Earnings call transcript: LuxExperience BV Q3 2025 sees steady growth

Luxe Experience (LXEXP) reported a 3.8% increase in net sales for Q3 FY2025, reaching €242.5 million. The company also saw an improvement in its gross profit margin, which rose by 140 basis points to 44.8%. Despite the positive financial performance, Luxe Experience’s stock closed at €8.53, reflecting a 2.34% decline from the previous session. While the stock has faced recent pressure, dropping over 30% in the past six months according to InvestingPro data, it maintains an impressive 124% gain over the past year. The luxury market’s macro uncertainties and geographical disparities in performance, particularly in North America, contributed to this stock movement.

Key Takeaways

• LuxExperience’s net sales grew by 3.8% in Q3 FY2025.
• Gross profit margin increased to 44.8%.
• Stock price fell by 2.34% post-earnings announcement.
• The company maintained a strong position in the digital luxury retail sector.
• North American market uncertainties impacted investor sentiment.

Company Performance

Luxe Experience demonstrated a solid performance in Q3 FY2025, with net sales rising by 3.8% to €242.5 million. The company’s strategic focus on exclusive partnerships and product innovation bolstered its market position. However, the luxury market’s macroeconomic uncertainties, particularly in North America, posed challenges.

Financial Highlights

• Revenue: €242.5 million, up 3.8% from the previous year.
• Gross profit margin: 44.8%, up 140 basis points.
• Adjusted EBITDA margin: Increased from 3.8% to 3.9%.
• Positive operating cash flow: €18.7 million.

Outlook & Guidance

Luxe Experience expects fiscal year sales growth at the lower end of its 7-13% target range. The company aims to maintain an adjusted EBITDA margin of 3-5%. Looking ahead, it has set a medium-term goal of achieving €4 billion in net sales with a 7-9% EBITDA margin. The anticipated acquisition of YOOX NET A PORTER is projected to add €300-350 million in net sales.

Executive Commentary

CEO Michael Kieger emphasized the company’s leadership in the consolidating luxury retail sector, highlighting its ability to achieve profitable growth. "While the top line is not fully controllable, our business model allows us to control our bottom line," Kieger stated.

Risks and Challenges

• Macro uncertainties in the luxury market could impact sales.
• The North American market faces increased uncertainty.
• Potential tariffs on China-manufactured goods may affect costs.
• Polarization between top-tier and aspirational customers could influence demand.
• Maintaining gross margin improvements amidst market volatility.

Q&A

During the earnings call, analysts inquired about the pronounced uncertainty in the U.S. market and its potential impact on sales. The company highlighted the resilience of its top customers and continued efforts to improve gross margins despite market challenges.

Full transcript - LuxExperience BV DRC (LUXE) Q3 2025:

Conference Operator: Greetings, and welcome to Lotus Experience Third Quarter Fiscal Year twenty twenty five 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 and A. It is now my pleasure to introduce your host, Martin Baer, Chief Financial Officer of Lux Experience. Thank you, sir.

Please begin.

Martin Baer, Chief Financial Officer, Luxe Experience: Thank you, operator, and welcome, everyone, to the Luxe Experience Investor Conference Call for the Third Quarter of Fiscal Year twenty twenty five, our first investor conference call since we closed the acquisition of YOOX NET A PORTER and changed our company name to Luxe Experience to reflect the best of the combined companies. Today’s call is dedicated for the fiscal Q3 results of the legacy Mytheresa stand alone business. With me today is our CEO, Michael Kieger. Before we begin, we would like to remind you that our discussions today will include forward looking statements. Any statements 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 IFRS on this call. You can find reconciliations of these non IFRS financial measures in our earnings press release, which is available on our Investor Relations website @investors.luxexperience.com. I’ll now turn the call over to Michael.

Michael Kieger, CEO, Luxe Experience: 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 fiscal year twenty twenty five. We are, of course, truly excited to have completed the acquisition of Jukes Nithaprother on April 23 and to now operate the leading global luxury multi brand retail group under the name Luxe 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.

Luxe Experience is now the preeminent multi brand group in digital luxury with combined net sales of around €3,000,000,000 Our medium term ambition is to reach €4,000,000,000 in net sales and seven percent to 9% adjusted EBITDA 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 at Luxe Experian, 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 fiscal year twenty twenty five. With solid revenue growth and positive adjusted EBITDA, we continued to demonstrate our ability to execute well and achieve strong results on 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 gross margin, the strong growth of top customer spend, 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 strength 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 end users, and we create the viability with them also through unique physical experience.

Second, the strong relationship that we have with big spending water 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 prelaunch campaigns that in turn drove our global business growth in the third quarter of fiscal year twenty twenty five. 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 spend were again drivers for improving profitability in terms of adjusted EBITDA 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 and SUV is driving our business.

In the third quarter, our GMV with top customers grew by plus 7.8% compared to the prior year period, underlining resilience of top customers to macro headwinds. This growth was largely driven by an outstanding increase of the average spend per top customer in terms of GMV by plus 17.9% in Q3 fiscal year twenty

Unspecified Executive, Executive, Luxe Experience: twenty five versus Q3 fiscal year twenty

Michael Kieger, CEO, Luxe Experience: twenty four. In The United States, our business with our top customers even grew by plus 12%, driven by the impressive growth of average spend per U. S. Top customer of plus 17.8%. We mentioned already in the last quarter, our two week immersive invite only up presky experience in Aspen in collaboration with Bamilan’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 seventeen 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 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 Style Suites in Miami, Dusseldorf, San Francisco, New York and Hong Kong. We hosted Michelin star dinners in Houston, Washington, D. C. We invited top customers to an intimate lunch with the Kate in the Kate showroom, allowing top customers to meet with Katharine Hohstein, Founder and Creative Director of Kate as well as seeing the latest pieces from the newest collection. Together with Caroline Herrera, we welcomed top customers at the Hotel de Creon, 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 and violating 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 enthusiasts through digital and physical experiences, we organize for our top customers through money can’t buy experiences. In the third quarter, top customers were invited to an event with Alaia 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 Valmarano. We hosted an exclusive dinner with the Creative Director, Christopher Esper, of the namesake brand at Lulu 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 Lemieux. 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 Neb. Together with Pomelato, we also hosted top customers for a two day Milan experience, including a private tour of the renowned Casa Pomelato factory, an elegant dinner at Craco in Galleria, a Pomelato showroom visit, a private guided tour of Casa Forna Fetti and a lunch at the iconic Beach Restaurant. Finally, we hosted a Texan experience with Gucci to celebrate the launch of the exclusive Gucci capsule collection in Austin.

The afternoon started with an intimate cocktail moment with Gucci’s Artistic Director, Camille Micheli, followed by a cocktail party at the famous Austin Hotel, where guests were treated to custom cowboy hat 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 Myteriza brands through global social media amplification. Please see our investor presentation for more details on these unique money can buy experience. 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 which allows us now to distribute PADA 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 men’s wear runway looks from Lueva as well as exclusive bags and accessories from the Lueva Luna New Year collection collection by Manolo Blanik for women’s wear and men’s wear, only available at Maiteretta. We were the exclusive prelaunch partner for Totem’s T Lock clutch bags and the Totem Gardrove collection as well as Etro’s SpringSummer twenty five collection. We also launched exclusive womenswear styles from Balenciaga’s Summer twenty five collection and exclusive men’s wear styles from Todd’s SpringSummer twenty five 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 twenty twenty five. We grew our net sales by plus 3.8% compared to Q3 of fiscal year twenty twenty four. In the first nine months of fiscal year twenty twenty five, net sales grew by plus 8%. The United States saw similar growth with plus 3.9% in Q3 fiscal year twenty twenty five, while in Europe, Germany and The U. K, we experienced a very strong net sales growth with plus 8.1% in the third quarter compared to the prior year period.

First, in the third quarter of fiscal year twenty twenty five, 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 for 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 that reached a record high of 86% in Q3 fiscal year twenty twenty five, demonstrating the consistent excellence of our customer service proposition. Our average order value last twelve months increased by plus 8.8% to an outstanding €753 in Q3 fiscal year twenty twenty five, 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% in terms of adjusted EBITDA 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 twenty twenty five. We see this quarter as further proof that our business can deliver profitable growth even on the 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 Juuk’s Meta Porter.

And now I hand over to Martin to discuss the financial results in detail.

Martin Baer, Chief Financial Officer, Luxe Experience: Thank you, Michael. As Michael already mentioned, we are very excited about our successful closing of the YOOX NET A PORTER acquisition on April 23. 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 Theresa’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 Luxe 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 03/31/2025. We’re very pleased with the financial performance in the third quarter and also in the past nine months of fiscal year ’20 ’20 ’5. In the quarter, we achieved a solid net sales growth of plus 3.8%, fully in line with our guidance. Our AOV LTM again increased plus 8.8% to a record high of €753 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 3.9% in the quarter. We also achieved positive operating cash flow of €18,700,000 with stable inventory levels compared to previous year and achieving our days inventory outstanding target of two sixty days. This underlines MyChris’ 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 1 through 03/31/2025 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 €8,900,000 or plus 3.8% to 242,500,000.0 as compared to €233,600,000 in the prior year quarter. GMV per all customers grew by plus 8.9%, while the GMV per top customer grew even stronger by an impressive 17.9 during Q3 of fiscal year twenty twenty five. For the first nine months of fiscal year twenty twenty five, net sales grew by plus 8% to €667,200,000 fully in line with our given top line guidance for the full fiscal year. GMV increased by €9,500,000 to €261,300,000 in the third quarter of fiscal year twenty twenty five, also a plus 3.8% increase from €251,900,000 in the prior year period. Increasing by €61 per order delivered.

Our average order value LTM grew by plus 8.8%, now standing at a record high of €753 as compared to €692 in the prior year period. The increase in AOV strengthens our unit economics and highlights our strategy of full price selling at the high end of luxury. Our growth was well balanced worldwide with our core market Europe growing by plus 8.1% with a net sales share of 53.8%. The U. S.

Had a share of 22.5%, Rest of World of 23.7%. In the third quarter of fiscal year twenty twenty five, gross profit increased by plus 7.2% to €108,500,000 from $101,300,000 in the prior year quarter. The gross profit margin increased by 140 basis points to 44.8% as compared to 43.4% in Q3 of fiscal year twenty twenty four. This is fully in line what we achieved in the preceding quarters. In a less competitive and discount driven market, we stay true to our strategy of a higher full price share in our curated offer and thus we were able to improve our gross profit margin.

In the last nine months fiscal year twenty twenty five, 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 15.3% prior year to now 14% of GMV. 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 twenty twenty five during which the shipping and payment cost ratio decreased by 90 basis points to 13.8% compared to 14.7% in the prior year period. The marketing cost ratio increased from 9.2% 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 SG and 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 12.2% to 13%. During the first nine months of fiscal year twenty twenty five, adjusted SG and A cost ratio decreased by 40 basis points from 14% from the prior year period to now 13.6%. In Q3 of fiscal year twenty twenty five, adjusted EBITDA increased by €500,000 to €9,300,000 from €8,900,000 in the prior year quarter.

Adjusted EBITDA margin increased from 3.8% to 3.9% For the first nine months of fiscal year twenty twenty five, adjusted EBITDA increased significantly by €13,200,000 at an adjusted EBITDA margin of 4.3% compared to 2.5% in the previous year period, fully supporting our guidance for the full fiscal year. Depreciation and amortization remained stable at 3900000.01.5% of GMV in Q3 of fiscal year twenty twenty five 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 twenty twenty five, adjusted operating income was at €5,500,000 a 20 basis points increased margin at 2.3%. For the first nine months in fiscal year twenty twenty five, operating income was at €16,600,000 a 2.5% margin with a significant improvement to previous year.

We also delivered positive adjusted net income in the quarter at €5,400,000 And for the first nine months of fiscal year twenty twenty five, adjusted net income was at €21,400,000 at a 3.2% margin, also significantly improving from last year. Let’s take a look at the cash flow statement. During the third quarter of fiscal year twenty twenty five, we achieved a positive cash flow from operating activities of plus €18,700,000 compared to minus €11,600,000 in the previous year quarter. This is a €30,300,000 positive cash swing driven by effective working capital management. For the first nine months, operating cash flow only used up €13,900,000 compared to €26,400,000 in the prior year period.

This is mainly driven by our careful management of inventory levels. Our inventories stood at €372,800,000 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 twenty twenty five. As of 03/31/2025, our days inventory outstanding were right at our long term target of two sixty days. Cash flow from investing only used up €600,000 in the quarter and only €2,300,000 in the first nine months of fiscal year twenty twenty five. The heavy investments in our new tech platform and the move to a new central warehouse, all have been completed successfully.

And we’re now returning to our expected long term CapEx average of below 1% of GMV. We ended the quarter with €14,200,000 cash at hand and a €25,000,000 cash utilization of our €75,000,000 revolver. The solid financial performance in the third quarter of fiscal year twenty twenty five 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 customer sentiment and the global economy still remains unclear. We therefore, for the full fiscal year ending 06/30/2025, expect the lower end of our given guidance of GMV and net sales growth between 713% for the legacy Mytresa standalone business.

Given our continued focus on profitability, we confirm our guidance on adjusted EBITDA margin between 35%. The acquisition of YOOX NET A PORTER in the fourth quarter of our fiscal year 2025 is expected to add another 300,000,000 to €350,000,000 net sales and an adjusted EBITDA loss of €20,000,000 to €30,000,000 to the legacy MyTriisa stand alone business fiscal year 2025 numbers ending on 06/30/2025. With all of the above, it comes as no surprise that we are very confident in the continued success of MyTriza business as a cornerstone of our new luxe experience group. With the successful closing of the acquisition of YOOX NET A PORTER, 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 €4,000,000,000 net sales and an adjusted EBITDA margin of seven 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 Luxe experience. And with that, I hand over to Michael for his concluding remarks.

Michael Kieger, CEO, Luxe Experience: Thank you, Markus. We are very pleased with our third quarter fiscal year twenty twenty five earnings results. We have seen a continued performance improvement in 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 experiences. We see ourselves as well prepared for the formation of Luxe experience and the transformation of the combined business to the world’s leading multi brand digital luxury platform, creating significant value for our high end customers, brand partners and Shell.

And with that, I ask the operator to open the line for your questions.

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer As a reminder, we’ll ask everyone to speak to one question and one follow-up so we can take as many questions as possible. Thank you. The first question comes from the line of Oliver Chen with TD Cowen. Please go ahead.

Katie, Analyst, TD Cowen: Hi there. This is Katie on for Oliver Chen. I’d like to ask a question about the 4Q sales guidance and what’s assumed for the legacy MyTeresa 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.

Unspecified Executive, Executive, Luxe Experience: Thank you. I’m happy to give a bit of insight on the assumptions, but of course, mathematically, it is pretty clear if we assume that we believe we’re at the lower end.

Michael Kieger, CEO, Luxe Experience: I think the biggest challenge at the

Unspecified Executive, Executive, Luxe Experience: 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 April. Some of them were reversed. We saw very positive development on Monday. So we, at the moment, expect a slower demand in the first and 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%. U. S, North America used to be the strongest region. So that’s where feel uncertainty, and therefore, is warranted, as we simply don’t know. I mean, how new changes would influence our business model of sending products through customs into North America.

So current decreases for China made a China tariffs upgrade. There was a report that the de minimis 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, Marcin, do you want to add anything?

Martin Baer, Chief Financial Officer, Luxe Experience: Yes. I mean, but you picked up the growth assumption for Q4, right? I mean, 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 imply that we are that we expect to grow in Q4, obviously, at a low rate, percent to 7% in Q4 to arrive at the lower end of the top line guidance.

Katie, Analyst, TD Cowen: 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 the most significant drivers to the gross margin improvement in q three?

Unspecified Executive, Executive, Luxe Experience: So on pricing, I think we always have to consider the lag effect 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 retail merchandise, which is arriving, but the current season is spring summer, which has price decisions that were taken months ago. So that’s on that part. And gross margin, the biggest influence of gross margin is food price selling.

How high is the share of food price? That’s the biggest driver for further margin improvements that we expect.

Katie, Analyst, TD Cowen: Very helpful. Thank you.

Conference Operator: Your next question comes from the line of Matthew Boss with JPMorgan. Please go ahead.

Matthew Boss, Analyst, JPMorgan: 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 changes in sentiment 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 U. S.

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

Unspecified Executive, Executive, Luxe Experience: Thank you, Matt. No, I think this is really influenced by the short term impact that we have seen. It’s a it’s a it’s a multi faceted game. Mean, as you know, a lot of our customers are managers, 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 have these decisions over the last couple of weeks, really created uncertainties? Definitely. And and and as always in 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 it. We have unfortunately seen more the numbers change all the time. So 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.

Matthew Boss, Analyst, JPMorgan: Okay. Great. And then, Martin, just maybe relative to this year’s guidance for 3% to 5% adjusted EBITDA margins for the legacy MyTheresa business, what would be the time line that you see for profitability to return back to the high single digit EBITDA margin that you realized pre pandemic?

Martin Baer, Chief Financial Officer, Luxe Experience: Yes, Matt. I mean, we always said that in the medium term, want to go back to the 7% to 9%, and we will go back. The question is the key determining factor of this reversal we always mentioned is the continuous improvement in the gross profit 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, one hundred and fifty 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 I mean, given the uncertainty in the top line, obviously, has some effect on the profitability, but we explicitly kept the 3% to 5% 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%? 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 twenty twenty six. 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%.

Matthew Boss, Analyst, JPMorgan: That’s great color. Michael, just one quick follow-up. On the dampening that you cited, have you seen that both in The U. S. And in Europe?

Unspecified Executive, Executive, Luxe Experience: More so in The U. S.

Matthew Boss, Analyst, JPMorgan: Great. Best of

Conference Operator: The next question comes from the line of Ashley Helgeschol with Jefferies. Please go ahead.

Blake, Analyst, Jefferies: 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 U. S.

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.

Unspecified Executive, Executive, Luxe Experience: Yeah. Easy on the on the on the on the second one, Blake. Our top customer group in The US in the last quarter, our business grew even by slightly roughly 12%. So that business is intact. It’s a third of as we have seen in the past quarters.

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 ultra top is fully intact. With these shocks that you see, with these shocks that, let’s say, the equity markets took this time, The aspirational, the occasional customers not speaking to their else, just speaking to their spending patterns are always impacted more so. And so it’s an even deeper polarization.

But again, what we have observed seems to us a snapshot seems to us an 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 month by month basis, it has started January and and and then you get peaks with events. I mean, like, we are really in an eventful moment and the stock market, but it’s also macro crisis in regions.

Michael Kieger, CEO, Luxe Experience: I don’t know.

Unspecified Executive, Executive, Luxe Experience: 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 improvement. We can confirm cost control.

So while the top line is not fully controllable, our business model allows us to control our bottom line.

Blake, Analyst, Jefferies: That’s super helpful. And just to follow-up on that, I wanted to I wanted to ask on gross margin specifically, and you kinda just referenced the ability to still grow margins and maintain profitability. But how should 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.

Unspecified Executive, Executive, Luxe Experience: No. We are absolutely able to further increase margin. I mean, the pace and the size of it, we won’t guide now, but we absolutely have the ability to further improve our gross margin.

Blake, Analyst, Jefferies: 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. I don’t know if you could talk anymore about indirect versus direct tariff impacts and maybe China exposure specifically.

Unspecified Executive, Executive, Luxe Experience: Well, I mean, we had different tariff impacts. One is, of course, that there is a flat increase by 10% for product going into The U. S. And then, of course, made in China has very high, and they were not reversed. They’re still in place.

On Monday, my understanding is they there was a decision to reduce them 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 U. S. Channel and there is an impact for product made in China. But that impact is at this stage controllable. Obviously, duty rates, which we had at 140%, you cannot pass that along.

That effectively means you cannot sell the product.

Blake, Analyst, Jefferies: Really appreciate the color. Best of luck.

Conference Operator: And it seems that we have no further questions for today. That concludes the Q and A session in today’s conference call. We thank you for your participation. You may now disconnect your lines. Have a pleasant day, everyone.

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