Mytheresa Shares Jump on Robust Top Line in Fiscal Q2
Updated 5:24 p.m. ET Feb. 15
Despite a bottom-line loss, Mytheresa is exceeding market expectations and claims it is outperforming competitors amid a challenging and promotional environment for luxury sales online.
That’s the perspective provided by Mytheresa chief executive officer Michael Kliger on Thursday, just after the company reported a net loss of 5.4 million euros in its second fiscal quarter ended Dec. 31, compared to a loss of 500,000 euros in the year-ago period. Adjusted earnings before interest, taxes, depreciation and amortization was 7.9 million euros compared to 17.7 million in the year-ago period.
Still, while confronting continued challenging conditions in Asia and a highly promotional competitive landscape during the last holiday season, Mytheresa showed overall strength on the selling side with strong trends in the U.S. and among its top spending customers. Net sales rose 8.3 percent on a constant currency basis to 197 million euros, or 3.6 percent based on international financial reporting standards, from 190.1 million euros in the year-ago period. Sales in the U.S. rose 17.4 percent with 47.6 percent growth, among the company’s top spending U.S. customers. The number of top customers grew 15.6 percent percent in the second quarter versus the same quarter in 2023.
Watch on FN
After the report was issued, Mytheresa’s stock price jumped 20.2 percent to $3.10.
“We continue to see good traction with our top spending customers, which is always our focus, and we do see a slight return of aspirational customers though not with a vengeance,” Kliger told WWD.
“In the U.S., the count of top customers increased by 47 percent,” Kliger added, noting that the company considers top customers those spending close to or above six figures annually. “They account for around 4 percent of our customers, but nearly 40 percent of the sales,” he said.
Last quarter, the U.S. was the best region. Europe was stable, while Asia remained challenging.
“For the first five weeks of the new quarter [fiscal third quarter] we see a continued acceleration of the business,” Kliger said. “We see ourselves clearly moving ahead of the pack.”
For the full fiscal year ending June 30, the Munich-based luxury website confirmed its guidance for gross merchandise value and net sales growth at 8 to 13 percent; gross profit growth between 8 and 13 percent, and adjusted EBITDA margin between 3 and 5 percent.
Kliger emphasized the company continues to focus on full-price selling, restricting promotions, and top spenders. He also said the company is reducing inventory levels which is increasing the cash flow, and that the company has increased its revolver by 50 percent to 90 million euros, enabling it to borrow more and buy and sell more product when business conditions improve. Cash flow from operating activities reached 18.5 million euros last quarter.
“We feel very well positioned even if some other players are struggling,” Kliger said during a conference call with investors and retail analysts Thursday. Saks, Neiman Marcus, Net-a-Porter and Farfetch, which was sold to South Korea’s Coupang earlier this year, are among those players.
“We are pleased with our results in a challenging market. We surpassed market expectations and also outperformed almost all competitors,” Kliger said. He cited “high promotional intensity in the market” last quarter due to excess seasonal merchandise across the industry.
“We have excellent growth prospects,” he said, noting that the company continues to “evolve and innovate our business model.”
In a statement, Kliger said, “We are pleased with our results in a challenging macro environment. With positive revenue growth and positive adjusted EBITDA in the second quarter, we not only surpassed market expectations but also outperformed almost all competitors. Our resilient business model and our clear focus on the high-spending, wardrobe-building top customers allow us to win market share in the current market environment and we are thus well positioned to benefit and accelerate when market conditions will improve.
“We are very confident about the medium-term outlook for the company.”
Kliger cited several positive developments last quarter, among them:
- Adjusted EBITDA margin of 4 percent.
- Strong average order value in the last 12 months increasing to a record high 672 euros in second-quarter FY24.
- Increase of brand desirability with the immersive “Holiday House” physical luxury activation in Los Angeles with the Flamingo Estate.
- Exclusive capsule collections and pre-launches with Loro Piana, Alexander McQueen, Givenchy, Pucci, Victoria Beckham, Chloé and Alaïa among other designer brands, and unique experiences with Givenchy in Paris and Miu Miu in Vienna.
- The Feb. 2 launch of an immersive shopping app for Apple Vision Pro. Mytheresa had its first transaction (with Saint Laurent) on Vision Pro this week.
- “Excellent” customer satisfaction with a net promoter score of 80.8 percent in the second quarter.
