LuxExperience B.V. Q1 FY2026 earnings call

• LuxExperience is the clear digital multi-brand leader for luxury enthusiasts worldwide. The 3 segments are Luxury Mytheresa, Luxury NET-A-PORTER and MR PORTER, as well as Off-Price.
• Mytheresa delivered strong growth and profitability despite macro headwinds, with top customer base and average spend per top customer growing. Launched many exclusive product launches and hosted top customer events.
• Luxury NET-A-PORTER and MR PORTER showed first signs of commercial turnaround with focus on luxury customers, editorial inspiration and brand discovery. Launched exclusive campaigns and product launches, and created unique customer experiences.
• Off-Price segment sold THE OUTNET assets as a strategic step, focusing YOOX on healthy core business, with net sales decline in short term but aim for solid profitability.

Mytheresa

• In Q1 of fiscal year 2026, net sales grew by 12.2% compared to Q1 fiscal year '25. Net sales growth in the United States reached 21.9%, accounting for 22.1% of total business net sales. GMV grew by 13.5% to $245.9 million. Gross profit margin increased by 70 basis points to 44.6%. Adjusted EBITDA grew by EUR 5 million to EUR 7.9 million. Inventory levels were up 4% despite double-digit growth.

Luxury NET-A-PORTER and MR PORTER

• In Q1 of fiscal year 2026, combined net sales declined by 10.8% compared to Q1 fiscal year '25. Gross profit margin increased by 130 basis points to 47.8%. SG&A expenses decreased, but the SG&A cost ratio increased marginally. Expected to achieve adjusted EBITDA margin of 7% - 9% medium term and breakeven on adjusted EBITDA margin level in fiscal year '27. Inventory levels were down 8.8% compared to previous year.

Off-Price (YOOX)

• In Q1 of fiscal year 2026, GMV and net sales declined by 19.3% and 16.5% respectively. Gross profit margin increased by 400 basis points to 36.5%. SG&A expenses decreased, but certain costs were allocated due to THE OUTNET divestment. Expected to return to adjusted EBITDA profitability in 15 - 21 months and return to topline growth in fiscal year '27. Inventory levels were down 13% compared to previous year.

• For fiscal year 2026, expect LuxExperience's GMV at around EUR 2.4 billion to EUR 2.7 billion and an adjusted EBITDA margin between -2% and +1%.
• Mytheresa to grow mid- to high single digits in full fiscal year 2026.
• NET-A-PORTER and MR PORTER to show growth in the second half of fiscal year 2026 but decline by low single digits for the full year.
• YOOX to continue adjusting revenue base downwards but at a lower extent in the second half of fiscal year 2026.
• Medium-term targets: adjusted EBITDA profitability at 7% - 9% and return to 10% - 15% annual growth rates.

• Factors causing actual results to differ materially, including risks in annual report.
• Risks related to THE OUTNET asset sale closing conditions, such as customary regulatory approvals and payment adjustments based on inventory levels.
• Market macro environment changes affecting business performance.
• Uncertainties in the transformation process of each business segment.

Q: So I wanted to ask on the acquisition. It looks like it's been almost 7 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?

A: 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, we -- 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 YOOX. 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 are, 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 multiyear 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.

Q: So I have 2, if that's okay. First, there is this idea that fashion trends follow a pendulum swinging from maximal ease and colorful style to more quiet luxury ones, the latest being more in favor over the recent past. We recently saw sea waves of fashion designers change doing 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 bolder Lux and the overall interest for the luxury category? Have the 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.

A: 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 feminine, more femininity across many, many brands. We clearly see more buzz. We clearly see more interest. Most of these collections have not dropped yet. 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, Brunello 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 Mytheresa, 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 is 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 NET-A-PORTER and on Mytheresa for fine jewelry in the neighborhood of 20,000, 50,000 pieces. So we are gradually moving up into very nice price points, of course, not odd jewelry, but real luxury products.

Q: This is Nicholas Sylvia on for Oliver Chen. 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 THE OUTNET? And my second question is if you could just speak a little bit more on what you're seeing regionally.

A: Yes, maybe I'll take the first question on the guidance, yes, we adjusted upwards. So we had adjusted EBITDA margin for the group minus 4% to plus 1% previously and therefore, now guide towards minus 2%, plus 1%. So if you take the midpoint, it's an improvement. Obviously, the -- 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 reembarking on growth. But for us, and we outlined that in the -- in multiple last calls, the SG&A cost ratio was 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 EUR 15 million, if you combine the 2x YNAP 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 NET-A-PORTER, MR PORTER already in the second half of this fiscal year to show growth. And this will obviously also help on the -- on a ratio logic that from a lower expense base to then have obviously profitability improvement on the whole group reembarking on the growth trajectory again. And it always helps to be the #1 worldwide to really push also on the growth side.

A: Yes. And let me talk about geography. We continue to see very good traction in the U.S. We highlighted it 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 -- these 2 geographies. On the YOOX 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 are really looking forward to continued growth in the short term in the U.S. 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 U.S. business and our scale in the U.S. now.