Mytheresa Improved Sales and Profitability in Fiscal Q4, Sees Momentum Continuing

Transcending the malaise permeating much of the luxury sector, Mytheresa on Thursday reported top- and bottom-line progress for its fiscal fourth quarter and year, and expects the momentum to continue.

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The Munich-based company narrowed its bottom-line loss to 3.6 million euros in its fiscal fourth quarter, which ended June 30, compared to a loss of 5.4 million euros in the year-ago period.

Adjusted net income in the fiscal fourth quarter grew to 4.5 million euros, from 1.1 million euros in the year-ago period. The adjustments include one-time effects such as share-based-compensation, transaction-related costs and legal costs.

Net sales in the fiscal fourth quarter rose 9.7 percent to 223.2 million euros from 203.4 million euros in the fourth quarter of 2023. Gross merchandise value rose 7.8 percent to 239.3 million euros from 221.9 million euros in the year-ago period.

“We’ve been busy, and successful,” Mytheresa chief executive officer Michael Kliger told WWD. “The key message is that the momentum we saw in fiscal third quarter continued into the fourth quarter. We had a very strong fourth quarter, with an adjusted profit margin of 4.7 percent, which gives us an adjusted profit margin of 4.3 percent for the second half, compared to 1.7 percent for the first half of the fiscal year.

“Our second-half revenue growth was plus 14 percent, which gives us a plus 10 percent revenue growth for the full year,” Kliger said, noting business accelerated in the second half from the soft first half.

“There’s more momentum going in the new fiscal year,” Kliger said. “The first weeks of the current fiscal year, through July and August, support that.” Kliger said the company is now projecting 7 to 13 percent net sales growth and 3 to 5 percent adjusted EBITDA for fiscal 2025. “We do see continued uncertainties and macro headwinds, but what we also see is that the U.S. is quite strong for us.”

Kliger added that the second-half momentum was “clearly” shaped by spring 2024 and fall 2024 collections. “These two seasons saw a much better balance between demand and supply. In previous seasons there was a glut of product, leading to heavy discounting, particularly starting in early autumn last year, reducing margin for everyone,” he said.

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Kliger also said Mytheresa’s second half benefited from the difficulties experienced by competitors, particularly those operating luxury websites. “Matches went out of business. Farfetch switched ownership and has been cutting costs. Net-a-porter continues to struggle,” Kliger said.

Kliger suggested the Saks and Neiman Marcus deal, which is expected to close possibly later this year or early next year, is an internal distraction for both of those retailers, possibly affecting performance in the marketplace. But Kliger added that the merger “could be a very powerful combination. There is an industry logic to it, but whether it ends up being a strong combination will be decided in the next two or three years. There’s great potential here, and this could create a very forceful competitor, but it’s not automatic. We observe it. We monitor it, but we don’t base our own strategy on it. Paying a lot of attention to partnerships [with brands] is a key element for us as an operator and a differentiator.”

By region, there was particular strength in the U.S. where sales grew more than 20 percent range in the last quarter, while Europe grew 11 percent. Asia, Kliger added, “continues to struggle.”

“We do benefit from our focus on true luxury customers,” Kliger said. It’s a sector spending better than aspirational customers. He said that 3.7 percent of Mytheresa’s customer base account for 39.2 percent of revenues. The 3.7 percent are spending more than six figures at Mytheresa.

Asked what has been selling best, Kliger cited women’s ready-to-wear with “real strengths with brands that have been traditionally strong and speak to wardrobe building, including The Row and Brunello Cucinelli.” Fine jewelry, Kliger said, “has seen good momentum. There is a trend to buy gems, gold and silver, and custom-made pieces. Bags are still spotty. The bag industry was over indexing on Asian customers.” In menswear, Kliger said street styles are struggling, while higher price points in suiting from Loro Piana and Cucinelli are selling.

For the full fiscal year, adjusted net income came to 7.7 million euros, compared to 18.4 million euros in fiscal 2023. Net sales increased to 840.9 million euros, a 9.8 percent gain from 766 million euros in fiscal year 2023. GMV grew 7.1 percent to 913.6 million euros compared to 853.2 million euros in fiscal year 2023. Gross profit margin of 45.7 percent compared to 49.6 percent in the prior year.

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