LuxExperience (LUXE) Q4 2026 earnings call

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 4th Quarter and Full Fiscal Year 2026, and in June 30, 2026. With me today is our CEO, Michael Clegan. Before we begin, we would like to remind you that our discussions today will include forward-looking statements. Any comments we make about expectations, including our guidance for Fiscal Year 2027 and our medium-term targets are forward-looking statements and are subject to risks and uncertainties, including risks and uncertainties described in our annual report.

Many factors could cause actual results to differ materially, and we are on a no-duty to update forward-looking statements. In addition, we will refer to certain financial measures not reported in accordance with IFS on this call. You can find reconciliations of these non-IRFS 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 fourth quarter of Fiscal Year 2026 and the Full Fiscal Year for Lux Experience. We are very pleased with our results as they demonstrate that our group transformation is going very well and that we are outperforming the market.

At group level, we have delivered on our Full Fiscal Year 26 guidance as we achieved a GMV growth of plus 2.9% at constant currency and delivered a positive group adjusted EBA margin of plus 0.4%. We believe these are remarkable results just 15 months after taking over a financially distressed YNAB business. Compared to Fiscal Year 25 and considering all capitalized tech expenses, we have boosted the group adjusted EBA by 64 million euros.

Even more exciting, we achieved in the fourth quarter of Fiscal Year 26 a GMV growth of plus 7.9% at constant currency and the group adjusted EBA margin of plus 2.1%. In the fourth quarter, we had positive topline growth in all of our three reporting segments. At MITRESA, we have set again the gold standard in the fourth quarter in terms of growth and profitability.

The success is based on outstanding custom economics and a resilient profitable business model. This is exactly the formula that we now apply to Netaporta and Mr. Porter. In the fourth quarter, Netaporta and Mr. Porter combined now also delivered positive growth and profitability. At YUC's, our strategy to focus on the healthy core of the business and make the business model leaner is now showing clear results.

In the fourth quarter, YUC's achieved a positive topline growth and losses were cut almost in half compared to Q4 of Fiscal Year 25. With a tremendous progress made in the past 12 months and the strong business momentum in Q4 of Fiscal Year 26, we are clearly on track to achieve our medium-term targets of group net sales of Euro 4 billion and an adjusted EBA margin of 7 to 9%. For fourth fiscal year 27, we expect accelerated topline growth and further increased group adjusted EBA margin.

Our strong current trading reinforces our continued positive business momentum. Martin will later clarify our guidance for fiscal year 2027.

Let me now comment in more detail on the performance of the MITREZA business. We again outperformed the industry with double-digit topline growth and strong profitability. By focusing on wardrobe building, big spending customers, MITREZA possesses a very resilient and consistent business model driven by superior custom economics. A clear strategic focus and the excellent execution allowed MITREZA to become a 1 billion Euro business in fiscal year 26, marking a significant milestone in the company's success story.

In Q4 fiscal year 2026, MITREZA grew its net sales by plus 10.2% on constant currency basis compared to Q4 fiscal year 2025 and for the full fiscal year 2026 by 11.5% on constant currency basis compared to full fiscal year 2025. In the United States, the MITREZA business grew net sales by plus 39.3% on constant currency basis in Q4 fiscal year 26 compared to Q4 fiscal year 25. For the full fiscal year, the U. S. accounted for 23.8% of net sales of MITREZA's total business.

MITREZA's strengths and resilience are driven by superior custom in economics. In the fourth quarter of fiscal year 26, the number of top customers at MITREZA grew by plus 18% compared to the prior year period. Furthermore, the average spend per top customer in terms of GMV grew by plus 4.8% in Q4 fiscal year 26 versus Q4 fiscal year 25 and plus 4.3% for the full fiscal year 26.

The average order value last 12 months for MITREZA increased by a remarkable plus 13.1% to a record high of 875 Euro in Q4 fiscal year 26. The success of the focus on selling full price high-end luxury products to top customers is also evident by the fact that top customers accounted for 4.8% of all customers in numbers, but for 48.4% in terms of total GMV in fiscal year 26. The continued focus on selling full price also drove again the gross profit margin increase of plus 150 basis points in Q4 fiscal year 26 compared to Q4 fiscal year 25.

Lastly, MITREZA's excellent customer service proposition is highlighted by our internal net promoter score in PS of 83.6% in Q4 fiscal year 26. All these figures demonstrate the fundamental strengths and continued success of the MITREZA business based on superior customer economics.

The success with big spending, wardrobe building customers also makes MITREZA a highly desired partner for the world's most prestigious luxury brands. The fourth quarter of this year 26, MITREZA launched 11 exclusive capsule collections and featured four exclusive pre-launches or exclusive styles campaign. In collaboration with luxury brands such as Deutsche & Gabbana, Pucci, Prada, Butte Galvineta, and Priyone, Priyone, amongst many others. We also very proud to have recently started digital partnerships with two new true luxury brands, Fendi and Piaget, which are now available on MITREZA. Please see our investor presentation for more details on brand collaborations.

The fourth quarter of 2026, MITREZA also hosted more than 14 global top customer events and six exclusive money account buy events with luxury brands, including Zimmerman, Deutsche Gabbana and Priyone, across Europe, the United States and Asia, creating a strong sense of community for its top customers. MITREZA also returned with a second edition of Mizzou MITREZA, creating a successful yacht experience along the French Riviera hosting 29 events in 12 days, which hosted 790 customers on the boat.

Please see our investor presentation for more details on these unique money can buy experiences. To sum it up, MITREZA reaffirmed its clear leadership position in the digital multi-brand luxury landscape in fiscal year 2026. MITREZA sets the standard by delivering profitable growth based on its focus on big spending top customers. It does also serves as the internal blueprint for the successful turnaround of metaporté and Mr. Porter.

Martin will later show how the strong top line results of MITREZA are translated into excellent bottom line results. Let me now comment on the luxury segment comprised of metaporté and Mr. Porter. We are in high gear re-establishing both as leading digital multi-brand destinations for luxury fashion shoppers seeking editorial inspiration and brand discovery. By applying the secret sauce of Lux Experience, namely an obsessive focus on best customers, food by selling and cost discipline, we are successfully rebuilding strengths and resilience in their business models. For the first time since the acquisition, metaporté and Mr. Porter combined achieved top line growth and a positive bottom line in the last quarter of fiscal year 2026.

In the United States, net sales increased by plus 15.1% on a constant currency basis in Q4 fiscal year 26 compared to Q4 fiscal year 25. For the full fiscal year, the United States accounted for 49.6% of net sales of the total business of both stores combined.

Improved and strong custom economics are also key for the success of not the poté and Mr. Porter. The fourth quarter of fiscal year 26, after an initial focus on the quality of the customer base and the first quarters, we increased again the number of top customers by plus 3.2% compared to Q3 fiscal year 26. We increased 1.4% in Q4 fiscal year 26 versus Q4 fiscal year 25, and plus 5.3% for the full fiscal year 26.

The average order value last 12 months increased by plus 9.1% to 885 Euro for netaporté and Mr. Porter combined in Q4 fiscal year 26. They are top customers accounted for 4.3% of all customers and numbers, but for 49.1% in terms of total GMV in fiscal year 26.

The clear focus on full price selling to top customers instead of promotional discounting drove also a gross profit margin increase of plus 170 basis points in full fiscal year 26 compared to fiscal year 25. The customer satisfaction netaporté measured by our internal NPS remained at 59.7% in Q4 due to shipping backlogs in the warehouses, but for the full fiscal year 26, the NPS increased by plus 6.7% to percentage points compared to fiscal year 25.

All these KPIs confirm a significantly improved quality of the customer economics and business models of netaporté and Mr. Porter.

In line with the position as the leading digital multi-brand destinations for luxury fashion shoppers seeking editorial inspiration and brand discovery, netaporté and Mr. Porter launched in the fourth quarter of fiscal year 26, 36 editorial campaigns for exclusive brand and product launches with brands such as Chloe, Kate, Carolina Herrera, Tom Ford, Brunello Cochinelli and Celine amongst others. Netaporté also hosted 11 unique experiences for their EIPs, the so-called extremely important people with brand partners such as Kate, Chloe, Gucci and Scaparelli in the United States and Europe in Q4.

Netaporté also continued to boost its editorial strengths with exclusive Porter cover stories that generated a reach of 194 million in Q4 fiscal year 26. Please see our investor presentation for more details on the unique editorial content and exclusive activations of Netaporté.

Mr. Porter hosted six unique EIP experiences with brand partners including Xenia and Ralph Lauren in the United States and Italy. Mr. Porter also continued to strengthen its editorial voice with its journey, pushing brands, advice and style stories. In total, the top journal stories reached over 13 million views. Please see our investor presentation for more details on Mr. Porter's unique editorial content and exclusive activations.

To sum it up, Netaporté and Mr. Porter are re-establishing themselves as leading digital multi-brand destinations for luxury fashion shoppers seeking editorial inspiration and brand discovery. Positive top line growth, improved custom economics and positive bottom line results in the fourth quarter of fiscal year 26 underline the success of the ongoing business transformation. Martin will later provide more details on the bottom line results of the luxury segment comprised of Netaporté and Mr. Porter.

Lastly, let me comment on Duke's business performance. Our strategic focus on the core European markets and the leaner operating model in line with the lower margin and lower average order value nature of the off-price business is already showing clear results. Positive top line growth in the fourth quarter and adjusted EBITDA losses almost half speak to the success of the transformation thus far. This business momentum was further enhanced by Duke's brand activations throughout the quarter to reinforce its position as the leading destination for long lasting luxury fashion built around individual creativity, culture and community.

For the full fiscal year 26, net sales in Europe excluding the UK grew by plus 10.9% and accounted for 61.3% of net sales of the total Duke's business. The strong momentum in the European markets validates the strategy to focus on a healthy and more profitable core of the business. Besides the overall net sales increase for youths in Q4 fiscal year 26, the average spent the top spending customer in terms of GMV grew by plus 12.3%. The average order value last 12 months decreased by minus 3.5% to 243 euro in Q4 fiscal year 26. However, this was also driven by the reduced focus on the high AOV overseas markets.

In Europe excluding the UK, the AOV last 12 months increased by plus 2.1% in Q4 fiscal year 26. The gross profit margin decreased in Q4 fiscal year 26 driven by the mentioned de-stocking push. For the full fiscal year 26, the gross profit margin grew by plus 120 basis points to 38.5% driven by a much more demand driven pricing system increasing the share of first price sales. Duke's customer satisfaction measured by our internal NPS reached 49.1% in Q4 fiscal year 26, increasing by 1,520 basis points compared to Q4 fiscal year 25, showcasing also the effect of the lux experience secret sauce on Duke's customer service operations.

All the above KPIs demonstrate that the strategic focus on the healthy core is resulting in much improved customer economics. In the fourth quarter of fiscal year 26, you leveraged its 26th anniversary to drive brand engagement, consideration and new customer acquisitions through flagship community events in Milan and for today. The corresponding social media campaigns generated over 30 million estimated reach almost 550,000 campaign page visits and nearly 1,000 new customer registrations.

These initiatives successfully leveraged a brand milestone into measurable commercial and brand performance reinforcing Duke's evolution into a culturally relevant lifestyle brand. Please see our investor presentation for more details on these events and activations.

I head over to Martin to discuss the financial results in more detail.

Thank you, Michael. In this call, I will focus the top line development on net sales and constant currency, but before I will provide you with more details on luck experience group and individual segment performance. Let me summarize the financial highlights, looking back into the full fiscal year 26 and fiscal Q four and a June 30, 20, 26.

We have delivered on our full year guidance on top and bottom line with one year into our transformation. We're already breaking even on adjusted even though for the full year have no bank debt in our balance sheet and 442 million euro cash and cash investments better than expected.

In fiscal year 26, we achieve significant cost savings in S&A of around 55 million euro or minus 9.9%. The last three months of the fiscal year running from April to June stood as an inflection point in our overall transformation.

Net sales in the quarter grew by plus 7.6% at Lux experience, the highest in any quarter of this fiscal year.

In fiscal Q4, we decreased our S&A cost ratio by 400 basis points from 21.6% to 17.6% versus prior Q4 adjusted even the margin for Lux experience stood at a positive plus 2.1%. The third consecutive quarter with positive and increasing adjusted even though these strong like experience numbers are based on impressive performance at all seconds.

My trees are again with double digit net sales growth in the quarter at plus 10.2% and further strong increase of adjusted even though plus 10.9% in the quarter compared to previous year. Reporting plus 5.6% net sales growth for the first time and also achieving positive adjusted even though profitability in the quarter.

You as well. And for the first time, re embarking on net sales growth with plus 6.6% of the quarter. In addition, impressive profitability improvement at you with a 920 basis points increase and adjusted even though versus Q4 of fiscal 25. As you know, expenses at you decreased by minus 20% versus the previous year quarter.

And now as usual, I will first review and more detail like experience performance at total segments view and then walk you to our three business segments luxury my tree.

I will focus top line development on net sales in constant currency. Our GMV numbers follow a similar pattern and are always fully disclosed in our press release investor presentation and annual report.

In addition, all numbers in previous year include capitalized IT expenses for a true like for like comparison. We just continued this practice for the acquisition.

Unless otherwise stated, all numbers refer to you like experience new net sales by plus 7.6% in fiscal Q4. This was the strongest quarter you were your growth in the fiscal year.

In fiscal Q4, we achieved a positive adjusted even though margin of plus 2.1% marking our third consecutive quarter with positive adjusted even though profitability.

The success is also visible in the strong sequential adjusted even though margin improvement. Looking at the six month period to reduce the seasonality effects, fiscal H2 adjusted even though margin improved by 220 basis points compared to fiscal H1 for the full fiscal year 26 and in line with our expectations. Our adjusted even though margin returned to positive territory, improving 260 basis points to 0.4% compared to the priority.

And please remember, this turnaround comes after years of X Y net with a persistent lack of profitability for the peak of a negative minus 175 million. Even though in their fiscal year 24.

As you know, one key driver of improved probability is our focus on action a cost savings. In Q4, luck experience, as in a cost ratio improved significantly by 400 basis points to 17.6% compared to 21.6% in the prior quarter. If you look in the course of fiscal year 26 and on a quarter by quarter basis, the action a cost ratio dropped in total by 430 basis points from 21.9% in Q1 to 19.1% in Q2, further improving to 18.3% in Q3 to now 17.6% in Q4 fiscal year 26. In the full fiscal year, 26 action expenses went down by 55 million or minus 9.9% of the cost base.

In the fourth quarter of fiscal year, we generated a positive operating cash flow of plus 9 million euros. Operating cash burn in the full fiscal year was at minus 108 million significantly better than the minus 120 million maximum operating cash burn communicated previously.

As mentioned before, the group ended fiscal year with a continued strong balance sheet and no bank debt holding cash and cash investments of 442 million.

Noteworthy is that we have Citibank join our existing strategic banking partners, Unigred, Jacob Morgan and Commerts Bank for our long term value creation setup. With that, our banking RCF also increased by 25 million to now 125 million. Despite strong top line growth in the federal on group level only increased by plus 3.7% compared to the end of the last fiscal year.

We are pleased to share that on September 3, management received the authorization for a share repurchase program of our ADRs, which may be executed for an accelerated share repurchase program and at management's discretion based on market conditions. We have not implemented the repurchase program as of now, and there's no guarantee that we may do so.

Let me now review the performance of our my Teresa business. We've seen continued strong net sales growth on all coms. During the fourth quarter of fiscal year 26, net sales grew by plus 10.2% to 269.2 million compared to the prior year period for the full year net sales grew by plus 11.5% to 994.3 million.

We continue to significantly take market share. In Q4, my Teresa's cross covered margin increased by 150 base points to 49.7% compared to 48.3% in Q4 fiscal year 25. For the full fiscal year, my Teresa's cross covered margin increased by 150 base points to 48.5%. We were able to again significantly improve the cross covered margin driven by our successful focus on full price.

Delivering a continuous cross-profit margin increase while at the same time taking market share with double digit top line growth is a testament to the strength of our positioning.

Subsequently, the adjusted EBITDA margin at my Teresa expanded 20 basis points during the quarter to 6.6% as compared to 6.5% in the prior year period. For the full fiscal year, the adjusted EBITDA margin significantly improved by 140 basis points from 4.9% to 6.3%.

On absolute terms, adjusted EBITDA grew by plus 39.8% to record 62.3 million in the full fiscal year. At my Teresa, I. E. part territory funds in Q4 had an insignificant effect of 50 basis points in the adjusted EBITDA margin.

In some and looking at the my Teresa business model, we have successfully coped with various tariff situations in the past quarters and years and expected to do so in the future. From fiscal year 24 to fiscal year 26, we were able to increase the adjusted EBITDA margin by 320 basis points.

We are continuing our effective inventory management with inventory levels at my Teresa up only plus 3.9%. This fight continues double digit top line growth.

In fiscal year 26, my Teresa had a positive operating cash flow of around plus 20 million. Being able to achieve strong operating cash flow, even with double digit top line growth, highlights the reliability and resilience of our business model. Let me now comment on the luxury Netaporte and Mr. Porter segment in more detail. At the fourth quarter, Netaporte and Mr. Porter delivered a clear turnaround across both top and bottom line driven by strong execution of our new leadership teams and the success of our transformation plan.

During the fourth quarter of fiscal year 26, net sales increased by plus 5.6% to 273.9 million compared to prior period for the full fiscal year, net sales grew by 0.5% to 994.8 million.

This stands as an inflection point, as the net Mr. P segment had experienced continued strong revenue decline in preceding years and in preceding quarters. As we accepted revenue decline was stronger focus on higher quality customer quarters.

It is reassuring to now report top line growth on the basis of a much stronger customer file. In addition, our commitment to full price selling and drove a strong cross-profit margin increase of 160 basis points to 48.3% on the second half of fiscal year 26 compared to the first half.

While the cross-profit margin decline in the quarter was driven by previous year points for the full fiscal year 26, the cross-profit margin increased as well by 170 basis points from 45.9%. In fiscal year 25 to 47.5% in fiscal 26.

Lowering our cost days remains the central pillar of our transformation and our S&A cost improvements showed acceleration throughout fiscal year 26.

For Q4, our S&A cost ratio improved 500 basis points year over year from 24.5% to 19.5%. The S&A cost ratio in the second half of fiscal year 26 improved by 350 basis points versus the first half of the fiscal year.

In absolute terms already in the first year of our transformation at the net Mr. P segment, we achieved 29.8 million euro S&A cost savings versus fiscal year 25 or minus 11% of the cost base. In fiscal Q4, the 19.5% cost ratio at net Mr. P was still 700 basis points higher than at my Theresa and thus still leaves significant opportunity for further cost savings, especially in tech and operations.

On the bottom line, we are very proud to report that this is our first quarter in fiscal year 26 achieving positive adjusted EBITDA at net Mr. P. Coming in at a 2.7% margin.

This milestone marks a significant step forward, representing an expansion of 230 basis points compared to Q4 of last year.

With this H2 of fiscal year 26 was also already positive on adjusted EBITDA level at a plus 1.2% margin versus minus 2.5% in fiscal H1. At net Mr. P, IE Parterra free funds at a positive effect of 250 basis points in the adjusted EBITDA margin in the quarter.

The effect is stronger than at my Theresa, given the operational setup of net Mr. P with a warehouse in the US and a higher US revenue share.

Even if you take out the IE Parterra refund effect, fiscal Q4 would still be positive at net Mr. P. The net Mr. P operational setup is fully capable of dealing with various tariff situations and is expected to continue to do so. Inventory levels at net Mr. P are slightly up plus 5.5% to previous year and going forward, we will continue to enable top line growth at net Mr. P with adequate working capital.

concentrate our resources on driving our poor off-priced business at EUC's. In line with our transformation plan, EUC's were focusing on the healthy core of the business, deprioritizing overseas markets with high cost to serve and implementing a lean operating model supported by simplified off-priced tech environment.

As Michael mentioned, and similar to net Mr. P, we achieved top line growth at EUC's already in the fourth quarter. Net sales for the quarter came in at 110.5 million representing growth of plus 6.6%.

A key focus of our transformation is on implementing a highly efficient operational structure tailored to the lower AOV and slightly lower gross margin nature of the off-priced business. Our S&A cost ratio in H2 of fiscal year 26, compared to H2 of the previous year, improved significantly by 560 basis points from 29.4% to 23.8%. This equals to 17.5 million absolute cost savings or minus 23.3% of the cost base.

The acceleration is also visible throughout fiscal year 26, as the H1 S&A cost ratio was at 28.1%. The S&A cost savings at 30 basis points higher than H2 of fiscal year 26 at 23.8%. On the back of these S&A cost savings, adjusted EBITDA improved significantly in fiscal year 26. The Q4 adjusted EBITDA margin in fiscal year 26 was at minus 10.5% versus minus 19.8% in the previous year. This represents a 920 basis points margin improvement.

The acceleration during fiscal year 26 is also visible in comparing the minus 7.8% margin in fiscal H2 with minus 10.9% in fiscal H1, a 310 basis points margin improvement from H1 to H2 of fiscal year 26.

Inventory levels at Ux were stable at plus 0.3% versus previous year. Let's look ahead to fiscal year 27, which has already started in July 26.

We are very proud of the significant progress achieved in fiscal year 26, which will have a full year effect in fiscal year 27 on top to additional measures already defined. Supported power transformation activities in fiscal year 26, net sales showed an increase of plus 3.2% with the top line success of Q4 and our visibility into Q1 of fiscal year 27.

We expect to grow mid to high single digit at group levels for fiscal year 27 in total. On bottom line, in fiscal year 26, we achieved a break even for the full year and a plus 1.7% adjusted even a margin in H2 of fiscal year 26.

For fiscal year 27, we expect the adjusted even a margin at around 2% to 3%. To give you some broader commercial context on the business, I would also like to provide indications for our three segments. At my Teresa, for fiscal year 27, on top line, we expect continued high single digit to low double digit growth and adjusted even a profitability slightly better than in full fiscal year 26.

Not compared to Q4 at use. We expect mid single digit top line growth with the adjusted even a margin remaining negative in the mid single digit range.

We expect to reach adjusted even a break even at use in fiscal year 28. Given the seasonality of our business, the strong fiscal Q4 performance for the group should not be expected throughout fiscal year 27. Fiscal Q1 and Q3 usually have a lower performance and fiscal Q2 and Q4 have a stronger performance than the average.

For the current fiscal Q1, which runs from July, September 26, we are very pleased with the performance. Therefore, on group level, we expect high single digit net sales gold and a just slightly negative adjusted even a margin, which is a strong improvement to prior years, adjusted even a margin. So we expect a significantly improved Q1 performance beyond fiscal year 27.

We expect an annual 150 to 250 basis points increase in adjusted even a probability until we reach 7 to 9% adjusted even a margin medium term at 4 billion net sales.

We have a strong cash position today and anticipate the remaining transformation in the next two years to absorb another 150 to 250. million total cash burn.

We therefore expect to have a significant cash buffer during and after the transformation of a minimum of around 200 to 300 million euros without adding any cash utilization of our RCS.

On September 3, management received the authorization for share repurchase program of our ADRs, which may be executed for accelerated share repurchases and at management discretion. Based on market conditions.

We have not implemented the repurch program as of now, and there's no guarantee that we may do so. In summary, we are at an inflection point for lecture experience.

After the first year of our transformation, we are already breaking even on adjusted even more. All segments are set for further growth and fiscal 27 to take significant market share. And in total, a 2 to 3% adjusted even a margin.

We expect to grow even stronger with further improving industry sentiment. The turnaround of X, Y and M is bearing fruit with significant sequential and accelerating cost savings and adjusted even the improvements.

We have a significant cash buffer for whether any further macro uncertainties. We are committed to 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. Lux experience is the one and only digital destination for luxury and through the rest worldwide. The strength of our businesses is based on resilient business models and superior custom economics. The results of Q4 fiscal 26 underlined this and show that tremendous progress we have achieved in our transformation plan in just the last 12 months.

We have delivered on our fiscal year guidance. My Teresa again performed best in class in the sector. Mita Porter and Mr. Porter achieved the clear turnaround and you is in high gear to achieve the same. We have proven that at Lux experience we possess the secret sauce and digital luxury. You just heard from Martin for fiscal year 27. We now expect the third acceleration of top line growth and even healthier profitability as a group. We are well positioned to benefit from the sustained growth of digital luxury and the improvements in the global luxury sector. We expect to continue to generate enormous value for our customers, brand partners and shelters.

And with that, I ask the operator to open the line for your questions.

Okay, let me take on the geography and ERP questions, Oliver, and then Martin takes on the margin and youth's profitability. So geography-wise, I mean, as stated, the U. S. is at the moment the fastest growing digital luxury market. The growth rates we deliver for us clearly indicate we are taking market share because this is even better than what we see and hear from others in the U. S. market. The U. S. consumer is really willing to spend particularly at the very high end that we focus on.

Europe continues to be a good market, but Europe is polarized regionally, but also probably even more polarized by the different segments. We see real pockets of strengths where wealth has agglomerated, be it Italy, be it Spain, Portugal, Greece, as a lot of influx of new money.

That Europe is also a great success case for yukes, is to us no surprise, because at the same time we see in some markets really sluggish demand for luxury products, be it France, Germany, and I mean domestic, not tourism demand. But here the polarization is, of course, also helping us on the other end of the portfolio spectrum with yukes success.

Middle East, the demand has come back, a Arabic peninsula, the demand has come back, but of course there are still weekly, monthly swings to the positive or to the negative. And also a lot of the demand of our customers in the last month happened abroad, so we will see how much the domestic demand of those clients that we continue to serve 12 months around will pick up as we move now back. Back to the region, September, October, November.

And lastly, China, greater China, we believed at the beginning of the year we will see the bottom and it will rapidly improve the summer was disappointing, while Southeast Asia still offers opportunities. For Neta Porta, Mr. Porta, for Maita Reza, the U. S. is the focus, that's where our marketing spend pays off nicely.

For yukes, it's really the core market Europe, 23% gross in the last quarter, fantastic for that business. So we're very pleased with that. On the ERP side, we make continuous progress. We will have a big replacement of many different elements. The HRS system has already been introduced globally in May. The ERP system for Neta Porta, Mr. Porta, has been upgraded to BC Central and is live. So we've done the switch. ERP upgrades can be quite disturbing to business. We have done so with very little disturbance to the business. So we are running out on BC Central, both Maita Reza and Neta Porta, Mr. Porta. It will be another big system upgrade in autumn on all the buying and merchandising business operations in Neta Porta.

And the web shop migration continues to progress very well. We had the very first demo sessions on the app on the website. So we are fully in line, if not even slightly ahead, on the systems upgrades.

Martin?

Yeah, happy to take the margin questions. As you say, the profitability improvement is coming from top line, but also on a cross ratio perspective or income ratio on gross profit margin, where we expect continuous further improvement, and especially on the S&A cost ratio, especially at that Mr. P and Yukes. They are significant improvements, and also the top line will obviously help also on the cost ratio to get that closer to the Baita Reza benchmark level. Yukes, especially, I mean, we had in the full fiscal year 26 reported top line decline minus 8.4%.

And we guide fiscal year 27 to mid single digit decline, driven by what Michael said, refocus on the European geography, with continuous focus on the healthy core customer, because we are really focusing on, you know, turning Yukes around and increasing significantly increasing profitability.

For fiscal year 26, we reported minus 9.4% adjusted email margin. And for fiscal year 27, now with the continuous efforts that we're doing on S&A, especially on S&A, then guide to a mid single digit, negative profitability. So again, almost half the losses there. And also I had earlier communicated that for fiscal year 28, we clearly target and expect the turnaround at Yukes on adjusted EBITDA level.

Thank you, that's regards.

Blake, thanks for the question. The good thing is, as we report now, and the Q1 is almost finished, we obviously have clear visibility in Q1, and I'm very happy with the overall performance. So, fiscal year 26 was strong. We enter fiscal year 27 with a strong Q1, which is great. And obviously, as you know, there are multiple factors, not only on seasonality, how Q2 and Q4 will play out our strong quarters, fiscal Q2 and Q4, and how fiscal Q3 will turn out as we had a very strong fiscal Q3 in the last, this is clearly too early to tell. But to guide the whole, for the whole group, to mid to high single digits, I think is a huge progress that we see, that we saw in Q4 and then now guide for the full fiscal year.

And obviously, that implies, and we also gave a bit of a color on the second performance, that all three segments have strong top line growth. My choice, Netaportia, Mr. Porter, and Nukes, so a continued commercial success, and we're really happy and therefore have a strong guidance for fiscal year 27.

Thank you.

Anything in terms of, like for like price increase, category mix, units per transaction, anything about that, and sustainability of AOV into 2027, that double digit growth. And then if I could also ask on Yukes, Q4 was really strong, led by Europe, as you called out, curious if there's anything, any more color you can provide on the strength there in that region in Q4?

Sure. Happy to jump in on this. So clearly, high AOV is really helping on unit economics. So we're very happy that we have achieved now 875 at Myterisa, and we already have 885 at Netaportia. Mr. Porter, drivers for this are the growing importance of the top customers, top customers per definition and per reality, always have a higher basket value. They shop higher item value, price items. So it's a mix effect that shows for the company, if the share of the business with top customer goes up to almost 50%. The 1,200, 1,300 AOV baskets of those customers take a bigger weight without significantly changing the items.

We do see also, and other big influences, the increasing expansion of fine jewelry. We have Burghari on Myterisa, we launched Piaget on Myterisa. We have Katie, Rachael Hall. So we have a really good representation and see increasing appetite for also fine jewelry in the range of 20,000 to 80,000 euro per piece. So that also drives, but fully pays into the focus on top customers.

On the success in Europe, there is a polarization. And there is, of course, let's call it, but I was middle class luxury spend customer who think twice now how much they spend. There is inflationary pressure, there's energy prices. So we believe having yukes in the portfolio that offers luxury fashion at deeper discounts because they're off season because they're 1 year old items. But for people that want to have great brands at those prices, it's a great offer. And the focus on Europe is engineered.

We have an AOV of 250, 243, I believe, in nukes. And so it makes much more sense to incur shipping costs for Europe for the continent than trying to compete at this stage in the US or in Japan. And for big business that that may change in the future, but at the moment, we focus on the healthy core.

Very helpful. Thanks so much.

There's no one time effect that drove the really nice top line for another reporter, Mr. Porter in the US. It's just our marketing gets better, our duration gets better. We upgraded or completely changed our customer messaging backbone. Ripped out the old infrastructure, put a new infrastructure, our storytelling has completely been redone by the team since of January and all of that resonates. And then you put on top of it a lot of activations. Of course, also focused on the US customers, focused on the US markets.

That's the formula. And it's not defining the formula. It's executing that makes the difference. And therefore, our guidance that marketing laid out is completely based on continuing exactly on that trajectory so that the last quarter was not a one time off. We will see continued success. Nataporta and Mr. Porter, almost 50% of their business is based in US.

So that always has been and will be a strong hold. And we just kicked off New York Fashion Week with big campaigns, big events also by Nataporte in New York. And thus, this is not a one off, this is a continuation and marketing expense.

We are very happy with what we see. It's a dual effort. I mean, the marketing cost of Nataporte have a higher share of editorial content. We launched a portal magazine cover with Cindy Crawford on that basis. We had an event last week with Cindy and her friends in New York. We launched a portal magazine with Serena Williams on it. And she also attended the event. And so that's an important part of it. But then also digital marketing, we completely exchanged the tools and the more important the algorithms and get better and better now. I mean, something we have done since 2017 on my Teresa.

So all of that pays off, but we have just started. There's so much more we can do and it works. So we are very happy with the spending level. And if we see more opportunity, we will actually spend more.

Great. Thank you.