LuxExperience B.V. Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Acquisition Integration: Successfully closed the acquisition of YOOX NET-A-PORTER on April 23. Initiated cost reduction actions across operations, technology migration, created a joint data analytics layer, and announced partial workforce reductions. Focus is on establishing a new operating model for the group.
• Mytheresa Performance: Demonstrated strong results with 11.5% Q4 net sales growth and 8.9% full year growth. Focus on full-price selling, top customers grew by 3.6% in Q4, average spend per top customer increased, and average order value rose by 10% to EUR 773. Hosted exclusive product launches and physical experiences for top customers.
• Luxury Segments (NET-A-PORTER and MR PORTER): New leadership teams in place. Focus on strengthening brand identities, refocusing on high-end customers. Expecting transformation to bear fruit soon despite current sales declines due to past marketing and merchandise issues.
• Off-price Segment: Suffered from lack of resources and marketing spend. Separated from luxury, streamlined operations, and put in place separate leadership teams. Actions taken to restructure but still facing sales decline challenges.

Segment Performance

• Luxury Mytheresa: In Q4, net sales increased by +11.5% to EUR 248.9 million, and for the full fiscal year, it grew by 8.9% to EUR 916.1 million. GMV in Q4 was EUR 265.9 million (+11.1% growth) and EUR 988.5 million for the full year (+8.2% growth). Gross profit margin in Q4 increased by 90 basis points to 48.3%, and for the full fiscal year, it rose by 130 basis points to 47%. Adjusted EBITDA margin in Q4 was 6.5% and 4.9% for the full year.
• Luxury Net-A-PORTER and MR PORTER: Q4 net sales decreased by -8.9%, and for the full fiscal year, it was -10.9%. The average order value on a LTM basis increased by +14.5% to EUR 811. Adjusted EBITDA margin in Q4 was -1.1% and -0.7% on an LTM basis.
• Off-price (YOOX and THE OUTNET): Q4 net sales decreased by -17.4%, and for the full fiscal year, it was -13.2%. The average order value on a LTM basis increased by +17.4% to EUR 292. Gross profit margin in Q4 was 37.9%, and adjusted EBITDA margin in Q4 was -17.9% and -12.1% on an LTM basis.

Guidance

• Medium term expects EUR 4 billion in net sales and an adjusted EBITDA margin of 7% to 9%.
• Fiscal year 2026 is a transition year, expecting GMV at around EUR 2.5 billion to EUR 2.9 billion.
• Mytheresa is expected to continue growing, NAP & MR PORTER to slightly decline, and Off-price to continue restructuring.

Risks

• Persistent uncertainties on U.S. customs effects impacting worldwide customer sentiment.
• Challenges in restructuring the Off-price segment due to different buying techniques and customer base.
• Previous lack of marketing spend and investments affecting the performance of NAP & MR PORTER.

Question and Answer

Q: On the Mytheresa business, the AOV, margins, SG&A road map, customs, and regional growth.

A: Michael and Martin discussed Mytheresa's margin improvement, SG&A actions focusing on operations, corporate functions, technology, and data leverage, containable customs effects on customer sentiment, and continued strong growth in Europe, U.S., with Asia having potential once situation improves.

Q: On NET-A-PORTER's inventory, marketing, promotional environment, designer landscape.

A: Michael talked about lead time for assortment changes in Fall/Winter '26, marketing tactics to engage top customers, consolidation in the sector reducing promotional activities, and new designer opportunities at brands like Gucci, Bottega, and Versace.

Q: On the off-price division's challenges and margin structure.

A: Michael mentioned the different business model of Off-price, separation of infrastructure from luxury to fit its gross profit margin, and similar time horizon for margin improvement as the NAP & MR PORTER luxury segment, focusing on customer needs and frugal operations.