LuxExperience's Q4 2025 Earnings Call: Emerging Contradictions in Consumer Sentiment, Regional Growth, and Inventory Management

The above is the analysis of the conflicting points in this earnings call

Date of Call: September 25, 2025

Financials Results

• Revenue: €2.8B illustrative FY25 net sales, down 5.9% YOY; €1.3B reported for FY25

Guidance:

• FY26 GMV expected at €2.5B–€2.9B; transition year
• FY26 adjusted EBITDA margin between -4% and +1%, broadly similar to FY25
• Mytheresa to grow GMV; NET-A-PORTER & MR PORTER to decline slightly; Off-Price to decrease considerably
• Off-Price targeted to return to adjusted EBITDA profitability in 18–24 months
• Medium term: 10%–15% annual growth; ~€4B revenues; 7%–9% adjusted EBITDA margin (~€320M)
• Positive operating cash flow expected in 2–2.5 years; FY26 will be a cash consumption year
• Regional assumptions: strong Europe and continued U.S. growth; Asia/China weak with no outsized growth assumed

Business Commentary:

* Mytheresa Business Performance: - Mytheresa reported net sales growth of 11.5% for Q4 fiscal year '25, with the full fiscal year growth at 8.9%. The gross profit margin increased by 90 basis points in Q4 and 130 basis points for the full fiscal year. - The growth was driven by the company's focus on wardrobe building among luxury customers, leading to a 16.1% increase in top customer spending and a 3.8% share of total customers but 42.6% of total GMV.

• Off-price Segment Transformation:
• Off-price segment net sales decreased by 17.4% in Q4, but with an average order value increase of 17.4% last 12 months.

• The decline resulted from the discontinued marketplace model and clearance activities, but the segment is undergoing restructuring to improve efficiency and focus on off-season luxury shopping.

• Profitability Improvement Across Segments:

• The Luxury segment reported an adjusted EBITDA margin of minus 1.1% for Q4, with the Off-price segment experiencing minus 17.9% adjusted EBITDA margin.

• The Luxury segment is expected to achieve profitability improvements with a new leadership team, better merchandising, and marketing strategies, while Off-price will focus on cost efficiencies and operational restructuring.

• Guidance for Fiscal Year 2026:

• LuxExperience expects GMV to be around EUR 2.5 billion to EUR 2.9 billion in fiscal year 2026, with an adjusted EBITDA margin between minus 4% and plus 1%.
• The guidance considers ongoing uncertainties, including U.S. customs effects and the need for transitional restructuring in some segments.

Sentiment Analysis:

• Management highlighted strong Mytheresa results and margin expansion, but noted declines at NET-A-PORTER/MR PORTER and Off-Price and called FY26 a transition year. Quotes: “We are extremely pleased with the results of the Mytheresa business.” “NAP & MRP… net sales declined… Off-Price… declined.” “FY26 will be a transition year… adjusted EBITDA margin between minus 4% and plus 1%.” They cited volatile consumer sentiment and restructuring needs but expressed confidence in medium-term targets.

Q&A:

• Question from Oliver Chen (TD Cowen): What drove Mytheresa’s AOV/margin upside and margin outlook; timing/road map for SG&A reductions at NET-A-PORTER; impact of U.S. customs on sentiment; and regional assumptions embedded in the €2.5–€2.9B GMV outlook?
  Response: Mytheresa margins should keep improving via full-price focus with strong Europe and continued U.S. growth; SG&A savings led by operations/corporate first, tech over 2–2.5 years; customs impact is containable; guidance assumes strong Europe and U.S., with Asia/China weak and no outsized Asia growth.

• Question from Blake Anderson (Jefferies): What drives the low vs. high end of EBITDA margin guidance and any quarterly cadence or quarter-to-date color?
  Response: Seasonality persists (Q2/Q4 stronger); the lower end reflects prudence amid market uncertainty and ongoing restructuring; wide range set due to macro and transformation variability.

• Question from Oliver Chen (TD Cowen): For NET-A-PORTER, timing to fix inventory/buying and marketing demand creation; how soon could this aid margins?
  Response: Buying resets affect Fall/Winter ’26 with deliveries starting May; marketing, top-customer tactics, and performance marketing changes begin impacting in the first half of next calendar year.

• Question from Oliver Chen (TD Cowen): Promotional environment and opportunities from industry closures; views on designer newness and brand creative shifts?
  Response: Sector consolidation should reduce promotions with better inventory-demand balance; creative changes at major houses bring attention and buying opportunities; team ready to invest behind strong trends.

• Question from Oliver Chen (TD Cowen): Consumer sentiment trends and opportunity with Gucci’s new designer?
  Response: Sentiment improving but volatile; Europe strong, U.S. accelerating, Asia improving off a low base; Gucci buzz is positive but requires sustained execution beyond a strong start.

• Question from Oliver Chen (TD Cowen): Off-Price restructuring—hardest parts, fit with core competencies, and margin recovery timing?
  Response: Key is separating and right-sizing infrastructure to match lower-margin model while staying customer-centric; expect improvements on similar timing as NAP/MRP with adjusted EBITDA profitability in 18–24 months.