Emles Luxury Goods ETF (LUXE) Q2 2026 Earnings Report, Transcript and Summary

Greetings, and welcome to the LuxExperience Second Quarter of Fiscal Year 2026 Earnings Conference Call. [Operator Instructions] Today's call is being recorded, and we have allocated 1 hour for prepared remarks and Q&A. It is now my pleasure to introduce your host, Martin Beer, the Chief Financial Officer of LuxExperience. Thank you, sir. Please begin.

Thank you, operator, and welcome, everyone, to the LuxExperience Investor Conference Call for the second 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 at 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 second quarter of fiscal year 2026 of LuxExperience. We are extremely pleased with the results of the second quarter. The initiated turnaround of ex YNAP already shows good results with strong improvements across all 3 business segments. Growth and profitability at group level in the second quarter of this fiscal year confirm that we are fully on track with our transformation plan, targeting medium-term group net sales of EUR 4 billion with an adjusted EBITDA margin of 7% to 9%. The Mytheresa business continues to outpace the industry, delivering double-digit growth and high profitability. NET-A-PORTER and MR PORTER already show sequential improvements as a direct result of the execution of the new strategic focus on customer full price selling and cost discipline. At YOOX, our strategy of focusing on the healthy core of the business with the new management is also generating clear improvements in the results. We continue to see seismic shifts in our sector as more and more of our competitors are not able to deliver profitable growth. LuxExperience is now the clear digital multi-brand leader for luxury enthusiasts on a global level. Over the past decade, Mytheresa has consistently built and grown trusted relationships with its brand partners and customers. These relationships are the foundation of our success. Sustainable and profitable growth in luxury comes from providing brands and customers with the very best in service and experience. As a group, we know how to engage with true luxury customers through desirability, emotion and community. These principles remain at the core of everything we do. Together with NET-A-PORTER, MR PORTER and YOOX, we will seize the tremendous opportunities that present to us going forward as LuxExperience repossess the secret sauce in digital luxury. Let me now start by commenting on the Mytheresa business. We are again extremely pleased with the outstanding results in the second quarter of fiscal year 2026. Mytheresa's clear focus on wardrobe building big spending luxury customers and their needs through inspiration by curation, highest quality service and continuous building with physical events has again strongly paid off. In Q2 of fiscal year 2026, we grew our net sales by plus 8.8% compared to Q2 of fiscal year 2025. In the United States, which is a key market for growth, net sales reached plus 22.9% in Q2 fiscal year '26 compared to Q2 fiscal year '25. In the second quarter, the U.S. accounted for 23.3% of net sales of our total business. In Europe, excluding Germany and the U.K., we saw a net sales growth of plus 7.3% in Q2 fiscal year '26. Mytheresa's financial strength and exceptional growth are fundamentally driven by its outstanding customer base. In the second quarter of fiscal year 2026, the top customer base of Mytheresa grew by plus 13.5% compared to the prior year period. Furthermore, the average spend per top customer in terms of GMV grew by a very strong plus 12.5% in Q2 fiscal year '26 versus Q2 fiscal year '25. The average order value for last 12 months for Mytheresa increased by a remarkable plus 12% to an outstanding EUR 824 in Q2 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 140 basis points in Q2 fiscal year '26. Lastly, Mytheresa's customer satisfaction, which we measure by our internal Net Promoter Score, NPS, hit a high note, reaching 83.7% in Q2 fiscal year '26, up from 78.3% in Q1 fiscal year '26, showcasing the continued excellence in customer service despite high volumes during the holiday period. Our success with big spending wardrobe building customers makes Mytheresa a highly desired partner for luxury brands. In the second 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 collections like the Dolce & Gabbana, holiday collection for womenswear and kids wear only available at Mytheresa as well as exclusive holiday capsule collections for womenswear from Christian Louboutin, Roger Vivier and Etro only available at Mytheresa. We were the exclusive prelaunch partner for the Studio Nicholson and Aaron Levine's collection for menswear. We also launched exclusive styles for Loewe's and Bottega Veneta pre-Spring '26 collections and exclusive runway looks from Moncler Grenoble fall/winter '25 collections for womenswear and menswear. Please see our investor presentation for more details on these capsules and exclusives. In addition to creating desirability for our top customer with exclusive digital campaigns and product launches, we also create desirability and a sense of community for Mytheresa's top customers through unique money-can't-buy physical experiences. In the second quarter, we invited top customers to a special curated experience with Bottega Veneta at Teatro La Fenice in Venice that included the reopening of the historic theater enjoying Mozart's La Clemenza di Tito as well as an intimate gala dinner within the theater itself. We hosted an exclusive private gathering in Riyadh, unveiling Mytheresa's latest curated luxury collections, including exclusive skinwear styles. We also hosted style suites in Warsaw, Frankfurt, Zurich, Hong Kong, New York and Los Angeles, presenting new collections in immersive curated environments. A highlight in the United States was a style suite in partnership with Schiaparelli for 2 days in Miami to present the Drop 2 collection. Together with Roger Vivier, we welcomed our guests in the newly opened Maison Vivier in Paris, offering a special guided archive tour followed by an intimate dinner hosted by Creative Director, Gherardo Felloni. We also partnered with Tom Ford to host our guests at Claridges in London for an exclusive dinner honoring the Creative Director, Haider Ackermann. Noteworthy was also our 2-day mountain experience with Moncler Grenoble in Gstaad, featuring an afternoon tea aboard the iconic La Bella Pop Epoque train and intimate dinner and snow activities with lunch on the Eggli Mountain the following day. In the United States, we also hosted an intimate dinner with Dolce & Gabbana at Casa Cipriani to celebrate the exclusive holiday capsule in attendance of Domenico Dolce. In the spirit of being a community for luxury enthusiasts, Mytheresa has intensified its outreach to high-end luxury customers with 3 immersive shopping experiences in Asia, the United States and Europe. In Jilin City, we invited guests for Mytheresa's first-ever winter experience in China. combining Alpine Sport, Apres-ski culture and a Mytheresa Apres-ski pop-up bar. In New York, Mytheresa partnered with Hani's Bakery for an immersive holiday gift shop experience on Madison Avenue, inviting guests to step into a world where the nostalgia of festive suites met the sophistication of high fashion. Finally, in Saint-Maurice, Switzerland, Mytheresa opened an immersive hotel-inspired space, offering guests a captivating experience for 4 months, envisioned as a private club. The setting brings Mytheresa's world to life through trunk shows, presentations and workshops. Please see our investor presentation for more details on these unique money-can't-buy experiences. In summary, we are extremely pleased that Mytheresa for the third quarter in a row delivered above-market growth, 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 NET-A-PORTER and MR PORTER. In the second quarter of fiscal year '26, we saw continued improvements as a direct result of the execution of the new strategic focus on the luxury customer seeking editorial inspiration and brand discovery as well as a strict focus on full price selling. This clear focus on customer and, of course, cost discipline already starts to bear fruits. In Q2 fiscal year '26, net sales declined by 1% versus Q2 fiscal year '25, demonstrating a clear improvement compared to the net sales decline in Q1 fiscal year '26 of minus 10.8% for NET-A-PORTER and MR PORTER combined. Europe, excluding Germany, increased by plus 14.4% in terms of net sales in Q2 fiscal year '26 compared to the prior year period. The overall small net sales decline is still driven by 2 little investments into attractive new merchandise a year ago by the previous leadership as well as still needed improvements in the global shipping network and stock allocation, but we can already see improved results for the new upcoming spring/summer '26 season. Beyond the overall net sales stabilization for NET-A-PORTER and MR PORTER combined, the average spend in terms of GMV per EIP, the so-called extremely important people, grew by plus 3.6% in Q2 fiscal year '26 versus Q2 fiscal year '25. The average order value last 12 months increased by an outstanding plus 13.6% to EUR 861 for NET-A-PORTER and MR PORTER combined. The customer satisfaction at NET-A-PORTER measured by our internal NPS reached 65.3% in Q2 fiscal year '26, increasing by plus 1,200 basis points compared to Q2 fiscal year '25. All these KPIs point to a significantly improved health and quality of the business of NET-A-PORTER and MR PORTER. In the second quarter of fiscal year '26, NET-A-PORTER started to show high-impact digital campaigns and exclusive product launches that underlined the fashion authority and positioning of both brands. NET-A-PORTER partnered with Manolo Blahnik for an exclusive capsule inspired by and to coincide with the Marie Antoinette style exhibition at the V&A Museum in London. Guests were invited to a private view of the exhibition after hours hosted by Christina Blaney herself. To coincide with the global release of the Netflix documentary, NET-A-PORTER launched an exclusive capsule with Victoria Beckham. NET-A-PORTER also launched an exclusive party capsule with fashion brand, Rabanne, amplified with a star-studded event at the Scotch London, Le Club Rabanne for the night as well as PORTER cover featuring Rabanne designer, Julien Dossena and Victoria Fawole. This fashion moment launched the party season and made it on to the cover of WWD. NET-A-PORTER also unveiled an exclusive capsule with the role of seasonal items only available at NET-A-PORTER. Also 2 private seasonal digital pop-up shops were featured with Jura, Jessica McCormack and the House of Schiaparelli, confirming NET-A-PORTER as the destination for fashion discovery and unparalleled access for its customers. Editorial excellence continued with Serena Williams as December cover star of Porter Magazine, marking one of the most viewed covers of 2025. NET-A-PORTER also relaunched its same-day delivery service in London and New York, promising customers to shop today and wear it tonight. The relaunch, including new training and uniforms, is a core element of NET-A-PORTER's improved service commitment and was celebrated with a multichannel holiday and gifting campaign. Also, MR PORTER started to show high-impact digital campaigns and exclusive product launches. MR PORTER launched Michael Rider's debut collection for Celine as their exclusive online wholesale partner. The Solomeo exhibition and exclusive 40-piece capsule collection with Brunello Cucinelli also launched on MR PORTER. Further exclusive product launches included Gallery department, the Elder Statesman and Moncler. MR PORTER also created a number of unique experiences for its EIPs, including an intimate dinner to bring together New York's core menswear industry at new hotspot Wild Cherry, driving an earned reach of 6 million views across Instagram from invited guests. Brand Director, Jerry Langmead and the actor, Billie Piper hosted a joint party upstairs at the Langan's, London. The event was strategically timed to create buzz during the busiest holiday season and female-focused talent drove awareness as female customers account for 34% of MR PORTER's customers during gifting season. The dedicated event, Carousel on MR PORTER's Instagram was the fourth most viewed post of all time with over 1.5 million views and 74% new follower engagement. As part of the editorial focus of MR PORTER, brand-new video franchises were launched, including Ways to Wear, Behind the Brand and 3 gifting video campaigns. MR PORTER also launched its winter campaigns, including Weekend the Way, the Great Outdoors and partywear. MR PORTER's Journal feature on musician and writer Josh Homme drove 20,000 visits in its first week, whilst the video drove 1.6 million views on Instagram, making it the second most read talent story and viewed Instagram post in 2025. Please see our investor presentation for more details on NET-A-PORTER's and MR PORTER's unique editorial content and campaigns. To sum it up, the second quarter has seen further sequential improvements at NET-A-PORTER and MR PORTER demonstrating that we are making very good progress in the turnaround of both businesses under the new leadership team. Martin will later provide more details on the progress achieved in bringing the NET-A-PORTER and MR PORTER luxury segment back to profitability in the near future. Lastly, let me comment on YOOX' performance in the second quarter of fiscal year '26. We are pleased with the progress of the ongoing separation of the YOOX business from the luxury segment. The YOOX management has made very good progress to focus on its healthy core and operational fulfillment models that are profitable, creating a lean business model specifically tailored to the lower margin and lower AOV nature of the off-price business of YOOX. In Q2 fiscal year '26, net sales declined by minus 7.3% versus Q2 fiscal year '25 for YOOX, a clear improvement compared to the net sales decline in Q1 fiscal year '26 with minus 16.6%. In Europe, including Germany, a clear geographic focus going forward, net sales already increased by plus 13.9% compared to Q2 fiscal year '25. The overall net sales decline is mainly driven by a renewed focus on a healthy core for the YOOX business and the deprioritization of overseas markets with high cost to serve. While the overall net sales declined for YOOX, the top spending customer average spend in terms of GMV grew by plus 4.1% in Q2 fiscal year '26 versus Q2 fiscal year '25. The average order value last 12 months continued to increase by a remarkable plus 11.4% to EUR 255 in Q2 fiscal year '26. YOOX customer satisfaction measured by our internal NPS reached 50.2% in Q2 fiscal year '26, significantly up from 34.5% in Q1 fiscal year '26 and compared to 29.9% in Q2 fiscal year '25, showcasing significant improvements of customer service operations. All the above KPIs clearly indicate good first results of the focus on the healthy core of the YOOX business. In the second quarter of fiscal year 2026, YOOX started to also deliver on its brand promise, empowering customers not only to own the pieces they desire but to unlock valuable community moments. For the first time in many years, YOOX created an intimate holiday fashion dinner at Milan's iconic Nilufar Depot, in line with its holiday campaign theme. The event was designed to connect leading fashion media and key opinion leaders through culture and design embedded in the YOOX brand vision. YOOX also kicked off a community building event in Berlin through a Fashion Meets Art event hosted at the surprising Nara gallery location. The event brought together fashion insiders, artists and cultural tastemakers from diverse backgrounds, united by a shared passion to art and style. By blending fashion with contemporary art, YOOX created a space for meaningful connections, creative exchange and authentic brand engagement, reinforcing YOOX' role as a cultural connector. Both events boosted engagement through community building, delightful experience and increased the guests' emotional bond with YOOX. Please see our investor presentation for more details on these events. To sum up, the focus on a healthy core for YOOX shows first clear results and the much improved quality and health of the business. And now after having reviewed the good commercial results and strong improvements across all our businesses, I hand over to Martin to discuss the financial results in detail.

Thank you, Michael. As Michael mentioned, we're very pleased with our strong results in Q2 of our fiscal year '26 running from October to December '25. Just 8 months after the acquisition of YNAP, we already report top line growth on group level with net sales growing plus 1.1% reported and plus 5.7% on a constant currency basis. In addition, we are already turning profitable on group level with an adjusted EBITDA margin of plus 2%. All 3 segments improved their performance versus the prior year quarter on top and bottom line. Our cost initiatives are effective with decreasing SG&A cost ratios, and we were able to report strong operational cash flow of plus EUR 118.5 million in the quarter. All these underlines the success of our transformation plan and is fully in line with our expectations. And as a reminder, we are targeting EUR 4 billion in sales and an adjusted EBITDA margin of 7% to 9% medium term. As planned, we expect to close the sale of THE OUTNET in the current quarter, and our off-price business is now fully focused on the YOOX turnaround. The sale of THE OUTNET will not have any effect on our segment and group reporting as it has already been classified as discontinued operations. So let me first review LuxExperience's performance at group level. I will then walk you through the performance of our 3 segments, Luxury Mytheresa, Luxury NET-A-PORTER and MR PORTER and the off-price business of YOOX in more detail and give an update on guidance. Unless otherwise stated, all numbers refer to euro. For Q2 fiscal year '26 and for the first time since the acquisition of YNAP 3 quarters ago, we are already reporting top line growth on group level. On group level, net sales grew plus 1.1% reported and plus 5.7% on a constant currency basis. On GMV, plus 0.2% reported in the quarter and plus 4.7% growth on a constant currency basis. This is a clear acceleration relative to Q4 with minus 5.3% year-over-year and Q1 with minus 4.3% year-over-year GMV decline. In the first 6 months of fiscal year '26, LuxExperience had a GMV of EUR 1,274 million and net sales of EUR 1,202 million. Our SG&A transformation initiatives are clearly visible at group level. Compared to the preceding Q1 of fiscal year '26, the SG&A cost ratio decreased 270 basis points from 21.8% to now 19.1% in Q2 fiscal year '26. For the first time since the acquisition of YNAP, we achieved a positive adjusted EBITDA on group level with an adjusted EBITDA margin at plus 2%. Both the top and bottom line show clear signs of progress in our ongoing transformation and are fully in line with our expectations. Operating cash flow of the LuxExperience Group was a positive EUR 118.5 million, driven by the underlying seasonality in our business. For the first half of fiscal year '26, operating cash burn was only at minus EUR 30 million. In Q3 of fiscal year '26, we expect that the cash effects of our layoff program will be visible. This will come in addition to the seasonality of our business. We, therefore, expect a negative operating cash flow in Q3. For the full fiscal year '26, we expect operating cash burn to stay well below EUR 150 million, given fiscal year '26 as a key transition year for our transformation plan. As a reminder, we're executing our transformation plan on a fully funded basis with total cash outflow during all years of the transformation plan to range between EUR 350 million and EUR 450 million. We expect to break even on an operating cash level in 2 years. The group ended Q2 of fiscal '26 with cash and cash financial investments of in total EUR 543.6 million. Together with our nonutilized revolving credit facilities, our total available funds are at EUR 724.2 million. We are in an ideal situation to operate the fully funded transformation and our growing business model completely debt-free. Given the seasonality in our business, Q2 is typically a strong quarter. The performance in Q2 underlines the success of our transformation plan fully in line with our expectations. We confirm our medium-term targets of EUR 4 billion in net sales and an adjusted EBITDA margin of 7% to 9%. Let's now review the performance of our Mytheresa business. During the second quarter of fiscal year '26, GMV grew by plus 9.9% to EUR 268.9 million compared to the prior year period. On a constant currency basis, GMV grew by plus 12.7% year-over-year. Net sales grew to EUR 242.7 million in the quarter, representing a plus 8.8% increase on a constant currency basis. The net sales growth is at plus 11.6%. We continue to significantly take share in an overall soft market. In Q2, Mytheresa's gross margin increased by 140 basis points to 52.3% as compared to 50.9% in the prior year period. We were able to again significantly increase the gross profit margin while growing top line double digit. Main driver was our continuous effort to increase the full price share. Given the new U.S. tariff situation, in Q2 of the fiscal year, the shipping and payment cost ratio was up 150 basis points compared to Q2 of fiscal year '25, but at similar levels compared to the previous quarter. As we pay all duties for our U.S. customers, the cost increase for us is reflected in our shipping and payment cost ratio. If you excluded the duties costs, the shipping and payment cost ratio decreased by 90 basis points from 8.5% to 7.6% compared to Q2 of fiscal year '25. Main drivers of this improved cost ratio were higher AOVs and lower negotiated shipping fees based on higher group volumes. Same as in the previous quarters, the overall increase in the shipping and payment cost ratio in the P&L is offset by an increase in our gross profit margin. In Q2 of fiscal year '26, the marketing cost ratio decreased by 70 basis points from 12.3% in Q2 of fiscal year '25 to 11.6%. 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. Our executed cost savings measures are visible in the selling, general and administrative, SG&A, cost ratio decreasing by 220 basis points to 11.7% compared to the prior year quarter. SG&A expenses on absolute numbers decreased by minus 7.7% compared to the previous year quarter, and the cost ratio further benefited from the strong top line increase. Subsequently, the adjusted EBITDA margin expanded by 200 basis points during the quarter to 9.3% as compared to 7.3% in the prior year period. Adjusted EBITDA grew by EUR 6.4 million versus the prior year quarter to EUR 22.6 million in Q2 of fiscal year '26. Just as a reminder, due to the seasonality of our business, our fiscal Q2 is always a very strong quarter. For the first 6 months of our fiscal year, the adjusted EBITDA margin significantly improved from 4.5% to 6.5%. We are continuing our effective inventory management with inventory levels at Mytheresa down minus 2.5% compared to previous year despite double-digit top line growth. Let me now comment on the luxury NET-A-PORTER and MR PORTER segment in more detail. In the second quarter of our fiscal year '26, GMV only declined by minus 1.9% to EUR 290.7 million. This was a strong sequential recovery compared to the minus 10.8% GMV decline year-over-year in the preceding Q1 of fiscal year '26. On a constant currency basis, GMV even increased by plus 4.9% in the quarter. Net sales were at EUR 277.1 million, a minus 1% decline year-over-year. Also at net sales level, a strong sequential recovery from the minus 10.8% net sales decline in the preceding Q1. On a constant currency basis, net sales grew plus 6% year-over-year in Q2 of fiscal year '26. The new leadership team is working on improving the current and upcoming seasons buying volumes and aligning the subsequent marketing strategy to reembark on top line growth again. We expect to see continued GMV and net sales growth in the second half of this fiscal year. The gross profit margin in Q2 of fiscal year '26 decreased to 46.1% due to onetime effects in the previous year. Excluding this effect, the underlying operative gross margin was stable compared to the previous year quarter. Core focus of our transformation plan is to bring down the SG&A cost ratio. The SG&A cost ratio in this quarter was at 22.7% of GMV, significantly down from 27.6% in the previous quarter. It was also down compared to Q2 of previous year at 23.8% if you include capitalized IT development costs. With the communicated layoff program now being executed, we will see more significant effects in Q3 and Q4 of this fiscal year. The 22.7% SG&A cost ratio in this quarter compares to the 11.7% at Mytheresa and signals the more than 1,000 basis points opportunity for us to achieve significant cost savings. We will continue to bring down this difference with adjusting the operating model, the IT replatforming, corporate overhead cost savings and reembarking on top line growth. Warehouse closures are executed, and the delivery models are being adjusted. Studio and customer care operations have already been consolidated. The unified data platform is fully protected and the overall IT replatforming is being executed according to plan and without a single delay. The layoff programs in all jurisdictions are now fully concluded with effects visible in Q3 and Q4 of fiscal year '26. In sum, our comprehensive turnaround plan until fiscal year '28 is being executed diligently and fully in line with our expectations. The NAP, MR P segment already almost broke even in the quarter with an adjusted EBITDA margin at minus 0.7%. Therefore, also on bottom line, a significant sequential improvement from the minus 6.9% adjusted EBITDA margin in the preceding Q1 of fiscal year '26. This improvement clearly highlights the impact of our actions so far to strengthen profitability. At the same time, our quarterly performance is subject to the typical seasonality of our business with Q2 and Q4 generally stronger and Q1 and Q3 generally weaker. With the full execution of our transformation plan and bringing down the SG&A cost ratio, we expect the NAP, MR P segment to achieve comparable profitability levels to the Mytheresa segment medium term with a targeted adjusted EBITDA margin of plus 7% to 9% medium term. Inventory levels at NAP, MR P are down minus 3.8% to previous year, and we will continue to enable top line growth at NAP, MR P with adequate working capital and improvements in the global shipping network and stock allocation. Let me now review the financial performance of the off-price business of YOOX. In line with our transformation plan, at YOOX, we are focusing on the healthy core of the business, deprioritizing overseas markets with high cost to serve, discontinuing the unprofitable marketplace model and implementing a lean operating model supported by a simplified off-price tech environment. Also at YOOX, a significant improvement in top line performance, continuing the path of a more comprehensive restructuring effort at YOOX and with focus on profitable customer cohorts, GMV declined minus 12.1% in Q2 year-over-year to EUR 125.3 million compared to minus 19.3% in Q1 year-over-year. On a constant currency basis, GMV only declined minus 9.4% in the quarter. Net sales were also at EUR 125.3 million, a minus 7.5% decline year-over-year. Also at net sales level, strong sequential recovery from the minus 16.6% net sales decline in the preceding Q1. On a constant currency basis, net sales declined only by minus 4.6% in Q2 year-over-year. This significant sequential improvement clearly indicates good first results of the focus on the healthy core of the YOOX business and on European markets and also includes the effect of discontinuing the unprofitable marketplace model. With the focus of YOOX on the European customer and despite increasing U.S. duty rates, the shipping and payment cost ratio stayed mostly stable, only increasing 30 basis points from 14.5% in Q2 of fiscal year '25 to 14.8% in Q2 fiscal year '26. As Michael mentioned, the operational focus of YOOX is on a fulfillment model that is profitable, creating a lean business model, specifically tailored to the lower gross margin and lower AOV nature of the off-price business of YOOX. The core focus of our turnaround plan is to bring down the SG&A cost ratio also at YOOX. The SG&A cost ratio in this quarter was at 26.9% of GMV, down from 29% in the previous quarter. On an absolute level, SG&A expenses in Q2 of fiscal year '26 decreased by EUR 4.6 million or minus 12.1% compared to previous year Q2, if you included all the IT development costs. And this was achieved despite the stranded costs from the separation of THE OUTNET. With the communicated layoff program now being executed, we will also see more significant effects in Q3 and Q4 of this fiscal year. We are significantly consolidating warehouse, studio and customer care operations. The tech legacy cleanup and simplification is going well and with full speed. Corporate costs are trimmed down and aligned to a lean business model. And with a focus on healthy European targeted growth, the SG&A cost ratio will continue to decrease to the targeted levels. During the second quarter of fiscal year '26, the adjusted EBITDA margin improved significantly from minus 18.1% in Q1 of fiscal year '26 to now minus 6% in Q2 of fiscal year '26. With the execution of our defined transformation measures, we expect to return to adjusted EBITDA profitability of YOOX in 12 to 15 months and return to top line growth already in fiscal year '27. Inventory levels at YOOX are minus 8% to previous year. Given our H1 of fiscal year '26 performance fully in line with our expectations and with more visibility in the ongoing full fiscal year, we would like to provide an update on guidance for our full fiscal year expectations. With the implementation of our transformation plan executed in line with our targets, we narrow the ranges of our existing guidance for the full fiscal year '26. For the full fiscal year '26, we now expect GMV and net sales between EUR 2.5 billion to EUR 2.7 billion, previously EUR 2.4 billion to EUR 2.7 billion and an adjusted EBITDA margin of minus 1% to plus 1%, previously minus 2% to plus 1%. With the underlying seasonality in our business, we expect Q3 softer than Q4 with Mytheresa growing high single digit in H2 and full fiscal year '26. For the luxury business of NAP and MR P, we expect positive growth rates towards the end of the fiscal year and therefore, expect in some a low single-digit GMV decline for the full fiscal year '26. For the off-price business of YOOX, we expect top line to further moderate through H2 of fiscal year '26 with overall low teens top line decline. Our medium-term targets remain unchanged with our EUR 4 billion net sales target at an adjusted EBITDA profitability of plus 7% to 9% and to return to 10% to 15% annual growth rates. We will continue our track record of diligently executing our plans and delivering what we target. And with this, I hand over to Michael for his concluding remarks.

Thank you, Martin. We are extremely pleased with our second quarter of fiscal year 2026 earnings results. LuxExperience has delivered strong results and improvements across all 3 segments and is fully on track with its transformation plan targets, confirmed by the strong second quarter. The turnaround at ex YNAP has clearly started while Mytheresa continues to deliver remarkable above-market results. The continued outstanding performance of Mytheresa demonstrates our proven ability to drive profitable growth in digital luxury. The secret sauce is now applied to our new businesses. Overall, LuxExperience is perfectly positioned to benefit from the sustained growth of digital luxury and the ongoing consolidation within the sector, allowing us to capitalize on significant market opportunities. We are fully committed to being a reliable partner operationally, strategically and financially for all our partners. We will continue to generate significant value for our customers, brand partners and shareholders. And with that, I ask the operator to open the line for your questions.

[Operator Instructions] Your first question comes from the line of Oliver Chen with TD Cowen.

Michael and Martin, really nice results all around. On the revenue side, they were better. Which regions or divisions were better than you expected? And how would you contrast how Europe looks relative to the nice momentum you're seeing in Americas? Also on the 140 basis points at Mytheresa, are you expecting full price selling to continue to fuel gross margin expansion going forward there? And what should we know about the base case for the -- what's included in guidance for shipping as well? And would love your take on the main drivers of raising the low end of guidance as well. And finally, on the SG&A cost ratios, you made a lot of progress there. What's been easier versus harder in terms of lower hanging fruit versus longer term as you manage that? And how are you balancing the SG&A strategy relative to continuing to offer great customer-facing service?

Thank you, Oliver. A whole battery of questions. So let me try to cover them and then hand over to Martin for some of the guidance and margin questions. So region, as explained, YOOX focuses on Europe, sees good traction, 14% growth. So Europe is really a good market for the off-price market sector. NET-A-PORTER and Mytheresa, we, of course, have good opportunities in U.S. Mytheresa has seized them, 25% growth in U.S. for Mytheresa in the second quarter in constant currency, even over 30%, so we see strength in U.S., and we believe it will continue, and we see good strength in Europe. Asia is a mixed story, but I also always want to stress the Arabic Peninsula as good opportunities for growth. In terms of full price selling, we have seen now many quarters of increased gross margin, thanks to increasing the share of full price. We still believe also looking at historic numbers that we can continue to increase the full price share until we get back to sort of the normal that we have seen in -- before COVID. So there is still room to improve, and we expect to continue to improve. And on the SG&A, I mean, obviously, there are some structural changes that will take time, particularly technology, but on operations, consolidating warehouses, consolidating customer care centers, consolidating photo studios. We have actually progressed enormously quickly and have already closed warehouses, pooled all photo studios in Nilan. So we're making good progress, but I can assure you we have taken more actions than what is visible in the bottom line still because some of them have time lags. So we are well on track. The whole transformation, the whole turnaround will take until end of '27, but well on track, and that's why we confirm today our medium-term target of 7% to 9%. And maybe for some of the guidance and shipping questions, Martin?

Yes. I'm happy to answer. So I mean, the overall profitability in H2 is expected to be around the same level at Mytheresa as we saw in H1, so the 6.5%. In the previous year, H2, we had 5.2%. So it's exactly as you call out, you have to always have to compare Q1 and Q2, the weaker quarter and a strong quarter, the same logic on Q3 and Q4. On the shipping and payment cost ratio, the duties are all included, and we see a stable trend in Q1 and Q2. So this will continue. And therefore, the improved profitability of the Mytheresa segment to an expected overall around 6.5% adjusted EBITDA margin is driven by the increase in the gross profit, exactly what Michael said, on continuously -- continuing to increase the full price share and therefore, seeing improvements in the gross profit margin.

Okay. And on the revenue side, which one beat relative to expectations? Or what should we know about how revenue trended relative to your guidance this quarter?

I mean the overall revenue guidance is also triggered, I mean, by all 3 segments. So we will -- we saw in H1 at Mytheresa a plus 11.6% GMV growth. And so we guide towards a high single-digit top line revenue guidance for Mytheresa in the second half and therefore, a high single-digit for the full fiscal year, but we see a very strong continuous trend at Mytheresa. So this is really a huge strength at Mytheresa. NAP, MR P and Michael called it out, is driven by now improved buying volumes and aligning marketing and improving the stock allocation. And therefore, we expect in the later part of H2 also top line growth at NET-A-PORTER and MR PORTER and therefore, expect for the full fiscal year a low single-digit decline, but the sequential improvement that we see on top line really shows and now will continue at MR P. And at YOOX, it takes a bit longer with the focus on the healthy core of the customer with a focus on Europe and moving out of the unprofitable marketplace model. Therefore, we see a low-teens decline in net sales for the second half and for the overall fiscal year. So the top line development also mirrors the transformation plan and is fully in line with our expectations.

Your next question comes from the line of Matthew Boss with JPMorgan.

Congrats on a nice quarter. So Michael, with the seismic shift that you cited in the luxury sector, could you speak to how your portfolio is positioned today, maybe offensive initiatives that you've put into place to capitalize on market share globally and new customer acquisition?

I mean, obviously, with its fine-tuned machine, Mytheresa is best positioned to take opportunity -- to take advantage of these opportunities. And as we highlighted in the investor presentation, it's now the second quarter where we grew over 20% in the U.S., at constant currency over 30%. So we are taking market share in the United States. We win customers. We increased our share of wallet with existing customers. But NET-A-PORTER and MR PORTER are absolutely well positioned as well. They are actually even stronger brand awareness and brand appreciation in the U.S. They are not as finely tuned yet. There's still work to be done. But with warehouse operations out of Jersey being able to deliver same day in Greater Manhattan, there's real opportunity also for NET-A-PORTER and MR PORTER. And as we come with fall/winter with a new season buy completely done by our new teams, we will see real good performance by NET-A-PORTER and MR PORTER in the U.S. in Q3, Q4. And it's all about presenting the best selection, presenting the best curation, having the product that customers are looking for. And at a global level, we are positioned as the one partner for brands for full price selling, for a differentiated tone of voice. That's how we see ourselves, and that's what we strive to be.

Great. And then, Martin, as a follow-up...

Your next question comes from the line of Grace Smalley with Morgan Stanley.

Sorry, was Matt cut off or...

Sorry, I didn't hear anything from Matt...

Yes, you had a follow-up question. Maybe you can bring it back and first to Morgan Stanley.

Your next question comes from the line of Grace Smalley with Morgan Stanley.

Hopefully, we can go back to Matt afterwards. Just I was going to ask a question more broadly on the luxury industry, given your insights across all brands. Clearly, we had this period of significant growth for luxury followed by more of a digestion period over the last couple of years, which is sort of -- if you look at the backdrop now, where do you think we are in terms of the general luxury cycle? What are you seeing both in terms of the aspirational consumer versus the high net worth and also in terms of creative cycles and the product newness, would be interested to hear your thoughts.

Thank you, Grace. We believe we look at a very solid calendar year '26. As you can see in our numbers, there's double-digit growth. It's true some of the big names had to go through some transition phase, switching creative directors. But at the same time, as you're very familiar, we have seen fantastic numbers by the likes of Brunello Cucinelli, by the likes of the Loewe, by the likes of Loro Piana. And as we saw real investment into new creativity in the last fashion season in September with a lot of new creative directors, we believe luxury has gone through a transition phase and maybe, as you said, a digestion phase. But we believe there is upside for luxury as a whole in the coming months. I think, as always, there will be some brands and some players that will take more advantage of it than others. It's still in the quality, in the desirability, but we have seen good collections in September, and they're starting to be delivered now in Feb. We already prelaunched new Gucci. We will have launches from Balenciaga, from Saint Laurent, from Versace. So a lot of new impetus. So we believe it will be a good year, of course, all depending on the stability in the macro environment.

Great. And then just a follow-up on that. Are you seeing any changes in terms of the brand's pricing architecture or the different price points that your consumers are gravitating to?

I mean we clearly are in a phase where there's very little price increases. We've gone through a phase of massive price increases, also driven by scarcity and raw materials. There's a bit of a pause there so that I always say it's an equation between price and desirability. And as prices keep standing and hopefully desirability increase, then we will see that result. And then there is movement still early on the contemporary aspirational side. It will be interesting to see in the coming 4 weeks, whether we see also progress. The progress so far we have seen are really in the big houses, I must say.

Your next question comes from the line of Matthew Boss with JPMorgan.

Great. So Martin, for follow-up, I guess, could you elaborate on the progression of EBITDA margins into fiscal '27? Or what I wanted to know is relative to this year's flat base at the midpoint, what's the best way to model the time line for the transformation actions that you're taking across the portfolio as it relates to the bottom line?

Yes. So you're referring to already fiscal year '27. Obviously, we will give guidance then in the summer, in the last quarter, we always give further on the fiscal year. But, clear, I mean, you see the sequential improvement. It is again always nicely laid out by the 3 segments. It's driven by the 3 segments, which are completely, I mean, different in the current state and then all will align towards the medium-term target of EUR 4 billion in net sales and 7% to 9% adjusted EBITDA margin. So we will see a sequential improvement in the second half of fiscal year '26, obviously driven by continued improvement of Mytheresa, NET-A-PORTER, MR PORTER regaining profitability and the ongoing restructuring efforts at YOOX. And obviously, this will then turn into fiscal year '27, where we obviously target along our 5-year plan improvements. And this will obviously not be a linear function towards our medium-term targets of 7% to 9% in fiscal year '29/'30. But we will give you an update. We'll give an update on the fiscal year '27 expectations in our next quarter report here.

Maybe just one follow-up. When you cite medium term, is there any quantification like how long is medium in your view?

It's fiscal year ' 29 and fiscal year '30 is our medium term.

Your next question comes from the line of Anna Glaessgen with B. Riley Securities.

I guess I'd like to start near term, given the disruption at a luxury department store in the U.S. To what extent does guidance embed or do you expect some disruption as there could be some promotions coming from a competitor?

I mean it's hard to predict how the department store sector in the U.S. will unfold. As you know, there is Chapter 11 proceedings. I fundamentally believe that what the last years have shown is that the only way to have a sustainable, profitable business model is to focus on full price selling. So promotions are very short term. And I hope that with whatever comes out of the proceeding a new entity that will follow that principle because otherwise, there is no sustainable profitable business model. We have proven that. And we had moments in our history where other competitors tried to find short-term gains. We always sticked to our policies, and it has paid off. And so honestly, regardless of what will happen in the U.S. department store sector after Chapter 11, we feel there is market share gains to be had in the U.S. market because also a lot of this has started to be confusing and disappointing to customers. And you get -- what you see is what you get at Mytheresa, NET-A-PORTER, MR PORTER. It's inspiration. It's great service. It's curation, and that's what we focus on, and we see we can win with this.

Got it. And then shifting to the YNAP businesses. It seems like there's been some nice progress made with some year-over-year inventory reductions. Can you speak to the overall health of the inventory and how much work is left to be done?

Martin, you want to speak about inventories.

Yes, happy to speak to inventories. I called out the healthy inventory levels at Mytheresa with a good aging structure and stable, a bit decline despite double-digit growth. So that continues to be in great shape. NET-A-PORTER, MR PORTER is more working with the legacy of having bought too little. And therefore, we are increasing. We're investing in inventory to enable the growth in addition to all the other measures of the transformation plan. So inventory level is down at Mytheresa and driven by past time decisions. At YOOX, also inventory down. So the logic of the inventory or the current state of the inventory, it's fully in line with expectations. It's good. It's healthy, but we need to grow the inventory. We need to invest in working capital as this is also targeted in our transformation plan. So from the inventory side, the new teams, new leadership is heavily working on fall/winter '26 and now spring/summer '27.

Your next question comes from the line of Blake Anderson with Jefferies.

So I wanted to double-click on luxury YNAP that was strong in the quarter. I believe it was 6% growth, excluding currency, which was a bit better earlier than you expected. Can you unpack what drove the growth there in terms of new customers or the new merchandise you spoke to and then AOV versus units? And then what are you expecting for that business in the second half in terms of growth?

I mean the growth is -- mirrors very much the pattern that we have seen at Mytheresa. It starts from the top. So it sits with the big spenders. It's really, of course, it's driven by really focusing on that customer. It is driven by AOV increase. We have called out that we have seen double-digit AOV increases, both Sota. There is 2/3 is ARV, so more expensive items, which is not higher prices. It's actually sort of picking items higher at the ladder and also 1/3 is more units. And that's where the growth is coming from. And then what I always stress, we are massively reducing promotions. We have cut back on discounts. And that also helps, of course, -- on full price selling is not only good for margin, full price selling is also good for the top line. And so this focus on the top spender and this continuous detox, so to speak, from discounting and promotion, we will continue. This will be part of the strategy going forward, of course. And then with Q3, Q4, particularly where the fall/winter season comes into play, where we have bought more, where the new team has really driven the curation, we expect even better traction on the fall/winter collections.

Great. And then I wanted to ask -- my follow-up would be on the operating cash flow target, 2-year time line. Martin, anything you would call out specifically there in terms of drivers that could get you there potentially earlier? And then any color on the shape of the improvement over the 2 years?

Yes. I mean I really called out in the call that you always have to combine Q1 and Q2 and Q3 and Q4 given the seasonality of the business. So for the first half, given our strong operational cash flow in Q2, we have a cash burn of minus EUR 30 million. And for the full fiscal year, I expect overall cash burn to be well below EUR 150 million, given fiscal year '26 is our key transition year. So that implies that the payout of the severance packages and other transformational payouts will be in this H2, in this coming H2, so Q3 and Q4 leading to an overall cash burn of below EUR 150 million for the full fiscal year. And this is the key transition year. But I mean, the transformation plan is a 2- to 3-year program. And we clearly guided on the overall cash burn for the whole plan for all years. And so we expect the cash burn to be still significant next year, but then will decrease. And I also called out that we expect to be cash breakeven from operational cash in 2 years. So it is a fiscal year '26. The second half fiscal year '26 is a key cash outflow and fiscal year '27 will continue to be negative. But we are really happy with the flow, fully in line with our expectations. And so cash will not be the limiting factor for our transformation plan for returning to profitability and for reengaging on top line growth. And I think it is really worthwhile to repeat that we work on a fully funded transformation plan, and we work on a completely debt-free environment. So I have a very strong balance sheet on top to the additional cash for the transformation plan and the buffer.

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.