Mytheresa Logs Another Strong Period Of Quarterly Earnings In Q3 Of FY2023

Mytheresa is sticking to its knitting.

A laser focus on top-spending luxury consumers has been Mytheresa’s winning strategy. MYT Netherlands Parent B.V., the parent company of Mytheresa Group GmbH, released solid earnings today for its third quarter of fiscal year 2023 ended March 31, 2023. The luxury multi-brand digital platform delivered another quarter of growth with continued Adjusted EBITDA profitability, despite significant macro headwinds.

“There are macro headwinds in the market,” Michael Kliger, president and CEO Mythersa told me in a telephone interview. “I think the very good growth that we produced in Q3 is driven by our ongoing and quite successful focus on the high end, on the top-spending customer, the wardrobe builders. The real driver for the quadter was 37% revenue growth from this type of customer. The aspirational, the occasional luxury shoppers continue to be slow.”

General merchandise value grew 17.8% to 219.8 million Euros in the recent third quarter compared to 186.6 million Euros in the prior year period. Net sales increased 17.3% year-over-year to 198.9 million Euros, and gross profit margin was 45.6% compared to 48.8% in the 2022 period due to significant increase in promotional intensity by competitors.

Mytheresa forecast for the full year ended June 30,2023, GMV in the range of 845 million Euros to 860 million Euros a 13% to 15% increase. Net sales for the full year are expected to be in the range of 750 million Euros to 765 million Euros, representing 9% to 11% growth. Gross Profit is predicted in the range of 380 million Euros to 386 million Euros, representing 7% to 9% growth , and adjusted EBITDA in the range of 34 million Euros to 43 million Euros and an adjusted EBITDA margin between 4.5% and 5.5% for the full year.

“You continue with that type of customer and serve them the best that you can. In our case with a particular focus on merchandise and a particular focus on services that these types of customers like,” Kliger said. “We’re very happy, 28% more of those top customers spent 7% more per capita. We continue to push that customer segment.”

Mytheresa in the third quarter launched certified pre-owned watches from over 25 luxury brands, including Audemars Piguet, Cartier, IWC
IWC
Schaffhausen, Jaeger-LeCoultre and others in collaboration with the world’s largest luxury watches and jewelry retailer, Bucherer, with ticket prices ranging from $5,000 to over $100,000.

One of the leading global luxury e-commerce platforms, Mytheresa ships to over 130 countries. Founded as a boutique in 1987, Mytheresa launched online in 2006 and offers ready-to-wear, shoes, handbags and accessories for women, as well as menswear, and kidswear. In 2022, Mytheresa expanded its luxury offering to home décor and lifestyle products with the launch of the LIFE category.

Mytheresa’s highly-curated edit of over 200 brands features Bottega Veneta, Burberry, Dolce & Gabbana, Gucci, Loewe, Loro Piana, Moncler, Prada, Saint Laurent and Valentino, among others. Mytheresa’s unique digital experience includes exclusive differentiated product and content offerings, leading technology and analytical platforms as well as high quality service operations.

Kliger didn’t sugar-coat the global economic situation. “Nevertheless, headwinds are in the market,” he said. “The economic sentiment is dampening demand for the occasional shopper. We do see that there’s excessive inventory in the market which leads to excessive promotions. We don’t focus on that, we’re really focusing on full-price selling, but some of that reaches us.

“The good news is that in this challenging quarter we remain profitable and we are debt-free, so we’re in a very healthy position to weather some of the challenges at the moment and our expectation is that this environment will probably stay until calendar year, which allows us to continue to grab market share, which in turn allows us to be profit-making, and by the end of the year, we expect – no one knows – but we expect the situation will alleviate.”

Mytheresa reported good customer satisfaction with the Net Promoter Score of 72.1% in Q3. Gross Profit Margin was 45.6% in the recent third quarter, below the 2022 third quarter of 320 basis points due to aggressive competitor promotions. Operational indicators in the third quarter shows underlining resilience and adaptability of the Mytheresa business model and stable operational cost ratios despite macro headwinds.

“This business is really characterized by two things,” said Kliger, “one is financial performance, in macro environments that are not easy. While we continue to do this, we continue to push and lay foundations for future growth. That includes the launch of pre-owned watches category, and the continued progress in setting up our new warehouse in Leipzig, Germany.”

Kliger called out the launch of the China Designer Program, “a big event in Shanghai in April. Last, but definitely not least, is the full migration of our technology stack to a new platform,” Kliger said. “We have completely upgraded not just the web site and the apps, but also the product information system. It was a massive multi-year program that was just concluded. The successful global roll out of the new Mytheresa technology stack is powering all user interfaces and providing state-of-the-art e-commerce capabilities. It’s giving us not only the scale for future growth, but a lot of possibilities for personalization and regionalization. It’s a very important milestone.”

The U.S. accounts for 18% of Mytheresa’s business. GMV in the U.S. in the third quarter rose 27.4% versus the same 2022 period. “That’s the strongest GMV growth,” Kliger said. “We feel with our particular focus on luxury we’re having good traction in the U.S.”

The retailer isn’t planning on opening more stores. Its Munich men’s and women’s store represents its origins as a company, but global pop-up shops are on the agenda.

“Our store is the best store in Germany for multi-brand luxury,” Kliger said. “We have no plans to expand our store network, but pop-ups are a very important way of reaching the client and we continue to do that across the world. In the U.S., we had a pop-up in Aspen at the Jerome Hotel. We create pop-ups by reaching out to local communities and setting up styling suites be it in Dallas, Arkansas or North Carolina. We’re ramping up for a pop-up in the Hamptons, like most luxury players.”