Lux Experience achieves 12.2% sales growth in Q1, driven by My Theresa's strong performance and strategic divestment of Outnet assets.

Greetings and welcome to the Lux Experience first quarter of fiscal year 2026 earnings conference call. At this time all participants are in a listen only mode. Today's call is being recorded and we have allocated one hour for prepared remarks and Q and A. It is now my pleasure to introduce your host, Martin Beer, the Chief Financial Officer of Lux Experience. Thank you sir. Please begin.

Thank you operator and welcome everyone to the Lux Experience investor conference call for the first quarter of fiscal year 2026. With me today is our CEO Michael Kliger. Before we begin, we'd like to remind you that our discussions today will include forward looking statements. Any comments we make about expectations are forward looking statements and are subject to risks and uncertainties, including the risks and uncertainties described in our annual report. Many factors could cause actual results to differ materially. We are under no duty to update forward looking statements. In addition, we will refer to certain financial measures not reported in accordance with ifrs. On this call you can find reconciliations of these non IFRS financial measures in our earnings press release which is available on our investor relations website@investors.luxexperience.com. I will now turn the call over to Michael.

Thank you Martin, also from my side. A very warm welcome to all of you and thank you for joining our call. We will comment today on the results and performance of the first quarter of fiscal year 2026 of Lux Experience. As a group, we have now become the clear digital multi brand leader for luxury and serious worldwide. We are perfectly positioned to benefit from the expected further growth of the digital luxury market as well as from the ongoing consolidation process among the remaining players. As explained last time, Lux Experience reports on the basis of a new segment reporting structure. The three segments are Luxury, Mytheresa, Luxury, Net-a-Porter and Mr Porter as well as off-price. We are very pleased with the results of the first quarter. Across all three segments we have delivered strong results and and improvement. Mytheresa continues to demonstrate our unique ability to deliver strong growth and profitability despite ongoing macro headwinds. Megaporte and Mr Porter clearly show the first signs of the commercial turnaround which will drive renewed growth and profitability for the two store brands. After years of decline in the off price segment, we anticipated a fundamental transformation by focusing on the healthy core and I am pleased that we have been off to a fast start here also, we just announced that we have reached an agreement to sell the assets powering the Outnet platform to the O Group llc. Shareholders of the O Group LLC include Joseph Addery and Ritesh Punjabi CEO of Timeless Group of Companies. Both are renowned experts in the off price luxury fashion sector. The divestment of the Outnet assets is a strategic step in line with our transformation plan announced in May 2025, which strengthens the operating model by reducing complexity. We believe that we found a great new home for the Outnet and we can now fully focus on the transformation of the YOOX business and the disentanglement of off price from the luxury businesses in the back end. This will allow us to also accelerate the buildup of an efficient infrastructure platform for Net A Porter and vistaporta. The closing of the transaction with the O Group is expected through Q1 of calendar year 2026, subject to certain closing conditions including customary regulatory approvals and payment of the purchase price, which is subject to adjustments based on inventory levels at closing. As a result of the transaction, the off price segment will purely refer to the business of YOOX from now on, while we classify the Outnet as discontinued operations as it is no longer considered part of our core financial performance. Let me now start by commenting on the Mytheresa business. We are extremely pleased with the outstanding results in the first quarter of fiscal year 2026. The ongoing and even accelerating momentum from the previous quarters demonstrates the strength of our business model which focuses on wardrobe building big spending luxury customers. In Q1 of fiscal year 2026, we grew our net sales by plus 12.2% compared to Q1 fiscal year 25. In the United States, which is a key market for our business, net sales growth reached plus 21.9% in Q1 fiscal year 2020 compared to Q1 fiscal year 25. The US accounted for 22.1% of the net sales of our total business in the first quarter. In Europe, excluding Germany, we experienced again an excellent net sales growth of + 14.1% in Q1 fiscal year 2026. Our clear focus on big spending wardrobe building customers is the fundamental driver of our outstanding growth and financial strength at mycareza. In the first quarter of fiscal year 26, the top customer base of mytoreza grew by plus 10.2% compared to the prior year period, significantly higher than in previous quarters. Furthermore, the average spend per top customer in terms of GMV grew again by a very strong plus 15% in Q1 fiscal year 2016 versus Q1 fiscal year 25. The average order value last 12 months for my Pireza increased by a remarkable plus 10.7% to a record €797 in Q1 fiscal year 26, demonstrating the success of our focus on selling full price high end luxury products to top customers. The continued full price focus at Mytheresa is also evident with the again improved gross Profit margin growing by 70 basis points in Q1 fiscal year 26. Our success with big spending, wardrobe building customers makes Mytheresa a highly desired partner for luxury brands. In the first quarter of fiscal year 26 we saw again many high impact campaigns and exclusive product launches underlining Mytheresa's strong relationships with luxury brands. We launched exclusive styles from the UEVA Fall Winter 25 Runway collection for womenswear and menswear only available at My Theresa as well as an exclusive womenswear Max Mara Cashmere capsule collection only available at Mytheresa. We were the exclusive pre launch Partner for Brunello Cuccinelli's Fall Winter 25 collection and Calvin Klein collections Fall Winter 25 collection for womenswear and menswear. We also launched exclusive womenswear styles from Moncler's Fall Winter 25 collection as well as exclusive styles from God's True Cashmere and Zegna's Fall Winter 25 collection. In addition to creating desirability for our top customers with exclusive digital campaigns and product launches, we also create the viability and the sense of community for My Theresa's top customers through unique Money-can-buy physical experiences. In the first quarter we hosted various top customer events including a private Diamond Masterclass and a tailored styling session with Jessica McCormick at her Mayfair Townhouse in London. Together with Givenchy, we celebrated Sarah Birdie's debut Runway collection with a curated cocktail reception, a private exhibition tour and an intimate dinner in Shanghai. We hosted a top customer cocktail in Madrid at the Rosewood Hotel and also held an exclusive Schiaparelli style suite there to celebrate London, Milan and Paris Fashion Weeks. We invited top customers to various shows to experience the magic of one way firsthand. Furthermore, we hosted Style Suite in London, the Hamptons, New Jersey, Singapore, Hong Kong, Warsaw, Frankfurt and Zurich presenting new collections in immersive curated environments. Highlights in the United States included intimate dinners with Michelin starred chefs in Aspen and Los Angeles. We hosted a New York Fashion Week after party at the legendary in the Chine with Calvin Klein collections. We partnered with Loewe for an exclusive event at the Glass House in Connecticut showcasing the brand's exclusive collection inspired by Joseph and Anni Albert, followed by an intimate dinner by chefs Riyad Nazar and Lee Hansen of Frenchte. Furthermore, we hosted an exclusive two day experience with Zenya in Turin featuring an on stage dinner with a private opera performance at Teatro Reggio and next day a lunch at the famous Restaurante del Cambio. In summary, we are extremely pleased with the Mitraza business in the first quarter of fiscal year 26 and Martin will later show how the outstanding top line results translated into very strong bottom line results. Let me now comment on the luxury segment comprised of Mitre Pote and Mr Porter the first quarter of fiscal year 26 we clearly saw the first signs of the commercial turnaround directly resulting from the execution of a strategy that focuses on luxury customers seeking editorial inspiration and brand discovery as well as a strict focus on full price selling. In Q1 fiscal year 26 net sales declined as expected by minus 10.8% versus Q1 fiscal year 25 for net A Porter and Mr Porter combined, United States declined by minus 10.7% in Europe excluding the UK and Germany by minus 3.6%. In terms of net sales in Q1 fiscal year 26 compared to Q1 fiscal year 25, the net sales decline is still driven by too little investments into attractive new merchandise a year ago for the current fall winter season. For the next spring summer season we can already see improved results. While the overall net sales declined for Net a Porter and Mr Porter combined, the average spend in terms of GMV per EIP customer, the so called extremely important people customers grew by plus 4% in Q1 fiscal year 26 versus Q1 fiscal year 25. The average order value last 12 months increased by a remarkable plus 15.5% to €836 for Netanya, Porter and Mr Porter combined in Q1 fiscal year 26. Finally, the gross profit margin improved by 130 basis points in Q1 fiscal year 26 for net A Porter and Mr Porter combined driven by a higher share of full price sales amongst other Factors. All these KPIs indicated an already much healthier business. In the first quarter of fiscal year 26. A renewed focus on high impact campaigns and exclusive product launches was successfully initiated for Nitapotee and Mr Porter with a clear focus on luxury customers looking for editorial inspiration and brand discovery. Dr. Portier launched an exclusive capsule with Jimmy Chou focused on key boot styles for fall winter 25. Natapotier also launched an exclusive colorway of the iconic Clouet Paddington bag which drove outstanding media engagement with audiences as well as an exclusive on trend animal print nearly lotan bag all drove commercial success and increased brand awareness as the destination for fashion discovery. Mr Porter launched a Bottega Veneta for Winter 25 collection with an exclusive free launch for EIP customers. Mr Porter also launched 13 exclusive styles from the Enfant Riches for Winter 25 collection and Meta Porter and Mr Porter both launched Emily on Door as a new brand, each with exclusive Capsule collections. Further new brand launches at Mr. Poulter include Eleventi Aprese Morjas and Satoshi Nakamoto. Netapoti also continued to drive outstanding customer engagements through unique editorial content. In September, the Oscar nominated actress Emily Blunt was the COVID star of Porter magazine, marking the most engaged Porter cover in the last 12 months. September also saw Meta Porter present season 10 of the incredible Woman podcast series celebrated with a private event in London hosted by international model, actress and campaigner Adobe Aboa. Mr Porter's journal feature on Walton Goggins drove 14,500 visits to the journal section whilst its video attracted 390,000 views on Instagram reels. It was featured in media outlets including People Magazine and the Hollywood Report. Partnering with such talent has proven effective in reaching new audiences, enhancing brand visibility and driving traffic to the Mr Porter site. Mr Porter's film with actor Adam Brody modeling key design Items has had 593,000 views Net A Porter created a number of unique experiences for its VIPs including a dinner in London celebrating 25 years of Netta Pote to which top clients who have shopped with the brand for the last 25 years were invited. And to revolt the new Runway collections, Net-a-Porter hosted EIP dinners for its customers in all four fashion week cities, New York, London, Milan and Paris. Mr Porter hosted dinners in both New York and Hong Kong for high profile EIP customers. It also invited to a dinner in London to celebrate its collaboration and exclusive Capsule with Drake. In attendance were press influencers and eip. A share of the proceeds from the Capsule collection were donated to the Mr Porter Charity Health and Mind which runs in partnership with Movemba, which supports men's mental health and Capsule Collection had the highest click through rate from the homepage to product page seen this quarter. Already we can see that the new leadership team at Netaporte and Mr Porter is driving the creation of much healthier and resilient business model to regain financial strength and growth. Martin will later comment on the progress achieved in improving the profitability of the Metaporte and Mr Porter Luxury segments. Lastly, let me comment on Yuke's stand alone performance in Q1 of fiscal year 26. We are pleased with the progress that we have achieved to separate the Yoox business from the luxury of ynab. The sale of the outlet assets will allow us to accelerate the process of separation further to create a lean business model that is compatible with the lower margin and lower average order value off price business. We are focusing the Yoox business on the healthy core in terms of geography and operational fulfillment. The closure of the marketplace business warehouses in Dubai and Hong Kong as well as the optimization for higher tariff rates shipping to United States States causes a deliberate net sales decline in the short term but will allow to return to solid profitability. In Q1 fiscal year 26, net sales declined as expected by -16.5% versus Q1 25. For weeks, Europe including Germany increased by + 1.7% and terms of net sales in Q1 fiscal year 26 compared to Q1 50 year 25. The overall net sales decline is as explained mainly driven by a renewed focus on a healthy core for the YEEX business. While the overall net sales declined in yeecs, the top spending customer average spend in terms of GMV grew by plus 4.7% in Q1 fiscal year 26 versus Q1 fiscal year 24. The average order value last 12 months increased by a remarkable plus 17.8% to €256 per yukes in Q1 50 or 26. Finally, the gross profit margin improved by 400 basis points in Q1 fiscal year 26 for yuke's compared to the prior year period, driven mostly by last year's EX and also a higher share of past price sales. All these KPIs indicate a clear focus on the healthy part of the customer base. As part of the transfer of the outlet assets to the A group, Lux Experience will for a certain period after closing provide certain operational IT services, all priced at cost level to the buyer. Latest by the end of calendar year 26, all services and activities in relationship to the outlet will have stopped for Lux Experience, significantly reducing the complexity in the group. And now, after having reviewed the good commercial results and improvements across all businesses, I hand over to Martin to discuss the financial results in detail.

Thank you Michael. As Michael outlined, we were able to successfully find a new home for the Outnet. Just to highlight the financial implications, the Outnet assets will be transferred at closing with an expected cash consideration at 30 million US dollar depending on inventory levels at closing. Closing of the transaction is expected in the first quarter of calendar year 26 in line with IFRS requirements. We will report the outlet already in this Q1 of fiscal 26 as discontinued operations as it is no longer considered part of our core financial performance. The off price business is now fully focused on eucs and we adjusted our reporting accordingly. Therefore, with our fiscal Q1 reporting running from July to September 25, we will report quarterly results along our three business segments, Luxury My Teresa Luxury Net-a-Porter and Mr Porter and Off Price Business of UX and highlight specific developments that influenced each segment's performance. Following that, I will review the consolidated financial results for Lux Experience at Group level and give an update on guidance now excluding the outlet. Unless otherwise stated, all numbers refer to Euro let's first review the performance of our MYVISA business. During the first quarter of fiscal year 26, GMV grew by 13.5% to 245.9 million compared to the prior year period. Net sales also grew double digit to 226.3 million representing a plus 12.2% increase. We continue to take share in an overall soft market. In Q1 of fiscal year 26, Mitresa's gross profit margin increased by 70 basis points to 44.6% as compared to 43.9% in the prior year period. Main driver was our continuous effort to increase the full price share. In Q1 of fiscal year 26, the shipping and payment cost ratio increased by 110 basis points to 14.6% as compared to 13.5% in the prior year quarter. The increase is mainly due to the new US Tariff situation as we pay all duties for our US Customers. The cost increase for us is reflected in our shipping and payment cost ratio. If you excluded the duties cost, the shipping and payment cost ratio in relation to GMV decreased by 90 basis points from 8.8% to 7.9% in Q1 fiscal year 26. Main drivers of this improved cost ratio were higher AOVs and lower negotiated shipping fees based on increasing group volumes. With these measures, we limited the effect of increased US customs duties in the quarter to 110 basis points increase in our shipping and payment cost ratio and mostly compensated to the increase with the above mentioned 70 basis points increase in our gross profit margin. The net effect of U.S. customs and the combined view of the increased shipping and payment cost ratio and the increasing gross profit margin was therefore mostly compensated and overall not significant. In Q1 the fiscal year 26, the marketing cost ratio decreased by 110 basis points to 10.4%. We are successfully capturing market share but are mindful of the overall soft market situation as targeted, we will increase marketing spend throughout the remaining fiscal year if deemed effective. Also, the selling General Administrative SGA cost ratio decreased by 110 basis points to 12.9% compared to the prior year quarter. SGA expenses increased by 4.7% compared to the previous year quarter and the cost ratio benefited from the strong top line increase. Subsequently, the adjusted EBITDA margin expanded by 210 basis points during the quarter to 3.5% as compared to the 1.4% in the prior year period. Adjusted EBITDA grew by 5 million to 7.9 million in Q1 of fiscal year 26. Q1 profitability in the previous year was very low and given the cost developments just mentioned, we expect profitability levels at Mytheresa in the remaining quarters in this fiscal year 26 transition year to be at previous year profitability levels. Inventory levels at mitresa are up 4% compared to previous year despite double digit growth. Let me now comment on the Luxury Net a parter and Mr Porter segment in more detail. In the first quarter of our fiscal year 26, GMV and net sales decreased by minus 10.8% to 224.5 million and 212.3 million respectively. The anticipated top line decrease was fully in line with our expectations and due to lower merchandise order volumes from previous year. The new leadership is working on adjusting upcoming season's buying volumes and aligning subsequent marketing strategy to re embark on top line growth again. We expect to see first signs on GMV growth in the second half of this fiscal year. The gross Profit margin in Q1 increased by 130 basis points from 46.5% to 47.8% with the increase influenced by higher share of full price sales and one time effects in the previous year. More focus of our transformation plan is to bring down the SGA cost ratio. SGA expenses in Q1 of fiscal year 26 decreased by minus 4.2 million or minus 6.8% compared to the last quarter which was Q4 of fiscal year 25 running from April to June 21. Compared to the first quarter of previous year, SGA expenses decreased by minus 6.6 million or minus 9.7% if you included it development costs that were capitalized last year. As this is the first quarter of fiscal year 26, we will see more significant effects throughout fiscal year 26 and fiscal year 27 with the top line decrease of minus 10.8% in GMV in the quarter, the SGA cost ratio increased marginally by 30 basis points compared to the previous year quarter including capitalized IT development costs in the previous year quarter. Overall, the SGA cost ratio in the quarter is at 27.6% of GMV compared to 12.9% at Mitresa. We will continue to bring down this more than 1000 basis points difference with adjusting the operating model, the IT replatforming corporate overhead cost savings and re embarking on top line growth. Given the top line decrease of -10.8% GMV in the quarter, 9.3 million less gross profit was generated with the other cost lines. In line with our expectations, the adjusted EBITDA margin in the quarter was at a negative minus 6.9% below the adjusted EBITDA level. At Mahitrisa. The new leadership teams at Net-a-Porter and Mr Porter are in the middle of refining and investing in our buying and marketing efforts to set metaporte and Mr Porter on a growth trajectory again while focusing on profitability. With the execution of our transformation plan and bringing down the SGA cost ratio, we expect the NAP Mr. P segment to achieve comparable profitability levels to the Mitresa segment with a targeted adjusted EBITDA margin of 7 to 9%. Medium term we expect NAP and Mr. P to break even on adjusted EBITDA margin level already in fiscal year 27. Inventory levels at Net-a-Porter and Mr Porter are down minus 8.8% to previous year with a healthy all season share at targeted levels and in line with the situation at Nitrisa. Let me now review the financial performance of the off price business of Yoox, continuing the path of a more comprehensive restructuring effort at UX and with focus on profitable customer cohorts. GMBN net sales in Q1 of fiscal year 26 declined by 19.3% and 16.5% respectively to 118.6 million GMB and net sales in the quarter, also driven by the deliberate shutdown of the unprofitable Yuke's marketplace which had a GMB of 4.6 million in Q1 fiscal year 25, Nuke's gross profit margin increased by 400 basis points from 32.6% in the prior year period to 36.5% mostly driven by previous year destocking initiatives. Core focus of our transformation plan is to bring down the SGA cost ratio also at Yux. At Yuke's SGA expenses in Q1 of fiscal year 26 decreased by minus 6.2 million or minus 15.5% versus Q1 of previous year. If you included all the IT development costs in previous year on a standalone basis with the carve out of the outnet from off price and reporting IT as a discontinued operations, we excluded all P L effects that were directly attributed to the outlet and will fall away subsequently. Certain cost elements in corporate and tech will not fall away with the sale of the outlet and therefore increase the cost share for Yukes and the group with reporting the outlet as the discontinued operations. 3.6 million SGA expenses from the Outnet were allocated to Yuke's already in this quarter. The Outnet had net sales of 41 million in Q1 of fiscal year 26. At Eux, the SGA cost ratio was at 28.6% of GMV. We will continue to bring down the SGA cost ratio with significantly simplifying the operating model subsequent IT downsizing, corporate overhead, cost savings and re embarking on top line growth. During the first quarter of fiscal year 26, the adjusted EBITDA margin was at minus 18.1% in line with expectations in our transformation plan. With the execution of our defined transformation measures, we expect to return to adjusted EBITDA profitability of Yoox in 15 to 21 months and return to top line growth already in fiscal year 27. Inventory levels at Yuke's are minus 13% to previous year in line with our targeted inventory strategy at Yukes. Now that we have reviewed the performance of our individual segments, take a look at how these results translate into our group level financials for lux experience. In Q1 fiscal year 26, group GMV amounted to 588.9 million while group net sales were at 557.2 million. GMV and net sales declined by minus 4.3% and minus 4.2% respectively as compared to illustrative levels. In Q1 fiscal year 25 excluding the outnet, adjusted EBITDA on group level stood at minus 28.1 million with an adjusted EBITDA margin of minus 5%. Top and bottom line of the Lux Experience group are at expected levels for Q1 of fiscal year 26 excluding the outlet. At the end of Q1 fiscal year 26 and excluding the inventory of the outlet, group inventory stood at 1,018,000,000. Operating cash flow of the Lux Experience school was at minus 146.4 million driven by phasing seasonal and one time effects. Excluding the one time effects, we had around minus 40 million. Negative operating cash flow one time effects relate to restructuring expenses, phasing of accounts payables and custom drawback receivables. Negative cash flow in the first quarter is typical due to seasonal inventory buildup. For the full fiscal year 26, we expect operating cash burn to stay well below 200 million given fiscal year 26 as the key transition year for our Transformation Plan. We are executing our Transformation Plan on a fully funded basis with total cash outflow during all years of the Transformation Plan to range between 350 and 450 million. We expect to break even on an operating cash level in two to two and a half years. The group ended the fiscal year with a cash position of around 460 million and additional access to revolving credit facilities of 200 million of which 42.2 million were utilized. End of Q1 fiscal year 26 Lux Experience has a strong balance sheet with 1.7 billion of current assets, mostly inventories and cash, almost no bank debt and an equity ratio of 60%. The integration of the YNAP Finance teams and formation of all lexisperience Group structures have started early and are progressing very well. Key activities included a new Group wide organization and governance setup, an integrated finance consolidation and IFRS 16 tool, new segment reporting, unified accounting and reporting policies with transparent cost center structures to enable accountability and cost savings, and a highly efficient and effective finance Group team setup. The statutory and group audits for fiscal year 25 under strict PCAOB guidelines were successful and we filed our 20Fs plan on October 30, 2025. We are in an ideal position to execute our Transformation Plan to deliver sustainable growth and profitability supported by our strategic initiatives across our segments. With our continued success at my Teresa, we have proven that we are the best execution team and global digital luxury. The new leadership teams at Net-a-Porter, Mr Porter and UX have begun their work and at group level we are in the midst of implementing the measures of our Transformation Plan. Given our agreement to sell the assets powering the outlet, we would like to provide an updated guidance for fiscal year 26 that reflects the new structure of our Lux Experience Group. The new guidance takes into consideration the anticipated financial impact of the transaction and reconfirms our guidance for the other business and seconds. We remain committed on the full execution of the Transformation Plan which includes operational adjustments, technology, platform integration and organizational alignment. As communicated, fiscal year 26 will be our key transition year. For fiscal year 26 we expect Lux Experience GmbH at around 2.4 to 2.7 billion and an adjusted EBITDA margin between minus 2 and plus 1%. We expect Mitresa to grow mid to high single digits in the full fiscal year. Natapote Mr Porter will show growth in the second half of the fiscal year but a decline by low single digits for the full fiscal year. Nukes will continue to adjust the revenue base downwards, but at a lower extent. In the second half of the fiscal year, our medium term targets remain unchanged at adjusted ebitda profitability at 7 to 9% and to return to 10 to 15% annual growth rates. And with this, I hand over to Michael for his concluding remarks.

Thank you, Martin. We are very pleased with our first quarter of fiscal year 26 earnings results. The outstanding performance of Mitareza demonstrates our proven ability to drive profitable growth in digital luxury. And the clear signs of the commercial turnaround at Net-a-Porter and Mr Porter show that we are fully on track with with our transformation plan. With the agreement to sell the assets at the Outnet, we have also found a tailored solution that allows us to accelerate the transformation. At ux, Lux Experience is in the perfect position to benefit from the continued growth of digital luxury and the ongoing consolidation in the sector. We expect to become the one and only destination for luxury enthusiasts worldwide. We will continue to generate enormous value for our customers, brand partners and shareholders. And with that, I ask the operator to open the line for your questions.

Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow up. If you would like to ask a question, please raise your hand. Now, if you have dialed in to today's call, please press Star9 to raise your hand and Star6 to unmute. Please stand by while we compile the Q and A roster. Your first question comes from the line of Blake Anderson with Jeffries. Your line is open. Please go ahead.

Hi guys. Thanks for taking my question. So wanted to ask on the. On the acquisition. Looks like it's been almost seven months now since you closed it. There are lots of moving pieces. I wanted to ask what are the strongest signs that you think your plan is working so far and that it's on track and what would be any areas, if any, that have surprised you?

Thank you, Blake. Indeed. We closed in April, so a few months into the overall work we are well on track as explained in our call. If you look at some of the quality KPIs of margin of AOV of spend per top customer, we are well on track. And for the luxury net. A Porter, Mr. Porter. We believe and expect positive growth already next year in 26 calendar. So really good developments. We are really happy that we were able to bring a new leadership team so quickly at Net-a-Porter, at Mr. Porter and also at YOOX. The signed agreement to sell the assets of the Outnet was a significant milestone. We have announced workforce reductions in multiple locations. So it's all well on track. And Martin explained that we already see the results of very early SGA reductions. I mean a lot of the activities that we are doing have of course lags before they can really take effect in the P and L. So we are very happy. We are not surprised. We knew what was not working. We knew what was working because we did a very extensive due diligence and are of course in a quite unique position of truly understanding the business model of Net-a-Porter and Mr. Porter and also very close to the off season luxury business. So it looks very very good. We explained in May that this is a multi year exercise with continuous improvement. This is not front loaded, back end loaded. We will continue to show quarter by quarter improvements. And this was only the first quarter.

Makes sense. Still very early. So wanted to ask on the guidance. It sounds like there weren't really any changes there aside from the Outnet sale. Just wanted to confirm that and then see if there were any was any color you could provide on a quarterly basis kind of by by segment there. And I think you said the My Teresa segment was maybe mid to high single digit GMV growth which would I think would imply a slowdown. So any more color on that segment as well which has been really strong for you.

No, you're completely right Blake. So there's a reconfirm reconfirmation of. The. Perspective and the guidance. For the two. Segments my Teresa and Net-a-Porter Mr. Porter. And it is obviously an adjustment needed if you. If you take out the Outnet and and reported as discontinued operations I.e. around 212 million of net sales for for the full year that we that we expected and therefore we had to adjust that. You see that also we narrowed the range on top and bottom line. I mean we had on bottom line minus 4% to to plus 1% and now we narrowed it down. So I think we are as a key success factor is to really start early and really push the transformation plan. We are well on track to see the good movements. So yeah reconfirmation of the guidance adjusting it for the outlet effect on the Mytheresa guidance. You know mid to high single digits. I mean there's no specific call out. I mean as as we are seeing very strong support and great signs of of growth throughout both both luxury segments. But obviously we want to be mindful in the overall situation of the market. I mean it is always tough to to predict and therefore it is a. You know this is in line with what we expect today. In line with an overall Soft market.

Got it. Thanks so much. I'll hop back in the queue.

Your next question comes from the line of Oliver Chen with Didi Cohen. Your line is open. Please go ahead. You may need to press Star six to unmute. Hey, Oliver. You still seem to be on mute. There appears to be no audio from Oliver Chen's line. We will move to the next question. Next question is from Cedric Norris with Morgan Stanley. Your line is open. Please go ahead.

Hi, Michael and Martin. Thank you very much for taking my questions. So I have two, if that's okay. First, there is this idea that fashion trends follow a pendulum swinging from maximalism and colorful style to more quiet luxury ones. The latest being more in favor of. Over the recent past, we recently saw waves of fashion designers change during their debut in some of the largest luxury houses. So having in mind that fashion trends are hard to predict, could you perhaps elaborate on what you have seen in terms of consumer appetite for bolder looks and the overall interest for the luxury category? Have these recent creative directors changes generated more interest? And if yes, for which brands? And then secondly, if you could share what you saw in terms of performance by category, that would be helpful. Thank you.

Happy to do so, Cedric. So you're absolutely right. We have come out of a fashion Week cycle with lots of new designers and at a very high level because each brand has its own story. There was a bit of movement to more bolder, more colorful, more feminine, more femininity across many, many brands. We clearly see more buzz. We clearly see more interest. Most of these collections have not dropped it. So this is really February, March, April, where we will see how the appetite for consumers are by different maisons. But we clearly have seen a sort of joined idea of many creative directors to move, to move into a new swing, move out of quiet luxury. But I always insist that the drivers of quiet luxury brands like Zegna, Bunello, Cuccinelli, Ermenegildo Zegna, they will continue to be successful, successful. This is an additional side of fashion that hopefully will excite customers as we move into February, March, April, when a lot of these shows and collections will become available. In terms of what is driving the growth, this is of course very much the story of Mytheresa, the story of Net-a-Porter and Mr. Porter. It's clothing, it's ready to wear. This is where we see the nicest momentum. This is driven by a very diverse lifestyle of our clients. Vacation remains a big theme, but both summer and winter. And then there's one additional category that we always call out, which is the success of fine jewelry now also on digital, it's probably one of the later categories that have moved and we see good traction both on Net-a-Porter and on my Teresa for fine jewelry in the neighborhood of 20 50k pieces. So we are gradually moving up into very nice price points. Of course, not odd jewelry, but real luxury products.

Thank you.

A kind reminder. If you would like to ask a question, please use the raise hand feature at the bottom of your screen. If you have dialed into today's call, please press Star9 to raise your hand and Star6 to unmute. Your next question comes from the line of Oliver Chen from TD Cohen. Mr. Chen, please press star six to unmute. Star six to unmute.

Hi Michael. Hi Martin. Hopefully you can hear me now.

It works now.

Perfect. Thank you. Hi, this is Nicholas Sylvia on for Oliver Chen. Thank you both for taking the time. I do believe some of my questions were answered already but I did want to ask a little bit more on guidance. I know you mentioned that EBITDA margin sounds like was adjusted a tiny bit on the lower end if I'm not mistaken. I was just wondering if you could provide any additional color on what you think the primary drivers are there if there are any besides the sale of Outnet. And my second question is if you could just speak a little bit more on what you are seeing regionally. Thank you.

Maybe I'll take the first question on the guidance. We adjusted it upwards so we had my adjusted EBITDA margin for the group minus 4% to plus 1% previously and therefore now guide towards minus 2 plus 1%. So if you take the midpoints it's it's an improvement. Obviously the the as Michael outlined it is the transformation plan that we are embarking on from a group level and in addition the work of the new leadership teams at the brands we are all working on improving the profitability from the business side, from the back end side and also then focusing on re embarking on growth. But for us and we outlined that in multiple last calls the SGA cost ratio is really the key element of improving the profitability and it is quite noteworthy that already in Q1 so July, August, September, just a couple of months after after closing we were able to decrease SGA Costs by by - 15 million if you combine the 2x YNAP segments of the quarter compare in comparison to the prior year quarter. So we are obviously front loading a lot of a lot of pain, a lot of adjustments that we that we need to do and we will continue to do so. So this is the core element. And I also you know guided on growth especially Netapulte Mr. Porter already in the second half of this fiscal year to show growth. And this will obviously also help and help on the on a ratio logic that from a lower expense base to then have obviously profitability improvement on the whole group re embarking on the growth trajectory again. And it always helps to be the number one worldwide to really push also. On the growth side.

Yeah. And let me talk about geography. We continue to see very good traction in the US we highlighted in our script that it is actually the fastest at accelerating geography. Europe excluding Germany, very stable growth rates. So we are across all the segments happy with that. These two geographies on the UK side as we said, we are really focusing on the healthy core which is Europe. So we intentionally drive business in Europe. Asia has stabilized obviously at a low level. So we are really looking forward to continued growth in the short term in the US And Europe. There may be upside opportunity now in China, but probably still early to say. And I just want to highlight that as a group 31% of our business is now in the United States. So we feel very good about our US Business and our scale in the US now.

Appears to be. No further questions at this time. This does conclude today's call. Thank you for attending. You may now disconnect.