MYTHERESA(US:MYTE)2023-05-14 02:18Financial Data and Key Metrics Changes - The company reported a GMV of €219.8 million in Q3 2023, growing 17.8% compared to €186.6 million in the prior year quarter, with a constant currency growth of 15.4% [56] - Net sales increased by €29.4 million or 17.3% to €198.9 million, influenced by brands transitioning to the Curated Platform Model [57] - Gross profit margin in Q3 was 45.6%, a decrease of 320 basis points from 48.8% in the prior year, attributed to increased promotional intensity by competitors [28][49] - Adjusted EBITDA margin was 1.6%, down from 6.4% in the prior year quarter, primarily due to lower gross profit margin [64] Business Line Data and Key Metrics Changes - The top customer base grew by 28.1% compared to Q3 of fiscal year 2022, with average spend per top customer increasing by 6.7% [11][26] - Overall business with top customers grew by 36.8% in GMV compared to Q3 of fiscal year 2022, accounting for 36.0% of total GMV [11][12] - The average last 12 months order value increased by 3.9% in Q3 2023 compared to fiscal year 2022, driven by expansion across luxury categories [16] Market Data and Key Metrics Changes - In the United States, GMV growth was 27.4% compared to Q3 of fiscal year 2022, with the U.S. share of total GMV increasing to 17.7% [15] - Europe experienced a GMV growth of 19.2% compared to Q3 of fiscal year 2022, while Greater China was still impacted by COVID-19 [46][121] - The company reported a 44% share of net sales outside Europe for fiscal year-to-date 2023, up from 41% in the previous year [58] Company Strategy and Development Direction - The company remains focused on high-end wardrobe-building customers and luxury brand partnerships, positioning itself to benefit from ongoing growth in the luxury sector [4][25] - The company is committed to full-price selling and excellence in operations, despite aggressive promotional activities from competitors [3][24] - Recent milestones include the launch of exclusive collaborations with luxury brands and the expansion into new luxury categories, such as pre-owned watches [20][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to achieve growth despite macroeconomic headwinds and competitive pressures [8][25] - The company anticipates a recovery in the Chinese luxury consumer market, supported by recent marketing activations [50][121] - Management views current promotional pressures as transitory and expects to return to normalized inventory levels without excessive clearance activities [60][80] Other Important Information - The company ended Q3 with cash and cash equivalents of €13 million, no long-term bank debt, and an equity ratio of 69%, providing flexibility compared to competitors [86] - Adjusted SG&A expenses increased to €29.7 million, with a ratio of 13.5% of GMV, reflecting higher personnel costs and energy expenses [32] Q&A Session Summary Question: Trends in U.S. luxury demand - Management noted that aspirational customers are slowing down their consumption, while high-end customers continue to show strong demand [70][90] Question: Medium or long-term EBITDA margin targets - Management confirmed that current profitability levels remain stable despite macro challenges, and they are focused on maintaining a strong performance [72][91] Question: Competitive landscape and inventory management - Management highlighted that platforms with a high share of aspirational buyers are facing challenges, while Mytheresa's focus on high-end customers positions it well [93][122] Question: Expectations for China and inventory levels - Management acknowledged that Greater China was still recovering from COVID impacts but noted positive signs of recovery following recent marketing efforts [77][121] Question: Strategy on promotionality and inventory management - Management reiterated their commitment to full-price selling and cautious inventory management, emphasizing the importance of maintaining gross profit margins [125][126]