Mytheresa has long been in the spotlight, but its Q1 results this week are being even more closely watched given that it’s the company that will soon be tasked with turning around YNAP as it acquires the operation from Richemont. 

So what did its Q1 figures released late Tuesday tell us? In short, it saw almost 8% net sales growth and “improved” its profitability on an adjusted basis (which factors out certain exceptional costs). Not bad in an environment that’s very tough for the luxury sector, although the bottom line is that its actual reported losses widened.

Yet investors seemed pleased and the company’s shares rose almost 4% on the New York Stock Exchange, giving it a market value of close to $530 million. They’d earlier risen sharply on news of the YNAP deal too, yet the shares are still down over 80% since it first listed almost four years ago, continuing the up-then-down tradition of multiple recent fashion-linked listings.

Back with the highlights of the results, Average Order Value (AOV) grew by 9% to a new record of €720 with lower return rates; it saw double-digit US market growth; gross margin improvement of 150bps to 43.9%; and it sees the forthcoming YNAP acquisition as a “transformational opportunity to create a leading, global, multi-brand digital luxury group”.

Getting down to the basic numbers, in the three months to the end of September, net sales rose 7.6% year on year to €201.7 million and GMV growth was 6.3% to €216.6 million.

Profitability improved by 200bps at an adjusted EBITDA margin level of 1.4% in Q1, compared to -0.6% in the prior year period. Adjusted EBITDA was a profit of €2.9 million, up from a loss of €1.2 million this time last year, and adjusted net income was a profit of €5.4 million compared to a loss a year ago of €3.3 million. But the unadjusted operating loss this time was much wider at €30 million compared to €13.5 million a year ago and the net loss almost doubled to €23.5 million from €12.2 million. 

Importantly, positive developments included a 14% jump in US sales that accounted for 20% of its total. Europe accounts for half of it sales and was up 9%, although the company said that markets in the south of Europe are doing better at present than the north of the continent.

Between them, North America and Europe make up 70% of the company’s business so it’s less vulnerable to the currently tricky Asian (especially Chinese) market than some of the big names in luxury, although the company isn’t ignoring the region and continues to focus on initiatives there.

In Q1 that included the launch of its own Chinese brand name 美遴世 (Mei Lin Shi) and of the Mytheresa WeChat Mini Program, offering Chinese customers “a seamless and convenient shopping experience”.

Overall in the quarter, investment in initiatives to drive sales globally included the launch of exclusive capsule collections and pre-launches in collaboration with Chloé, Bottega Veneta, Saint Laurent, Loewe, Gucci, The Row and others.

And it held “highly impactful” top customer events around the world and multi-day “money-can’t buy” experiences in partnership with luxury brands, such an intimate dinner with Simone Rocha at Claridge’s in London, a supper club evening at club Le Bristol After Dark in Paris, its annual cocktail soirée at Bar Basso in Milan and a two-day experience with Tod’s in Milan.

Continuing with such programmes for the rest of the year should help its forecast of full-year net sales growth in the range of 7% to 13% and an adjusted EBITDA margin in the range of 3% to 5%. 

View from the top

CEO Michael Kliger said he was “very pleased with our results despite many short-term uncertainties. With strong revenue growth and positive adjusted EBITDA in the first quarter we continued our very positive business momentum that we have seen since the third quarter of fiscal year 2024.

“We have reaffirmed our leading position in a clearly consolidating sector and displayed our unique characteristic of profitable growth. We strongly believe that we will benefit significantly from the improving market conditions over the next quarters. Our strong growth with top customer, our record high AOV, our improved gross margin and the excellent customer satisfaction scores all highlight the fundamental health of our business.”

Just what the acquisition of YNAP will do to/for the business remains to be seen. As we’ve seen, Kilger noted that he’s operating in a “consolidating sector” and that’s clearly benefitting the firm. 

The demise of Matchesfashion, for instance, took out a major rival. And the company will soon own other key rivals such as Net-A-Porter and Mr Porter as part of the YNAP deal. 

While some might see that as a headache, last month Kliger told FashionNetwork.com’s Godfrey Deeny that he “aims to create a pre-eminent, multi-brand, digital, luxury group worldwide. Mytheresa, Net-A-Porter and Mr Porter will offer differentiated but complementary multi-brand luxury edits based on curation [and] inspiration. The three brands will share a large part of their infrastructure creating synergies and efficiencies while maintaining their different brand identities.”

If nothing else, there’s no denying that the year ahead will be an interesting one, both for Mytheresa and YNAP but also for the luxury sector as a whole.