LuxExperience B.V. Q3 FY2026 Earnings Call - Mytheresa Drives Profitable Growth While Turnaround Gains Traction

Operator: Greetings, welcome to the LuxExperience B.V. third quarter of fiscal year 2026 earnings conference call. At this time, all participants are in a listen-only mode. Today’s call is being recorded, we have allocated 1 hour for prepared remarks and Q&A. It is now my pleasure to introduce your host, Martin Beer, the Chief Financial Officer of LuxExperience B.V.. Thank you, sir. Please begin.

Martin Beer, Chief Financial Officer, LuxExperience B.V.: Thank you, operator, and welcome everyone to the LuxExperience B.V. investor conference call for the third quarter of fiscal year 2026. With me today is our CEO, Michael Kliger. 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 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 at investors.luxexperience.com. I will now turn the call over to Michael.

Michael Kliger, Chief Executive Officer, LuxExperience B.V.: 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 third quarter of fiscal year 2026 of LuxExperience. We are very pleased with the results of the third quarter. We are making great progress with the ongoing transformation as a group. We achieved a GMV growth of +0.3% at constant currency in the third quarter, despite the outbreak of war in the Middle East in March. We also achieved a profitability at group level of +0.9% in adjusted EBITDA margin, which is the second profitable quarter in a row. Finally, we achieved again significant improvements on many KPIs across all 3 business segments, underlining the successful execution of our transformation plan.

We are fully on track and will achieve our guided results for the full fiscal year 2026. Our success story with our Mytheresa business continues as we outpace the market in terms of growth and further improved our profitability despite the geopolitical headwinds in March, which in the meantime have subsided for our resilient customer base. We also saw further improvements at NET-A-PORTER and MR PORTER, driven by the new strategic focus on customer service, full-price selling, and cost discipline. At YOOX, our strategy of focusing on the healthy core of the business and the good progress in implementing a leaner operating model continues to show clear results in line with our expectations.

In addition to our guidance for fiscal year 2026, we therefore also confirm our medium-term target for the group, with net sales of EUR 4 billion and an adjusted EBITDA margin of 7%-9%. Just to provide context for the EUR 4 billion net sales medium-term target, the most recent Bain and Altagamma report estimates the global online luxury market at EUR 75 billion. Overall, LuxExperience is the clear digital multi-brand leader for luxury enthusiasts globally, and we are perfectly positioned to benefit from the sustained growth of digital luxury and the ongoing consolidation within the sector. Before reviewing the performance of the third quarter further, I also want to mention that we have successfully closed the sale of the set of assets powering THE OUTNET on April 30, following the binding agreement announced last October.

We are very confident to have found the right new home for THE OUTNET, and we now are able to solely focus on our YOOX business in off-price. Let me now comment on the performance of the Mytheresa business in more detail. We are very pleased with the strong results in the third quarter of fiscal year 2026, which are fully in line with our expectations. Mytheresa’s clear focus on wardrobe building, big-spending luxury customers, and their need through inspiration by curation, highest quality service, and community building with physical events drove against strong, profitable growth. Our very resilient, consistent business model and excellent execution allowed us to achieve this despite the headwinds from the outbreak of war in the Middle East.

In Q3 of fiscal year 2026, Mytheresa grew its net sales by +9.9% on a constant currency basis compared to Q3 of fiscal year 2025. The first 9 months of fiscal year 2026, net sales grew by +12.0% on a constant currency basis. In the U.S., which is a key market for growth, net sales growth reached +33.8% on a constant currency basis in Q3 fiscal year 2026 compared to Q3 fiscal year 2025. In the third quarter, the U.S. accounted for 25.8% of net sales of our total Mytheresa business. We saw in March the impact of the war in the Middle East on customer sentiment globally, we have already seen again strong growth in the business in the last weeks.

This proves the resilience of our business model as our clients are globally mobile and dipped in sentiment are mostly short-lived. Mytheresa’s financial strengths and continued growth are driven by its outstanding customer base. In the third quarter of fiscal year 2026, the top customer base of Mytheresa grew by +18.6% compared to the prior year period. Furthermore, the average spend per top customer in terms of GMV remained quite stable with -1.5% in Q3 versus Q3 fiscal year 2025. The average order value last 12 months for Mytheresa increased by +12.5% to a record high EUR 847 in Q3 FY 2026, demonstrating the success of our focus on selling full price, high-end luxury products to top customers.

Mytheresa’s gross profit margin grew by 240 basis points in Q3 FY 2026, which further underlines our successful strategy of full price selling. Mytheresa’s customer satisfaction, which we measure by our internal Net Promoter Score, reached 86.8% in Q3 FY 2026, representing the highest quarter score in the last four years. All these figures serve as a testament to the fundamental strengths of our Mytheresa business. Our success with big-spending, wardrobe-building customers makes Mytheresa a highly desired partner for luxury brands. In Q3 FY 2026, we saw again many high-impact campaigns and exclusive product launches underlining Mytheresa’s strong relationships with luxury brands. We were the exclusive pre-launch partner for Demna’s debut as creative director at Gucci with the La Famiglia collection for womenswear and menswear.

We also pre-launched styles of Balenciaga and Alaïa’s runway collections, as well as of Saint Laurent Summer 2026 collection. We launched exclusive runway looks from Loewe and Bottega Veneta’s Spring/Summer 2026 collections for womenswear and menswear. It is also very noteworthy that we launched the namesake brand of Phoebe Philo on our website in March. Please see our investor presentation for more details on these capsules and exclusives. In addition to creating desirability for our top customers with exclusive digital campaigns and product launches, Mytheresa also creates desirability and a sense of community for the top customers through unique money-can’t-buy physical experiences. Highlights included an intimate Valentine’s Day cocktail Mytheresa hosted together with Khaite in attendance of the creative director, Catherine Holstein, at Bemelmans Bar in New York. In Florence, Mytheresa created a one-day experience with Gianvito Rossi for his namesake brand.

Guests enjoyed a private visit to Palazzo Vecchio, followed by a garden welcome and dinner at Villa Cora. Another highlight was an industry cocktail event in Shanghai that we hosted for executives and key partners from leading luxury brands at the iconic Spago Shanghai, reinforcing Mytheresa’s commitment to further strengthen its presence in the Chinese market. Finally, Mytheresa continued to offer guests a captivating experience at the Maison Mytheresa pop-up in St. Moritz. The setting brought Mytheresa’s world to life through trunk shows, presentations, and workshops for invited guests. Please see our investor presentation for more details on these unique money-can-buy experiences. To sum it up, Mytheresa delivered strong profitable growth fully in line with our expectations in the third quarter. We see this as further proof of the strength of our business model and consistency of our execution.

Martin will later show how the strong top-line results translated into excellent bottom-line results. Let me now comment on the luxury segment comprised of NET-A-PORTER and MR PORTER. In the third quarter of fiscal year 2026, we saw continued improvements as a direct result of the new strategic focus on full price selling, cost discipline, and on customers seeking editorial inspiration and brand discovery. In Q3 fiscal year 2026, net sales declined by -5.1% on a constant currency basis versus Q3 fiscal year 2025 for NET-A-PORTER and MR PORTER combined. In the first nine months of fiscal year 2026, net sales declined by -1.6% on a constant currency basis. Europe, excluding the U.K., increased by +4.3% in terms of net sales in Q3 fiscal year 2026 compared to the prior year period.

The overall net sales decline was driven by the ongoing strategic focus on higher value customers. The reduction of promotions compared to Q3 FY 2025. While we saw in March also the impact of the war in the Middle East on customer sentiment globally, we see again solid growth for NET-A-PORTER and MR PORTER in the weeks since end of March, thanks to the resilience of our customer base to such exogenous shocks. While the overall top line for NET-A-PORTER and MR PORTER combined declined in Q3 FY 2026, the average spend in terms of GMV per EIP, the so-called extremely important people, was quite stable, with only -1.4% in Q3 FY 2026 versus Q3 FY 2025. The average order value last 12 months again increased by +7.9% to EUR 865 from NET-A-PORTER and MR PORTER combined.

The gross margin increased by a high 700 basis points in Q3 FY 2026, driven by a higher share of full price sales and significantly reduced discount activities versus last year’s period. The customer satisfaction at NET-A-PORTER, measured by our internal net promoter score, has seen a consecutive improvement from 62.3% in Q1 to 65.3% in Q2, and now 68.1% in Q3, which is an increase by +890 basis points compared to Q3 FY 2025. The secret sauce of LuxExperience experience is clearly showing its effect. All these KPIs point to a significantly improved health and quality of the business of NET-A-PORTER and MR PORTER combined. In the third quarter of FY 2026, NET-A-PORTER and MR PORTER continued to drive customer engagement through uniquely engaging editorial content and unique EIP experiences.

NET-A-PORTER invited VIPs, tastemakers, and EIPs to an exclusive three-day winter experience, including snowshoeing, stargazing, and evenings at a hidden speakeasy cabin in the newly opened One&Only resort in Big Sky in Montana. During fashion month, NET-A-PORTER celebrated New York Fashion Week with a dinner hosted with Willy Chavarria. Attending guests included Julia Fox, Jack Harlow, Becky G, Tove Lo, Lineisy Montero, to name just a few. During London Fashion Week, NET-A-PORTER partnered with Jonathan Anderson for a private tour of his brand new JW Anderson boutique exclusively for NET-A-PORTER EIPs. Moreover, NET-A-PORTER launched its spring/summer 2026 campaign, Le Virage, in March. The series of video-first vignettes, storytelling, and celebrating the new season’s key fashion achieved a global media reach of over 64 million impressions. MR PORTER featured exclusive interviews with Hollywood icons Jon Hamm and Kit Harington on the MR PORTER Journal.

Jon Hamm’s story reached 2.4 million views on Instagram. A video story about Danish brand NN07 reached over 5 million views. MR PORTER also created global EIP events, including a 2-day immersive style suite in Hong Kong, a co-hosted brand dinner with bespoke shoemaker George Cleverley in Miami, and invited 10 guests to an intimate lunch hosted by Sir Paul Smith in London. MR PORTER also launched exclusive capsules, such as a 48-piece capsule with Brunello Cucinelli. Please see our investor presentation for more details on NET-A-PORTER and MR PORTER’s unique editorial content and exclusive events. In summary, the third quarter has seen further sequential improvements at NET-A-PORTER and MR PORTER, fully in line with our ongoing transformation plan for both businesses, despite the headwinds from the war in the Middle East in March. That, by the way, have already decreased significantly in recent weeks.

Martin will later provide more details on the progress achieved in bringing the NET-A-PORTER and MR PORTER luxury segment back to profitability rather soon. Lastly, let me comment on YOOX performance in the third quarter of fiscal year 2026. We are pleased with the progress of the ongoing transformation of YOOX, including the focus on core countries and the implementation of a leaner operating model to better serve the lower margin and lower AOV nature of the off-price business. In parallel, YOOX celebrated a brand rebirth with the successful launch of its new brand identity in line with its new strategy and positioning. In Q3 fiscal year 2026, net sales declined by -7.4% on a constant currency basis, versus Q3 fiscal year 2025 for YOOX.

In the first nine months of FY 2026, net sales declined by -8.9% on a constant currency basis. In Europe, excluding the U.K., a clear geographic focus going forward, net sales increased by +7.0%. Compared to Q3 FY 2025, the overall net sales decline is mainly driven by the reduction of weight of overseas markets with high cost to serve in line with the renewed focus on a healthy geographic core for the YOOX business. While the overall net sales declined for YOOX in Q3 FY 2026, the top spending customer average spend in terms of GMV grew by +1.3% in Q3 FY 2026 versus Q3 FY 2025. The average order value last twelve months increased by +1.7% to EUR 247 in Q3 FY 2026.

The gross profit margin increased by 620 basis points to 37.5% in Q3 fiscal year 2026, as compared to 31.3% in the prior year’s quarter, demonstrating the success of the new strategic focus on the healthy core. YOOX customer satisfaction measured by our internal net promoter score reached 48.8% in Q3 fiscal year 2026, increasing by +1,270 basis points compared to Q3 fiscal year 2025, showcasing also the effect of the LuxExperience secret sauce on YOOX customer service operations. All the above KPIs indicate that the focus on the healthy core of the YOOX business is bearing fruits. In the third quarter of fiscal year 2026, YOOX celebrated the rebirth of its new brand identity in line with its new strategy and positioning.

YOOX unveiled its future color scheme, proprietary layouts, and a renewed tone of voice in March. The rebranding has been rolled out on digital channels with full implementation, including new app and website interfaces and offline packaging planned until the end of the year. The brand rebirth story drove strong media coverage. Please see our investor presentation for more details on the new brand identity. Moreover, YOOX leveraged cultural moments across Milan and Berlin to create memorable experiences signaling the brand’s rebirth. In Berlin, YOOX, together with Sleek Magazine, hosted an exclusive party during Berlin Fashion Week at the famous Borchardt Restaurant that seamlessly blended design, cultural relevance, and community. During Berlinale, YOOX challenged the imagination through a movie-inspired experience at the Italian Embassy party. In Milan, YOOX hosted its timeless brand event, unveiling Camerino, a fitting room installation and new stage for self-expression, creativity, and reinvention.

The event brought together KOLs from the fashion industry and lifestyle media at Palazzina Appiani at the heart of Milan Fashion Week. During Milan Design Week, Yoox introduced Il Camerino, unveiled by Keta Bart. The project was selected as one of the district’s highlights and was introduced during the official press conference. All events boosted customer engagement through community building, delightful experiences, increased the guests’ emotional bond with Yoox, and generated reach on social media and press coverage. Please see our investor presentation for more details on these events. To sum it up, the focus on the healthy core for Yoox continues to show clear improvements in line with our expectations and the brand rebirth of Yoox with a new brand identity and new customer focus has only just begun.

Let me now also provide you with a quick overview on the application and usage of AI at LuxExperience as we have received questions on our approach to this technological seismic shift. For a long time, we have used intelligent algorithms to optimize our customer targeting and marketing spend based on predictive models for customer value estimates. With the revolution of generative AI, we have expanded widely the usage of algorithms to improve the customer experience with better and more personalized real-time content, such as product and newsletter records, on-site search, on-site merchandising, as well as product copy and imagery. We are live here based on our partnership with Google Vertex AI. We are also seeing huge benefits in software development to support our aggressive tech transformation roadmap at NET-A-PORTER and MR PORTER.

We are constantly expanding the use case scenarios with a clear focus on improving the quality and accuracy of our customer experience. Please see our investor presentation for more details on the usage of AI at LuxExperience B.V.. Now, after having reviewed the very good commercial results and improvements across all our businesses, I hand over to Martin to discuss the financial results in detail.

Martin Beer, Chief Financial Officer, LuxExperience B.V.: Thank you, Michael. As Michael mentioned, we are very pleased with our strong results in Q3 of fiscal year 2026, running from January to March 2026, despite headwinds from the Iran conflict. We again achieved a positive adjusted EBITDA margin at +0.9% in the quarter. This is a significant improvement from the -3.2% in the previous year Q3. Despite our focus on improving profitability with deliberately accepting lower sales at that Mr. P and YOOX, we were able for the whole group to keep net sales stable in the quarter. The first nine months of the fiscal year, net sales grew by +1.6% on constant currency. I will detail the second performance a little later, but already want to highlight our continued success at Mytheresa.

There, we again outgrew our peers in the quarter with +9.9% net sales growth at constant currency, taking significant market share and boosting Mytheresa’s adjusted EBITDA profitability by +50% compared to the previous year quarter. In addition to our continued success in strengthening our target customer relationships at all store brands, we also see that the cost initiatives in our transformation plan are working effectively. SG&A costs in Q3 are down -12% or -EUR 15.9 million compared to the previous year period, including capitalized IT costs in previous year. Compared to previous Q2, just three months ago, they’re down -8.6%. In line with simplifying our group structure and focusing our transformation efforts, we have successfully closed the sale of THE OUTNET end of April.

We continue to diligently execute our transformation plan fully in line with our expectations and confirm our medium-term targets of EUR 4 billion in net sales and an adjusted EBITDA margin of 7%-9%. I will speak later to our expectations for the full fiscal year 2026 ending in June 2026. I will first review LuxExperience performance at group level and then walk you through the performance of our three business segments, Luxury Mytheresa, Luxury Net-a-Porter, Mr Porter, and Off Price business of YOOX in more detail. In this call, I will focus top line development on net sales. Our GMV numbers follow a similar pattern and are, as always, fully disclosed in our press release and quarterly report. Unless otherwise stated, all numbers refer to euro.

In Q3 of fiscal year 2026 and at group level, we kept net sales stable in relation to Q3 of previous year and despite deliberate focus on more profitable customer segments at Net-a-Porter, Mr P and YOOX, and despite headwinds from the Iran conflict. In the first nine months of this fiscal year, net sales grew by +1.6% at constant currency. On a reported level, net sales in the quarter declined by -5.2% given the wide euro-US dollar FX movements since last year. For the full fiscal year, we continue to expect reported GMV at around EUR 2.6 billion and net sales at around EUR 2.5 billion. Our SG&A transformation initiatives are clearly visible also at group level. With significantly decreasing our SG&A expenses and despite lower reported top line, our SG&A cost ratio improved again in this quarter.

Compared to the preceding Q1 and Q2 of fiscal year 2026, the SG&A cost ratio decreased 360 basis points from 21.9% in fiscal Q1 and 19.1% in fiscal Q2 to now 18.3% in Q3 fiscal year 2026. In Q3 of fiscal year 2026, the adjusted EBITDA margin on group level was positive at +0.9%, significantly improving from the -3.2% in previous year Q3. This is the second consecutive quarter with positive adjusted EBITDA profitability. Due to the phasing effects between Q3 and Q4, we expect Q4 of the fiscal year to also be around Q3 levels of adjusted EBITDA profitability. For the full fiscal year 2026, we expect to break even on adjusted EBITDA, fully in line with our guidance of -1% to +1%.

In the first nine months of this fiscal year, operating cash flow was at -EUR 117.9 million. We expect that the operating cash burn for the full fiscal year 2026 will stay below this level. This is significantly better than our guidance of a -EUR 150 million maximum operating cash burn. As a reminder, we are executing our transformation plan on a fully funded basis with total cash outflow during all years of the transformation plan to range between -EUR 350 million-EUR 450 million. We expect to break even on an operating cash level in around two years. The group ended Q3 of fiscal year 2026 with cash and cash financial investments of EUR 436.1 million.

Together with our revolving credit facilities, our total available funds are at EUR 612.8 million. We are in an ideal situation to operate the fully funded transformation and our growing business model completely debt-free. Let’s now review the performance of our Mytheresa business. During the third quarter of fiscal year 2026, net sales grew by +9.9% on a constant currency basis to EUR 256.0 million compared to the prior year period. In the first nine months of the fiscal year, net sales grew by +12%. On reported numbers, net sales grew by +5.6% in the quarter and +8.7% in the first nine months. We continue to significantly take share in an overall soft market and with headwinds from the Iran conflict.

For the full fiscal year and on reported numbers, we expect Mytheresa to grow net sales by a high single-digit number. In Q3, Mytheresa’s gross margin increased by 240 basis points to 47.1% as compared to 44.8% in the prior year period. We were able to again significantly increase the gross profit margin with our continued focus on full price sale. This continued success on gross margin level is even more impressive as at the same time we are capturing market share with significant top-line growth. In Q3 of the fiscal year and driven by the new U.S. tariff situation, the shipping and payment cost ratio was up 250 basis points compared to Q3 of fiscal year 2025.

As we pay all duties for our U.S. customers, the cost increase for us is reflected in our shipping and payment cost ratio. We are carefully monitoring and managing duty rate changes in the U.S. In Q3 of fiscal year 2026, the marketing cost ratio decreased by 40 basis points from 10.1% in Q3 of fiscal year 2025 to 9.7%. This is mostly due to a phasing effect between fiscal Q3 and upcoming fiscal Q4. We therefore expect the marketing cost ratio in Q4 to be higher due to promotion marketing costs shifting into Q4. The selling general administrative, SG&A, cost ratio decreased by 80 basis points to 12.2% compared to the prior year quarter due to continuous cost leverage. The low and manageable SG&A cost ratio at Mytheresa has proven effective for the resilience of our business model.

The focus of our transformation plan is to implement this resilience also at NET-A-PORTER and YOOX. Subsequently, the adjusted EBITDA margin at Mytheresa expanded 160 basis points during the quarter to 5.5% as compared to 3.9% in the prior year period. In absolute terms, adjusted EBITDA grew by +50% to EUR 14.1 million versus the prior year quarter. For the first nine months of our fiscal year, the adjusted EBITDA margin significantly improved 190 basis points from 4.3% to 6.1%. In absolute terms, adjusted EBITDA grew by +56.6% to EUR 44.5 million in the first nine months of the fiscal year.

Due to the phasing of some costs items from Q3 into Q4, we expect Q4 to have a similar overall profitability margin of Mytheresa compared to Q3. We are continuing our effective inventory management with inventory levels at Mytheresa up only 3.1% compared to previous year despite continuous strong top-line growth. Let me now comment on the luxury NET-A-PORTER and MR PORTER segment in more detail. In the third quarter of our fiscal year 2026, net sales declined by 5.1% constant currency basis to EUR 231.6 million. In the first nine months of the fiscal year, net sales declined by 1.6%. This is a strong sequential improvement versus the same period in fiscal year 2025. On a reported basis, net sales decreased by -11.7% in the quarter.

The top line decline was a deliberate action to focus on higher value customers and to reduce the promotion intensity compared to the previous year quarter. This is visible in the 700 basis points increase in the gross profit margin. The gross profit margin in Q3 of fiscal year 2026 increased to 48.5% from 41.6% due to a higher full price share and reduced discounting activities as compared to prior year. In the first nine months of the fiscal year, the gross profit margin increased by 250 basis points to 47.3%. With growth in fiscal Q4, we expect NET-A-PORTER to have net sales decline by only a mid-single digit for the full fiscal year 2026. Our focus of our transformation plan remains on bringing down the SG&A expenses.

SG&A expenses in the quarter decreased by EUR -5.6 million or -8.9% compared to previous year. A strong decrease of SG&A expenses as well compared to the preceding quarter, which was fiscal Q2. SG&A expenses went down by EUR 9 million or -13.7%. In the first nine months of the fiscal year, SG&A cost savings amount to EUR 18.0 million or -8.8% of the cost base. All these comparisons include capitalized IT expenses in the previous year for better transparency on the true cost base. With re-embarking on top-line growth in the coming quarters, the SG&A cost ratio is expected to improve even further.

The 23.4% SG&A cost ratio in this quarter compares to the 12.2% of Mytheresa and signals the more than 1,000 basis points opportunity for us to achieve significant cost savings. We will continue to bring down this difference with adjusting the operating model, the IT re-platforming, Corporate overhead cost savings and re-embarking on top line growth. Warehouse closures are executed and delivery models are being adjusted. Studio and customer care operations have already been consolidated. The unified data platform is fully productive and the overall IT re-platforming is being executed according to plan. The layoff programs in all jurisdictions are now fully concluded, but full effects to be visible in Q4 of fiscal year 2026. In sum, our comprehensive turnaround plan until fiscal year 2028 is being executed diligently and fully in line with our expectations.

With a significant improvement in the gross profit margin, the NetMr.P segment again almost broke even in this quarter with an adjusted EBITDA margin at -0.5%. Therefore, also on bottom line, a significant sequential improvement from the -2.5% adjusted EBITDA margin in the first six months of the fiscal year. Inventory levels at NetMr.P are slightly up, +2.8% to previous year. Going forward, we will continue to enable top-line growth at NetMr.P with adequate working capital. Let me now review the financial performance of the off-price business of YOOX. In line with our transformation plan, at YOOX, we are focusing on the healthy core of the business, deprioritizing overseas markets with high cost to serve, discontinuing unprofitable marketplace model, and implementing a lean operating model supported by a simplified off-price tech environment.

Continuing the path of a more comprehensive restructuring effort at YOOX and with focus on the profitable customer cohorts, net sales declined -7.4% on a constant currency basis in Q3 year-over-year to EUR 130.7 million. On reported numbers, net sales declined by -11.4%. This is a sequential improvement to -12.1% in the first half of the fiscal year. Same as in the NetMr.P segment. The focus on the healthy core customer is visible in improvements in the gross profit margin. In Q3 of the fiscal year, the gross profit margin at YOOX increased by 620 basis points to 37.5%.

In the first nine months of the fiscal year, the gross profit margin increased by 250 basis points to 38.9% from 36.4% in the prior year period. The operational focus of YOOX is on a fulfillment model that is profitable, creating a lean business model that’s specifically tailored to the lower gross margin and lower AOV nature of the off-price business of YOOX. In addition to lower duties and therefore reduced shipping payment costs, a core focus of our turnaround plan is to bring down the SG&A cost ratio also at YOOX. The SG&A cost ratio in this quarter was at 22.0% of GMV, down from 26.9% in the previous quarter and 29.5% from Q1 of the fiscal year, and despite significant euro top line.

With this, the SG&A cost ratio in this quarter showed an improvement of 490 basis points compared to the previous two, and 750 basis points improvement compared to Q1 of the fiscal year. On an absolute level, SG&A expenses in Q3 of fiscal year 2026 decreased by EUR 10.3 million or -26.4% compared to previous year Q3. In the first nine months of the fiscal year, SG&A expenses decreased by -EUR 17.9 million or -15.5%. All these comparisons include capitalized IT expenses in the previous year for better transparency on the true cost base. These cost savings were achieved despite the stranded costs from the separation of the output. We are significantly streamlining warehouse, studio, and customer care operations. The tech legacy cleanup and simplification is going well and with full speed.

Corporate costs are trimmed down and aligned to a lean business model. With a focus on healthy European targeted growth, the SG&A cost ratio will continue to decrease to the targeted levels. During the third quarter of fiscal year 2026, the adjusted EBITDA margin improved from -17.3% in Q3 of fiscal year 2025 to -5.5% in Q3 of fiscal year 2026. The -5.5% in this Q3 was also sequential improvement from the -10.9% of the first six months of fiscal year 2026, despite deliberate top-line contraction. With the execution of our defined transformation measures, we expect to return to adjusted EBITDA profitability of YOOX in 12 to 15 months and return to top-line growth already in fiscal year 2027. Inventory levels at YOOX are -11% to previous year.

In fiscal year 2026, which will end next month in June, we are seeing exceptional growth at Mytheresa, gaining market share with significantly improved profitability. NetMr.P is expected to break even in the second half of this fiscal year and is re-embarking on top-line growth as of Q4 of this fiscal year. NetMr.P and YOOX are reporting improved gross profit margins and continuously improving SG&A expenses. Therefore, on group level and for the full fiscal year, we continue to expect reported GMV at around EUR 2.6 billion and net sales at around EUR 2.5 billion. On the bottom line, we expect to break even on adjusted EBITDA, fully in line with our guidance of -1% to +1%. Same as last year, we will communicate our fiscal year 2027 guidance in our Q4 earnings call.

In line with the visible success of our transformation plan, our trajectory towards our medium-term targets remain unchanged. We confirm our medium-term targets with EUR 4 billion net sales at an adjusted EBITDA profitability of plus 7%-9% and the return to 10%-15% annual growth rates. We will continue our track record of diligently executing our plans and delivering what we target. With this, I’ll hand over to Michael for his concluding remarks.

Michael Kliger, Chief Executive Officer, LuxExperience B.V.: Thank you, Martin. We are very pleased with our third quarter fiscal year 2026 earnings results. The third quarter came in fully in line with our expectations for the full fiscal year 2026 for the group. LuxExperience B.V. has delivered strong results and is fully on track with its transformation plan targets for NET-A-PORTER, MR PORTER and YOOX. Mytheresa continues to deliver profitable growth above industry standards, proving the strength and consistency of its business model. At LuxExperience B.V., we possess the secret sauce in digital luxury, creating a community for luxury enthusiasts around the globe. As a group, we are perfectly positioned to benefit from the sustained growth of digital luxury and the ongoing consolidation within the sector, allowing us to capitalize on significant market opportunities.

We will continue to generate significant value for our customers, brand partners, and shareholders as we reach our medium-term targets. with that, I ask the operator to open the line for your questions.

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Oliver Chen with TD Cowen. Your line is open. Please go ahead.

Oliver Chen, Analyst, TD Cowen: Hi, Michael and Martin. Regarding revenue growth and what you’re seeing, I would love your thoughts on the markets and the regions, Asia, U.S., and Europe, in terms of key trends and also if there was upside or downside. Overall revenues were a bit lower than the Street, so your thoughts there as well as interplay with some of your comments on duties, and then there’s a lot of geopolitical events happening, obviously. Follow-up question, Martin. Operating cash burn better than you expected. It sounds like you’re making a lot of outsized progress on the SG&A side, but what led to that? As we look forward to EBITDA margins in the mid to high single-digit range longer term, what are your thoughts given that you’re making so much progress?

It sounds like the fixed cost leverage is a big opportunity as you work towards the 7%-9% adjusted EBITDA margins over the years going forward. Thank you.

Michael Kliger, Chief Executive Officer, LuxExperience B.V.: Thank you, Oliver. Let me take the geographic question, and then Martin can come back to the cash burn and the long-medium-term EBITDA margin expectations. In terms of geography, we see continued strengths in North America, as evidenced by the almost 34% growth of Mytheresa in that region. As mentioned or discussed last time in the quarter, quarterly earnings, Asia has seen sort of the bottom, and then there are little shoots, green shoots of improvements. Therefore we also continue to invest in the region. The Middle East was, particularly the Arabian Peninsula was a very strong region and thus, as highlighted, the outbreak of war in Iran was clearly a headwind in March. We’re very pleased to already state and observe that that dip has subsided.

The headwinds have decreased. We are dealing with a very mobile global audience that is able to relocate, and also the global sentiment that had suffered in March is fully back. We see full strength since the beginning of the last quarter, but still it impacted the quarter, the Q3 we just reported on. In Europe, there are some very strong markets, particularly the southern markets in Europe, where we see good influx of money, of a rich population, and that drives, of course, the demand for luxury group product. The strength in Europe, the solid strength in Europe and the buoyant market in the U.S. is really, in terms of geography, driving our business.

as mentioned, the dip in the Middle East seems to have already gone away, looking at the current trading. Martin, you wanna pick up the other two?

Martin Beer, Chief Financial Officer, LuxExperience B.V.: Yes, I’m happy to answer that. Hi, Oliver. Operating cash burn in the last nine months, you rightfully call that out, minus EUR 118 million. Obviously, very much on Q3, as guided Q3, typical seasonality, cash out and also paying out most of the severance packages from the transformation plan of the layoff program of the 700 people. As expected in Q4, we expect, you know, a slightly positive cash flow. We clearly guide that the operating cash burn of EUR 118 million will be, you know, significantly lower to the EUR 150 million. Which is great, which is good news, and it just shows our continuous focus on costs.

You saw that in the increasing gross profit margin, diligently executing also the cost measures, and we will continue to do so. There is a continuation of the diligent execution of the transformation plan, which is the core driver of the operating cash burn in this fiscal year, what we estimate to be significantly lower than the originally guided maximum operating cash burn of EUR 150 million. As pointed out, the focus, the continued focus on SG&A expenses and the SG&A cost ratio, highlighted hopefully that significantly in the call, is also the key driver for achieving improvement in the adjusted EBITDA profitability.

for as we expect for this, you know, for the full fiscal year to break even, you know, we then, you know, every year, will continue to see increasing adjusted EBITDA margins to 7%-9% in the medium term, significantly driven by an improved SG&A cost ratio. There is, obviously, one effect is the absolute reduction of SG&A expenses, and, re-embarking on top line growth, which will also help on the SG&A cost ratios improvement.

Oliver Chen, Analyst, TD Cowen: Thank you. Very helpful. Best regards.

Operator: Your next question comes from the line of Anna Glaskin with B. Riley Securities. Your line is open. Please go ahead.

Anna Glaskin, Analyst, B. Riley Securities: Hi. Good morning. Thanks for taking my questions. I’d like to follow up on the questions on the impact of Iran and geopolitical headwinds. Was there any 1 segment that saw more of an impact? If you could unpack if that was related to regional differences in mix or if it speaks to something within the core customer of that group. Thanks.

Martin Beer, Chief Financial Officer, LuxExperience B.V.: The most impacted region was, of course, our customers on the Arabic Peninsula being directly affected by warfare. We had a few days of no deliveries, but what is more, and understandably so, people were obviously occupied with different things than shopping. That direct impact has subsided slowly, but still the direct impact on the Arabic Peninsula is still significant. What you always have to consider that our customer base is quite mobile, has multi-residences. We have seen, of course, that customers from the region have moved to other locations. We don’t ship into the region, but we still serve these customers in other geographies. With any of these quite shocking and significant news, there is also global sentiment dip of insecurity.

That is, and that has been the fact for all these unfortunate recent geopolitical events. That is often very short-lived and seems to be also short-lived here. We did see a bit of hesitation in Europe, a bit of hesitation in North America after the outbreak of war. Again, fully understandable. We, our hearts and feelings are with all people that are affected by this. Since April, except for the specific region on the Arabic Peninsula, we are fully back on track with strong growth.

Anna Glaskin, Analyst, B. Riley Securities: Great. Thanks. Then turning back to the GMV per top customer at Mytheresa, I think declined 1.5% in the quarter. Wondering if you could unpack that, should we expect that to return to growth in coming quarters? Thanks.

Martin Beer, Chief Financial Officer, LuxExperience B.V.: I mean, you have to really see that in connection with the massive increase of top customers. We really moved a significant cohort into this highest standard of our customer base. As this sort of rejuvenates our top customer with a lot of new entrants, it is just mathematical that the average spend by moving so many new people into that higher status comes down a bit. I mean, it’s quite stable and therefore quite remarkable that we move a double-digit higher number into the top customer status.

Michael Kliger, Chief Executive Officer, LuxExperience B.V.: Declines slightly. As we then sort of, for better words, digest this massive increase in top customers, we will come back to the pattern that you have seen for many quarters now that the top base continues to spend more each quarter per capita.

Anna Glaskin, Analyst, B. Riley Securities: Got it. Thank you.

Operator: Your next question comes from the line of Blake Anderson with Jefferies. Your line is open. Please go ahead.

Blake Anderson, Analyst, Jefferies: Hi. Congrats on the nice results, and thanks for taking my questions. I just wanted to ask one more to start out on the Middle East conflict. Have you seen any impact on the cost side from higher energy or fuel costs that we should be considering, such as shipping or logistics?

Michael Kliger, Chief Executive Officer, LuxExperience B.V.: I mean, again, the rates and the quantity prices have been quickly fluctuating up and down. Yes, carriers, of course, pass on surcharges that particularly in air freight have been levied. That is a direct measurable impact. Again, all of that with our business model has to be seen in context of, on Mytheresa and on Net-a-Porter, Mr Porter, of average basket size of EUR 850. The value of the products we ship let us quite rapidly mitigate those surcharges. Medium-term longer effects, we cannot observe, but that was a specific effect as soon as oil and combustion fuels have gone up in price.

Blake Anderson, Analyst, Jefferies: Perfect. That’s helpful. Then wanted to just drill down on the Mytheresa U.S. business. That continues to be really strong. I know there’s some industry maybe tailwinds that you’re experiencing there from consolidation. As we think about that 30% plus growth rate, and you’re looking out over the next 12 to 18 months, how are you ensuring and planning for growth there and trying to sustain the momentum?

Michael Kliger, Chief Executive Officer, LuxExperience B.V.: Absolutely. The US market, the US consumer is, and has been for quite some time, a growth engine for Mytheresa, is also growth engine for the group. Martin explicitly stated that marketing cost in the Q4 will actually go up as we invest, as we see opportunities to engage with clients. We’re gearing up for a fantastic event in June in L.A. Hopefully the outbreak of wildfires is not risking any of that. We are returning to the Hamptons. We will have a great engagement with On the NET-A-PORTER side, you heard about the One&Only Big Sky event in Montana. We’re investing.

We know and see and observe there is an audience that is reorientating itself in a retail landscape that is changing quite dramatically, and we wanna capture as many hearts and souls as possible at the moment.

Blake Anderson, Analyst, Jefferies: Got it. That’s really helpful. Then on the luxury YNAP business, wanted to ask, you talked about pulling back on promotions and trying to have higher full price selling. How much more work to go is there? I know you mentioned that I think top customers are around 10% of total customers. Could you remind us your percentage of sales from top customers and where you’re trying to take that over time, and kind of what are the impacts we should see over the next few quarters from that strategic shift?

Michael Kliger, Chief Executive Officer, LuxExperience B.V.: I mean, the good news is that we started this process last April as we took over the company. Therefore, with Q4, a lot of that sort of promo detox will have been done. That’s the good news. We stepped into right away. We fundamentally think it’s the wrong approach, and therefore, we immediately start stripping out those promotions and discounts. As highlighted in the call by Martin, the significant increase in gross profit margin in this quarter because we were actually lapping a highly promotional quarter last year, which was effectively the last quarter under previous management.

In terms of the share, we absolutely see it as the right target to have the same share of top customer business. If you look into our investor presentation, top customer share of total customers in terms of size was 9.7 for Mytheresa in that quarter that we just reported on, and 10% for Net-a-Porter. Sorry, was 9.7 for Mytheresa and 10% for Net-a-Porter. We are getting there, and the famous 4% making 40% ratio is absolutely something that we aspire to deliver also for Net-a-Porter, MR PORTER.

Blake Anderson, Analyst, Jefferies: That’s very helpful. Thanks so much, and best of luck for the rest of the year.

Operator: Your next question comes from the line of Yawen Gao with CICC. Your line is open. Please go ahead.

Yawen Gao, Analyst, CICC: Hi, Michael and Martin. Thanks for taking my questions. As we can see the AOV, I think for all segments are going up, especially for the luxury and Mytheresa segments. Do you believe this is more driven by the increasing shares of top customers, or is it a more structural changes or any other reasons we should look for? Thank you.

Michael Kliger, Chief Executive Officer, LuxExperience B.V.: Thank you for your question. There are multiple factors as always, and the ones you mentioned are right on. Higher presence of top customers, they buy into the higher price points, into the more valuable products, that’s one. We have been quite successful over the last quarters building out our fine jewelry business. That’s the fastest growing subcategory on both sides, actually, on NET-A-PORTER, MR PORTER and on Mytheresa. We’ve added, like just in the quarter we just reported, Messika as a new fine jewelry brand. Of course, adding to the mix pieces around EUR 50,000, EUR 80,000 has an immediate impact on the average AOV.

The factors you mentioned contribute, but I just wanted to add that also increasing share of fine jewelry contributes to the ongoing increase in AOV.

Yawen Gao, Analyst, CICC: Got you. Thank you. It is very helpful.

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