stable at 3.9 million and .5% of GMB in Q3 of fiscal year 25 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 25 adjusted operating income was at 5.5 million a 20 basis points increased margin at 2.3%. For the first nine months in fiscal year 25 adjusted operating income was at 16.6 million at .5% margin with a significant improvement to previous year. We also delivered positive adjusted net income in the quarter at 5.4 million and for the first nine months of fiscal year 25 adjusted net income was at 21.4 million at a .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 25 we achieved a positive cash flow for operating activities of plus 18.7 million compared to minus 11.6 million in the previous year quarter. This is a 30.3 million positive cash flow driven by effective working capital management. For the first nine months operating cash flow only used up 13.9 million compared to 26.4 million in the prior period. This is mainly driven by our careful management of inventory levels. Our inventory stood at 372.8 million 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 25. As of March 31st, 25 our days inventory outstanding were right at our long-term target of 260 days. Cash flow from investing only used up 0.6 million in the quarter and only 2.3 million in the first nine months of fiscal year 25. The heavy investments in our new tech platform and the move to new center warehouse all have been completed successfully. And we're now returning to our expected long-term capex average of below 1% of GMB. We ended the quarter with 14.2 million cash at hand and a 25 million cash utilization of our 75 million revolver. The solid financial performance in the third quarter of fiscal year 25 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 personal sentiment and the global economy still remains unclear. We therefore for the full fiscal year ending June 30th. 2025. Expect the lower end of our given guidance of GMB and net sales growth between 7 and 13% for the legacy mytreaser standalone business. Given our continued focus on profitability, we confirm our guidance on adjusted EBITDA margin between 3 and 5%. The acquisition of -A-Porté in the fourth quarter of our fiscal year 25 is expected to add another 300 to 350 million net sales and an adjusted EBITDA loss of 20 to 30 million to the legacy mytreaser standalone business fiscal year 25 numbers ending on June 30, 2025. With all of the above it comes as no surprise that we are very confident in the continued success of mytreaser business as a cornerstone of our new lax experience group. With the successful closing of the acquisition of -A-Porté 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 billion net sales and an adjusted EBITDA margin of 7 to 9%. 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 lax experience. And with that I hand over to Michael for his concluding remarks.

Thank you, Martin. We are very pleased with our third quarter of fiscal year 2025 earnings results. We have seen a continued performance improvement 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 experience. We see ourselves as well prepared for the formation of lax experience and the transformation of the combined business to the world-leading multi-brand digital luxury platform creating significant value for high-end customers brand partners and shareholders. And with that I ask the operator to open the line for your questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Once again, if you have dialed in and would like to ask a question, please press par followed by the number one on your telephone keypad. If you would like to withdraw your question simply press par one again. As a reminder, we'll ask everyone to stick to one question and one follow-up so we can take as many questions as possible. Thank you. If you are called upon to ask your question and are listening to the allowed speaker on your device, please pick up your handset and make sure that your phone is not on mute when asking your question. Once again, that is to press par one to ask a question. The first question comes from the line of Oliver Chen with TB Calhoun. Please go ahead.

Hi there. This is Katie on for Oliver Chen. I'd like to ask a question about the full Q sales guidance and what's assumed for the legacy, my truth of 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 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.

Thank you. I'm happy to give a bit of insight on the assumptions, but of course mathematically it is pretty clear if you assume if 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 beginning of April. Some of them were reversed. We saw very positive development on Monday. So we at the moment expect a slower demand than the Q in the first In the last quarter based on uncertainty, particularly in the North American market as we highlighted today in our call, the strongest region in Q3 was Europe with 8%. US North America used to be the strongest region. So that's where we feel uncertainty and therefore caution is warranted as we simply don't know.

I

mean how new changes would influence our business model of sending products to customs into North America. So current decreases for China made in China terms are great. There was a report that the minimums 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 Marjane, you want to add anything?

Yeah, I mean, but you picked up the growth assumption for Q4, right? And we just 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 apply that we are, that we expect to grow in Q4 obviously at a low rate, 4 to 7% in Q4 to arrive at the lower end of the top line guides.

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 most significant drivers to the gross margin improvement in Q3?

So on pricing, I think we always have to consider the lag effects 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-winter merchandise, which is arriving, but the current season which has price decisions that were taken months ago. So that's in that part and gross margin, the biggest influence of gross margin is full price selling. How high is the share of full price? That's the biggest driver for the margin improvements that we expect.

Very helpful. Thank you.

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

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

Thank you, Matt. No, I think

this

is really influenced by the short-term impact that we have seen. It's a multi-faceted game. I mean, as you know, a lot of our customers are managers, our 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. Was there something broken by these decisions? I don't see that. Have these decisions over the last couple of weeks really created uncertainties, definitely, and as always in the consumer game, stability is the key. If the new number is X, but that is a guaranteed new number, companies can adopt to it, consumers can adopt to it. We have unfortunately seen more, the numbers change all the time. 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.

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

Yeah, Matt, I mean, we always said that the medium term, we want to go back to the 7 to 9 percent and we will go back. The question is, the key determining factor of this reverse, we always mentioned is the continuous improvement in the cross-propert 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, 150 basis points. So we are right on track in improving the overall adjusted EBITDA margin. 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 giving the uncertainty in the top line, obviously has some effect on the profitability, but we explicitly kept the 3 to 5 percent 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 percent. This is in the medium term and we will continue this trajectory and then in our September call, we'll give the guidance for the next fiscal year, fiscal year 2026. 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 percent.

That's great color. Michael, just one quick follow up on the dampening that you cited. Have you seen that both in the US and in Europe?

More so in the US.

Great. Best of luck.

Once again, if you would like to ask a question, please press star followed by the number one on your telephone keypad. The next question comes from the line of Ashley Helgens called the Older Jeffries. Please go ahead.

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 US 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.

Yeah, easy on the second one Blake. Our top customer group in the US in the last quarter our business grew even by 12 percent. So that business is intact. It's a third of as we have seen in the past. What does 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 top is fully intact. There are these shocks that you see with the shocks that the equity markets took this time. The aspirational the occasional customers not speaking to their well, just speaking to their spending patterns are always impacted more so and so it's even deeper polarization. But again, what we have observed seems to us a snapshot seems to 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 -by-month basis, it has started end of January and and then you get peaks with events. I mean, we are really in an eventful moment and the stock market, but it's also macro crisis in regions. I don't know. 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 improvements. We can confirm cost control. So while the top line is not fully controllable our business model allows us to control our bottom line.

That's super helpful. And just to follow up on that. I wanted to ask on gross margin specifically and you kind of just referenced the ability to still grow margins and maintain profitability. But how do 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?

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

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 and if you could talk any more about, you know, indirect versus direct tariff impacts and maybe China exposure specifically.

We had different tariff impacts. One is of course that there is a flat increase by 10% for product going into the US and then of course made in China has very high and they were not reversed. They're still in place and Monday I understanding it was a decision to reduce some 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 and therefore there is an impact on the US Channel and there is an impact for product made in China, but that impact is at this stage controllable. Obviously it's duty rates, which we had at 140%. You cannot pass that along that effectively means you cannot sell the product.

Really appreciate the color. That's the black.

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