LUXE

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

Thank you, operator, and welcome everyone to the LuxExperience B.V. investor conference call for the third 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 third quarter of fiscal year 2026 of LuxExperience. We are very pleased with the results of the third quarter. We are making great progress with the ongoing transformation as a group. We achieved a GMV growth of +0.3% at constant currency in the third quarter, despite the outbreak of war in the Middle East in March. We also achieved a profitability at group level of +0.9% in adjusted EBITDA margin, which is the second profitable quarter in a row. Finally, we achieved again significant improvements on many KPIs across all three business segments, underlining the successful execution of our transformation plan.

We are fully on track and will achieve our guided results for the full fiscal year 2026. Our success story with our Mytheresa business continues as we outpace the market in terms of growth and further improved our profitability despite the geopolitical headwinds in March, which in the meantime have subsided for our resilient customer base. We also saw further improvements at NET-A-PORTER and MR PORTER, driven by the new strategic focus on customer service, full-price selling, and cost discipline. At YOOX, our strategy of focusing on the healthy core of the business and the good progress in implementing a leaner operating model continues to show clear results in line with our expectations.

In addition to our guidance for fiscal year 2026, we therefore also confirm our medium-term target for the group, with net sales of EUR 4 billion and an adjusted EBITDA margin of 7%-9%. Just to provide context for the EUR 4 billion net sales medium-term target, the most recent Bain and Altagamma report estimates the global online luxury market at EUR 75 billion. Overall, LuxExperience is the clear digital multi-brand leader for luxury enthusiasts globally, and we are perfectly positioned to benefit from the sustained growth of digital luxury and the ongoing consolidation within the sector. Before reviewing the performance of the third quarter further, I also want to mention that we have successfully closed the sale of the set of assets powering THE OUTNET on April 30, following the binding agreement announced last October.

We are very confident to have found the right new home for THE OUTNET, and we now are able to solely focus on our YOOX business in off-price. Let me now comment on the performance of the Mytheresa business in more detail. We are very pleased with the strong results in the third quarter of fiscal year 2026, which are fully in line with our expectations. Mytheresa's clear focus on wardrobe building, big-spending luxury customers, and their need through inspiration by curation, highest quality service, and community building with physical events drove against strong, profitable growth. Our very resilient, consistent business model and excellent execution allowed us to achieve this despite the headwinds from the outbreak of war in the Middle East.

In Q3 of fiscal year 2026, Mytheresa grew its net sales by +9.9% on a constant currency basis compared to Q3 of fiscal year 2025. The first nine months of fiscal year 2026, net sales grew by +12.0% on a constant currency basis. In the U.S., which is a key market for growth, net sales growth reached +33.8% on a constant currency basis in Q3 fiscal year 2026 compared to Q3 fiscal year 2025. In the third quarter, the U.S. accounted for 25.8% of net sales of our total Mytheresa business. We saw in March the impact of the war in the Middle East on customer sentiment globally, we have already seen again strong growth in the business in the last weeks.

This proves the resilience of our business model as our clients are globally mobile and dipped in sentiment are mostly short-lived. Mytheresa's financial strengths and continued growth are driven by its outstanding customer base. In the third quarter of fiscal year 2026, the top customer base of Mytheresa grew by +18.6% compared to the prior year period. Furthermore, the average spend per top customer in terms of GMV remained quite stable with -1.5% in Q3 versus Q3 fiscal year 2025. The average order value last 12 months for Mytheresa increased by +12.5% to a record high EUR 847 in Q3 FY 2026, demonstrating the success of our focus on selling full price, high-end luxury products to top customers.

Mytheresa's gross profit margin grew by 240 basis points in Q3 FY 2026, which further underlines our successful strategy of full price selling. Mytheresa's customer satisfaction, which we measure by our internal Net Promoter Score, reached 86.8% in Q3 FY 2026, representing the highest quarter score in the last four years. All these figures serve as a testament to the fundamental strengths of our Mytheresa business. Our success with big-spending, wardrobe-building customers makes Mytheresa a highly desired partner for luxury brands. In Q3 FY 2026, we saw again many high-impact campaigns and exclusive product launches underlining Mytheresa's strong relationships with luxury brands. We were the exclusive pre-launch partner for Demna's debut as creative director at Gucci with the La Famiglia collection for womenswear and menswear.

We also pre-launched styles of Balenciaga and Alaïa's runway collections, as well as of Saint Laurent Summer 2026 collection. We launched exclusive runway looks from Loewe and Bottega Veneta's Spring/Summer 2026 collections for womenswear and menswear. It is also very noteworthy that we launched the namesake brand of Phoebe Philo on our website in March. Please see our investor presentation for more details on these capsules and exclusives. In addition to creating desirability for our top customers with exclusive digital campaigns and product launches, Mytheresa also creates desirability and a sense of community for the top customers through unique money-can't-buy physical experiences. Highlights included an intimate Valentine's Day cocktail Mytheresa hosted together with Khaite in attendance of the creative director, Catherine Holstein, at Bemelmans Bar in New York.

In Florence, Mytheresa created a one-day experience with Gianvito Rossi for his namesake brand. Guests enjoyed a private visit to Palazzo Vecchio, followed by a garden welcome and dinner at Villa Cora. Another highlight was an industry cocktail event in Shanghai that we hosted for executives and key partners from leading luxury brands at the iconic Spago Shanghai, reinforcing Mytheresa's commitment to further strengthen its presence in the Chinese market. Finally, Mytheresa continued to offer guests a captivating experience at the Maison Mytheresa pop-up in St. Moritz. The setting brought Mytheresa's world to life through trunk shows, presentations, and workshops for invited guests. Please see our investor presentation for more details on these unique money-can-buy experiences. To sum it up, Mytheresa delivered strong profitable growth fully in line with our expectations in the third quarter.

We see this as further proof of the strength of our business model and consistency of our execution. Martin will later show how the strong top-line results translated into excellent bottom-line results. Let me now comment on the luxury segment comprised of NET-A-PORTER and MR PORTER. In the third quarter of fiscal year 2026, we saw continued improvements as a direct result of the new strategic focus on full price selling, cost discipline, and on customers seeking editorial inspiration and brand discovery. In Q3 fiscal year 2026, net sales declined by -5.1% on a constant currency basis versus Q3 fiscal year 2025 for NET-A-PORTER and MR PORTER combined. In the first nine months of fiscal year 2026, net sales declined by -1.6% on a constant currency basis.

Europe, excluding the U.K., increased by +4.3% in terms of net sales in Q3 fiscal year 2026 compared to the prior year period. The overall net sales decline was driven by the ongoing strategic focus on higher value customers. The reduction of promotions compared to Q3 FY 2025. While we saw in March also the impact of the war in the Middle East on customer sentiment globally, we see again solid growth for NET-A-PORTER and MR PORTER in the weeks since end of March, thanks to the resilience of our customer base to such exogenous shocks. While the overall top line for NET-A-PORTER and MR PORTER combined declined in Q3 FY 2026, the average spend in terms of GMV per EIP, the so-called extremely important people was quite stable with only -1.4% in Q3 FY 2026 versus Q3 FY 2025.

The average order value last 12 months again increased by +7.9% to EUR 865 from NET-A-PORTER and MR PORTER combined. The gross margin increased by a high 700 basis points in Q3 FY 2026, driven by a higher share of full price sales and significantly reduced discount activities versus last year's period. The customer satisfaction at NET-A-PORTER, measured by our internal net promoter score, has seen a consecutive improvement from 62.3% in Q1 to 65.3% in Q2, and now 68.1% in Q3, which is an increase by +890 basis points compared to Q3 FY 2025. The secret sauce of LuxExperience experience is clearly showing its effect. All these KPIs point to a significantly improved health and quality of the business of NET-A-PORTER and MR PORTER combined.

In the third quarter of FY 2026, NET-A-PORTER and MR PORTER continued to drive customer engagement through uniquely engaging editorial content and unique EIP experiences. NET-A-PORTER invited VIPs, tastemakers, and EIPs to an exclusive three-day winter experience, including snowshoeing, stargazing, and evenings at a hidden speakeasy cabin in the newly opened One&Only resort in Big Sky in Montana. During fashion month, NET-A-PORTER celebrated New York Fashion Week with a dinner hosted with Willy Chavarria. Attending guests included Julia Fox, Jack Harlow, Becky G, Tove Lo, Lineisy Montero, to name just a few. During London Fashion Week, NET-A-PORTER partnered with Jonathan Anderson for a private tour of his brand new JW Anderson boutique exclusively for NET-A-PORTER EIPs. Moreover, NET-A-PORTER launched its spring/summer 2026 campaign, Le Virage, in March.

The series of video-first vignettes, storytelling, and celebrating the new season's key fashion achieved a global media reach of over 64 million impressions. MR PORTER featured exclusive interviews with Hollywood icons Jon Hamm and Kit Harington on the MR PORTER Journal. Jon Hamm's story reached 2.4 million views on Instagram. A video story about Danish brand NN07 reached over 5 million views. MR PORTER also created global EIP events, including a two-day immersive style suite in Hong Kong, a co-hosted brand dinner with bespoke shoemaker George Cleverley in Miami, and invited 10 guests to an intimate lunch hosted by Sir Paul Smith in London. MR PORTER also launched exclusive capsules, such as a 48-piece capsule with Brunello Cucinelli. Please see our investor presentation for more details on NET-A-PORTER and MR PORTER's unique editorial content and exclusive events.

In summary, the third quarter has seen further sequential improvements at NET-A-PORTER and MR PORTER, fully in line with our ongoing transformation plan for both businesses, despite the headwinds from the war in the Middle East in March. That, by the way, have already decreased significantly in recent weeks. Martin will later provide more details on the progress achieved in bringing the NET-A-PORTER and MR PORTER luxury segment back to profitability rather soon. Lastly, let me comment on YOOX performance in the third quarter of fiscal year 2026. We are pleased with the progress of the ongoing transformation of YOOX, including the focus on core countries and the implementation of a leaner operating model to better serve the lower margin and lower AOV nature of the off-price business.

In parallel, YOOX celebrated a brand rebirth with the successful launch of its new brand identity in line with its new strategy and positioning. In Q3 fiscal year 2026, net sales declined by -7.4% on a constant currency basis, versus Q3 fiscal year 2025 for YOOX. In the first nine months of FY 2026, net sales declined by -8.9% on a constant currency basis. In Europe, excluding the U.K., a clear geographic focus going forward, net sales increased by +7.0%. Compared to Q3 FY 2025, the overall net sales decline is mainly driven by the reduction of weight of overseas markets with high cost to serve in line with the renewed focus on a healthy geographic core for the YOOX business.

While the overall net sales declined for YOOX in Q3 FY 2026, the top spending customer average spend in terms of GMV grew by +1.3% in Q3 FY 2026 versus Q3 FY 2025. The average order value last twelve months increased by +1.7% to EUR 247 in Q3 FY 2026. The gross profit margin increased by 620 basis points to 37.5% in Q3 fiscal year 2026, as compared to 31.3% in the prior year's quarter, demonstrating the success of the new strategic focus on the healthy core. YOOX customer satisfaction measured by our internal net promoter score reached 48.8% in Q3 fiscal year 2026, increasing by +1,270 basis points compared to Q3 fiscal year 2025, showcasing also the effect of the LuxExperience secret sauce on YOOX customer service operations.

All the above KPIs indicate that the focus on the healthy core of the YOOX business is bearing fruits. In the third quarter of fiscal year 2026, YOOX celebrated the rebirth of its new brand identity in line with its new strategy and positioning. YOOX unveiled its future color scheme, proprietary layouts, and a renewed tone of voice in March. The rebranding has been rolled out on digital channels with full implementation, including new app and website interfaces and offline packaging planned until the end of the year. The brand rebirth story drove strong media coverage. Please see our investor presentation for more details on the new brand identity. Moreover, YOOX leveraged cultural moments across Milan and Berlin to create memorable experiences signaling the brand's rebirth.

In Berlin, YOOX, together with Sleek Magazine, hosted an exclusive party during Berlin Fashion Week at the famous Borchardt Restaurant that seamlessly blended design, cultural relevance, and community. During Berlinale, YOOX challenged the imagination through a movie-inspired experience at the Italian Embassy party. In Milan, YOOX hosted its timeless brand event, unveiling Camerino, a fitting room installation and new stage for self-expression, creativity, and reinvention. The event brought together KOLs from the fashion industry and lifestyle media at Palazzina Appiani at the heart of Milan Fashion Week. During Milan Design Week, Yoox introduced Il Camerino, unveiled by Keta Bart. The project was selected as one of the district's highlights and was introduced during the official press conference.

All events boosted customer engagement through community building, delightful experiences, increased the guests' emotional bond with Yoox, and generated reach on social media and press coverage. Please see our investor presentation for more details on these events. To sum it up, the focus on the healthy core for Yoox continues to show clear improvements in line with our expectations and the brand rebirth of Yoox with a new brand identity and new customer focus has only just begun. Let me now also provide you with a quick overview on the application and usage of AI at LuxExperience as we have received questions on our approach to this technological seismic shift. For a long time, we have used intelligent algorithms to optimize our customer targeting and marketing spend based on predictive models for customer value estimates.

With the revolution of generative AI, we have expanded widely the usage of algorithms to improve the customer experience with better and more personalized real-time content, such as product and newsletter recos, on-site search, on-site merchandising, as well as product copy and imagery. We are live here based on our partnership with Google Vertex AI. We are also seeing huge benefits in software development to support our aggressive tech transformation roadmap at NET-A-PORTER and MR PORTER. We are constantly expanding the use case scenarios with a clear focus on improving the quality and accuracy of our customer experience. Please see our investor presentation for more details on the usage of AI at LuxExperience B.V.

Now, after having reviewed the very good commercial results and improvements across all our businesses, I hand over to Martin to discuss the financial results in detail.

Thank you, Michael. As Michael mentioned, we are very pleased with our strong results in Q3 of fiscal year 2026, running from January to March 2026, despite headwinds from the Iran conflict. We again achieved a positive adjusted EBITDA margin at +0.9% in the quarter. This is a significant improvement from the -3.2% in the previous year Q3. Despite our focus on improving profitability with deliberately accepting lower sales at that Mr. P and YOOX, we were able for the whole group to keep net sales stable in the quarter. The first nine months of the fiscal year, net sales grew by +1.6% on constant currency. I will detail the second performance a little later, but already want to highlight our continued success at Mytheresa.

There, we again outgrew our peers in the quarter with +9.9% net sales growth at constant currency, taking significant market share and boosting Mytheresa's adjusted EBITDA profitability by +50% compared to the previous year quarter. In addition to our continued success in strengthening our target customer relationships at all store brands, we also see that the cost initiatives in our transformation plan are working effectively. SG&A costs in Q3 are down -12% or -EUR 15.9 million compared to the previous year period, including capitalized IT costs in previous year. Compared to previous Q2, just three months ago, they're down -8.6%. In line with simplifying our group structure and focusing our transformation efforts, we have successfully closed the sale of THE OUTNET end of April.

We continue to diligently execute our transformation plan fully in line with our expectations and confirm our medium-term targets of EUR 4 billion in net sales and an adjusted EBITDA margin of 7%-9%. I will speak later to our expectations for the full fiscal year 2026 ending in June 2026. I will first review LuxExperience performance at group level and then walk you through the performance of our three business segments, Luxury Mytheresa, Luxury NET-A-PORTER, MR PORTER, and Off Price business of YOOX in more detail. In this call, I will focus top line development on net sales. Our GMV numbers follow a similar pattern and are, as always, fully disclosed in our press release and quarterly report. Unless otherwise stated, all numbers refer to euro.

In Q3 of fiscal year 2026 and at group level, we kept net sales stable in relation to Q3 of previous year and despite deliberate focus on more profitable customer segments at NET-A-PORTER, Mr P and YOOX, and despite headwinds from the Iran conflict. In the first nine months of this fiscal year, net sales grew by +1.6% at constant currency. On a reported level, net sales in the quarter declined by -5.2% given the wide euro-US dollar FX movements since last year. For the full fiscal year, we continue to expect reported GMV at around EUR 2.6 billion and net sales at around EUR 2.5 billion. Our SG&A transformation initiatives are clearly visible also at group level. With significantly decreasing our SG&A expenses and despite lower reported top line, our SG&A cost ratio improved again in this quarter.

Compared to the preceding Q1 and Q2 of fiscal year 2026, the SG&A cost ratio decreased 360 basis points from 21.9% in fiscal Q1 and 19.1% in fiscal Q2 to now 18.3% in Q3 fiscal year 2026. In Q3 of fiscal year 2026, the adjusted EBITDA margin on group level was positive at +0.9%, significantly improving from the -3.2% in previous year Q3. This is the second consecutive quarter with positive adjusted EBITDA profitability. Due to the phasing effects between Q3 and Q4, we expect Q4 of the fiscal year to also be around Q3 levels of adjusted EBITDA profitability. For the full fiscal year 2026, we expect to break even on adjusted EBITDA, fully in line with our guidance of -1% to +1%.

In the first nine months of this fiscal year, operating cash flow was at -EUR 117.9 million. We expect that the operating cash burn for the full fiscal year 2026 will stay below this level. This is significantly better than our guidance of a -EUR 150 million maximum operating cash burn. As a reminder, we are executing our transformation plan on a fully funded basis with total cash outflow during all years of the transformation plan to range between -EUR 350 million-EUR 450 million. We expect to break even on an operating cash level in around two years. The group ended Q3 of fiscal year 2026 with cash and cash financial investments of EUR 436.1 million. Together with our revolving credit facilities, our total available funds are at EUR 612.8 million.

We are in an ideal situation to operate the fully funded transformation and our growing business model completely debt-free. Let's now review the performance of our Mytheresa business. During the third quarter of fiscal year 2026, net sales grew by +9.9% on a constant currency basis to EUR 256.0 million compared to the prior year period. In the first nine months of the fiscal year, net sales grew by +12%. On reported numbers, net sales grew by +5.6% in the quarter and +8.7% in the first nine months. We continue to significantly take share in an overall soft market and with headwinds from the Iran conflict. For the full fiscal year and on reported numbers, we expect Mytheresa to grow net sales by a high single-digit number.

In Q3, Mytheresa's gross margin increased by 240 basis points to 47.1% as compared to 44.8% in the prior year period. We were able to again significantly increase the gross profit margin with our continued focus on full price sale. This continued success on gross margin level is even more impressive as at the same time we are capturing market share with significant top-line growth. In Q3 of the fiscal year and driven by the new U.S. tariff situation, the shipping and payment cost ratio was up 250 basis points compared to Q3 of fiscal year 2025. As we pay all duties for our U.S. customers, the cost increase for us is reflected in our shipping and payment cost ratio. We are carefully monitoring and managing duty rate changes in the U.S.

In Q3 of fiscal year 2026, the marketing cost ratio decreased by 40 basis points from 10.1% in Q3 of fiscal year 2025 to 9.7%. This is mostly due to a phasing effect between fiscal Q3 and upcoming fiscal Q4. We therefore expect the marketing cost ratio in Q4 to be higher due to promotion marketing costs shifting into Q4. The selling general administrative, SG&A, cost ratio decreased by 80 basis points to 12.2% compared to the prior year quarter due to continuous cost leverage. The low and manageable SG&A cost ratio at Mytheresa has proven effective for the resilience of our business model. The focus of our transformation plan is to implement this resilience also at NET-A-PORTER and YOOX.

Subsequently, the adjusted EBITDA margin at Mytheresa expanded 160 basis points during the quarter to 5.5% as compared to 3.9% in the prior year period. In absolute terms, adjusted EBITDA grew by +50% to EUR 14.1 million versus the prior year quarter. For the first nine months of our fiscal year, the adjusted EBITDA margin significantly improved 190 basis points from 4.3% to 6.1%. In absolute terms, adjusted EBITDA grew by +56.6% to EUR 44.5 million in the first nine months of the fiscal year. Due to the phasing of some costs items from Q3 into Q4, we expect Q4 to have a similar overall profitability margin of Mytheresa compared to Q3. We are continuing our effective inventory management with inventory levels at Mytheresa up only 3.1% compared to previous year despite continuous strong top-line growth.

Let me now comment on the luxury NET-A-PORTER and MR PORTER segment in more detail. In the third quarter of our fiscal year 2026, net sales declined by 5.1% constant currency basis to EUR 231.6 million. In the first nine months of the fiscal year, net sales declined by 1.6%. This is a strong sequential improvement versus the same period in fiscal year 2025. On a reported basis, net sales decreased by -11.7% in the quarter. The top line decline was a deliberate action to focus on higher value customers and to reduce the promotion intensity compared to the previous year quarter. This is visible in the 700 basis points increase in the gross profit margin.

The gross profit margin in Q3 of fiscal year 2026 increased to 48.5% from 41.6% due to a higher full price share and reduced discounting activities as compared to prior year. In the first nine months of the fiscal year, the gross profit margin increased by 250 basis points to 47.3%. With growth in fiscal Q4, we expect NET-A-PORTER to have net sales decline by only a mid-single digit for the full fiscal year 2026. Our focus of our transformation plan remains on bringing down the SG&A expenses. SG&A expenses in the quarter decreased by EUR -5.6 million or -8.9% compared to previous year. A strong decrease of SG&A expenses as well compared to the preceding quarter, which was fiscal Q2. SG&A expenses went down by EUR 9 million or -13.7%.

In the first nine months of the fiscal year, SG&A cost savings amount to EUR 18.0 million or -8.8% of the cost base. All these comparisons include capitalized IT expenses in the previous year for better transparency on the true cost base. With re-embarking on top-line growth in the coming quarters, the SG&A cost ratio is expected to improve even further. The 23.4% SG&A cost ratio in this quarter compares to the 12.2% of 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 re-platforming, Corporate overhead cost savings and re-embarking on top line growth. Warehouse closures are executed and delivery models are being adjusted.

Studio and customer care operations have already been consolidated. The unified data platform is fully productive and the overall IT re-platforming is being executed according to plan. The layoff programs in all jurisdictions are now fully concluded, but full effects to be visible in Q4 of fiscal year 2026. In sum, our comprehensive turnaround plan until fiscal year 2028 is being executed diligently and fully in line with our expectations. With a significant improvement in the gross profit margin, the NetMr.P segment again almost broke even in this quarter with an adjusted EBITDA margin at -0.5%. Therefore, also on bottom line, a significant sequential improvement from the -2.5% adjusted EBITDA margin in the first six months of the fiscal year. Inventory levels at NetMr.P are slightly up, +2.8% to previous year.

Going forward, we will continue to enable top-line growth at NetMr.P with adequate working capital. 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 unprofitable marketplace model, and implementing a lean operating model supported by a simplified off-price tech environment. Continuing the path of a more comprehensive restructuring effort at YOOX and with focus on the profitable customer cohorts, net sales declined -7.4% on a constant currency basis in Q3 year-over-year to EUR 130.7 million. On reported numbers, net sales declined by -11.4%. This is a sequential improvement to -12.1% in the first half of the fiscal year. Same as in the NetMr.P segment.

The focus on the healthy core customer is visible in improvements in the gross profit margin. In Q3 of the fiscal year, the gross profit margin at YOOX increased by 620 basis points to 37.5%. In the first nine months of the fiscal year, the gross profit margin increased by 250 basis points to 38.9% from 36.4% in the prior year period. The operational focus of YOOX is on a fulfillment model that is profitable, creating a lean business model that's specifically tailored to the lower gross margin and lower AOV nature of the off-price business of YOOX. In addition to lower duties and therefore reduced shipping payment costs, a 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 22.0% of GMV, down from 26.9% in the previous quarter and 29.5% from Q1 of the fiscal year, and despite significant euro top line. With this, the SG&A cost ratio in this quarter showed an improvement of 490 basis points compared to the previous two, and 750 basis points improvement compared to Q1 of the fiscal year. On an absolute level, SG&A expenses in Q3 of fiscal year 2026 decreased by EUR 10.3 million or -26.4% compared to previous year Q3. In the first nine months of the fiscal year, SG&A expenses decreased by -EUR 17.9 million or -15.5%. All these comparisons include capitalized IT expenses in the previous year for better transparency on the true cost base.

These cost savings were achieved despite the stranded costs from the separation of THE OUTNET. We are significantly streamlining 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. With a focus on healthy European targeted growth, the SG&A cost ratio will continue to decrease to the targeted levels. During the third quarter of fiscal year 2026, the adjusted EBITDA margin improved from -17.3% in Q3 of fiscal year 2025 to -5.5% in Q3 of fiscal year 2026. The -5.5% in this Q3 was also sequential improvement from the -10.9% of the first six months of fiscal year 2026, despite deliberate top-line contraction.

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 2027. Inventory levels at YOOX are -11% to previous year. In fiscal year 2026, which will end next month in June, we are seeing exceptional growth at Mytheresa, gaining market share with significantly improved profitability. NetMr.P is expected to break even in the second half of this fiscal year and is re-embarking on top-line growth as of Q4 of this fiscal year. NetMr.P and YOOX are reporting improved gross profit margins and continuously improving SG&A expenses. Therefore, on group level and for the full fiscal year, we continue to expect reported GMV at around EUR 2.6 billion and net sales at around EUR 2.5 billion.

On the bottom line, we expect to break even on adjusted EBITDA, fully in line with our guidance of -1% to +1%. Same as last year, we will communicate our fiscal year 2027 guidance in our Q4 earnings call. In line with the visible success of our transformation plan, our trajectory towards our medium-term targets remain unchanged. We confirm our medium-term targets with EUR 4 billion net sales at an adjusted EBITDA profitability of plus 7%-9% and the return to 10%-15% annual growth rates. We will continue our track record of diligently executing our plans and delivering what we target. With this, I'll hand over to Michael for his concluding remarks.

Thank you, Martin. We are very pleased with our third quarter fiscal year 2026 earnings results. The third quarter came in fully in line with our expectations for the full fiscal year 2026 for the group. LuxExperience B.V. has delivered strong results and is fully on track with its transformation plan targets for NET-A-PORTER, MR PORTER and YOOX. Mytheresa continues to deliver profitable growth above industry standards, proving the strength and consistency of its business model. At LuxExperience B.V., we possess the secret sauce in digital luxury, creating a community for luxury enthusiasts around the globe. As a group, we are 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 will continue to generate significant value for our customers, brand partners, and shareholders as we reach our medium-term targets. with that, I ask the operator to open the line for your questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Oliver Chen with TD Cowen. Your line is open. Please go ahead.

Hi, Michael and Martin. Regarding revenue growth and what you're seeing, I would love your thoughts on the markets and the regions, Asia, U.S., and Europe, in terms of key trends and also if there was upside or downside. Overall revenues were a bit lower than the Street, so your thoughts there as well as interplay with some of your comments on duties, and then there's a lot of geopolitical events happening, obviously. Follow-up question, Martin. Operating cash burn better than you expected. It sounds like you're making a lot of outsized progress on the SG&A side, but what led to that? As we look forward to EBITDA margins in the mid to high single-digit range longer term, what are your thoughts given that you're making so much progress?

It sounds like the fixed cost leverage is a big opportunity as you work towards the 7%-9% adjusted EBITDA margins over the years going forward. Thank you.

Thank you, Oliver. Let me take the geographic question, and then Martin can come back to the cash burn and the long-medium-term EBITDA margin expectations. In terms of geography, we see continued strengths in North America, as evidenced by the almost 34% growth of Mytheresa in that region. As mentioned or discussed last time in the quarter, quarterly earnings, Asia has seen sort of the bottom, and then there are little shoots, green shoots of improvements. Therefore we also continue to invest in the region. The Middle East was, particularly the Arabian Peninsula was a very strong region and thus, as highlighted, the outbreak of war in Iran was clearly a headwind in March. We're very pleased to already state and observe that that dip has subsided.

The headwinds have decreased. We are dealing with a very mobile global audience that is able to relocate, and also the global sentiment that had suffered in March is fully back. We see full strength since the beginning of the last quarter, but still it impacted the quarter, the Q3 we just reported on. In Europe, there are some very strong markets, particularly the southern markets in Europe, where we see good influx of money, of a rich population, and that drives, of course, the demand for luxury group product. The strength in Europe, the solid strength in Europe and the buoyant market in the U.S. is really, in terms of geography, driving our business.

As mentioned, the dip in the Middle East seems to have already gone away, looking at the current trading. Martin, you wanna pick up the other two?

Yes, I'm happy to answer that. Hi, Oliver. Operating cash burn in the last nine months, you rightfully call that out, minus EUR 118 million. Obviously, very much on Q3, as guided Q3, typical seasonality, cash out and also paying out most of the severance packages from the transformation plan of the layoff program of the 700 people. As expected in Q4, we expect, you know, a slightly positive cash flow. We clearly guide that the operating cash burn of EUR 118 million will be, you know, significantly lower to the EUR 150 million. Which is great, which is good news, and it just shows our continuous focus on costs. You saw that in the increasing gross profit margin, diligently executing also the cost measures, and we will continue to do so.

There is a continuation of the diligent execution of the transformation plan, which is the core driver of the operating cash burn in this fiscal year, what we estimate to be significantly lower than the originally guided maximum operating cash burn of EUR 150 million. As pointed out, the focus, the continued focus on SG&A expenses and the SG&A cost ratio, highlighted hopefully that significantly in the call, is also the key driver for achieving improvement in the adjusted EBITDA profitability. For as we expect for this, you know, for the full fiscal year to break even, you know, we then, you know, every year, will continue to see increasing adjusted EBITDA margins to 7%-9% in the medium term, significantly driven by an improved SG&A cost ratio.

There is, obviously, one effect is the absolute reduction of SG&A expenses, and, re-embarking on top line growth, which will also help on the SG&A cost ratios improvement.

Thank you. Very helpful. Best regards.

Your next question comes from the line of Anna Glaessgen with B. Riley Securities. Your line is open. Please go ahead.

Hi. Good morning. Thanks for taking my questions. I'd like to follow up on the questions on the impact of Iran and geopolitical headwinds. Was there any one segment that saw more of an impact? If you could unpack if that was related to regional differences in mix or if it speaks to something within the core customer of that group. Thanks.

The most impacted region was, of course, our customers on the Arabic Peninsula being directly affected by warfare. We had a few days of no deliveries, but what is more, and understandably so, people were obviously occupied with different things than shopping. That direct impact has subsided slowly, but still the direct impact on the Arabic Peninsula is still significant. What you always have to consider that our customer base is quite mobile, has multi-residences. We have seen, of course, that customers from the region have moved to other locations. We don't ship into the region, but we still serve these customers in other geographies.

With any of these quite shocking and significant news, there is also global sentiment dip of insecurity. That is, and that has been the fact for all these unfortunate recent geopolitical events. That is often very short-lived and seems to be also short-lived here. We did see a bit of hesitation in Europe, a bit of hesitation in North America after the outbreak of war. Again, fully understandable. We, our hearts and feelings are with all people that are affected by this. Since April, except for the specific region on the Arabic Peninsula, we are fully back on track with strong growth.

Great. Thanks. Then turning back to the GMV per top customer at Mytheresa, I think declined 1.5% in the quarter. Wondering if you could unpack that, should we expect that to return to growth in coming quarters? Thanks.

I mean, you have to really see that in connection with the massive increase of top customers. We really moved a significant cohort into this highest standard of our customer base. As this sort of rejuvenates our top customer with a lot of new entrants, it is just mathematical that the average spend by moving so many new people into that higher status comes down a bit. I mean, it's quite stable and therefore quite remarkable that we move a double-digit higher number into the top customer status and the average only declines slightly. As we then sort of, for better words, digest this massive increase in top customers, we will come back to the pattern that you have seen for many quarters now that the top base continues to spend more each quarter per capita.

Got it. Thank you.

Your next question comes from the line of Blake Anderson with Jefferies. Your line is open. Please go ahead.

Hi. Congrats on the nice results, and thanks for taking my questions. I just wanted to ask one more to start out on the Middle East conflict. Have you seen any impact on the cost side from higher energy or fuel costs that we should be considering, such as shipping or logistics?

I mean, again, the rates and the quantity prices have been quickly fluctuating up and down. Yes, carriers, of course, pass on surcharges that particularly in air freight have been levied. That is a direct measurable impact. Again, all of that with our business model has to be seen in context of, on Mytheresa and on NET-A-PORTER, MR PORTER, of average basket size of EUR 850. The value of the products we ship let us quite rapidly mitigate those surcharges. Medium-term longer effects, we cannot observe, but that was a specific effect as soon as oil and combustion fuels have gone up in price.

Perfect. That's helpful. Then wanted to just drill down on the Mytheresa U.S. business. That continues to be really strong. I know there's some industry maybe tailwinds that you're experiencing there from consolidation. As we think about that 30% plus growth rate, and you're looking out over the next 12 to 18 months, how are you ensuring and planning for growth there and trying to sustain the momentum?

Absolutely. The U.S. market, the U.S. consumer is, and has been for quite some time, a growth engine for Mytheresa, is also growth engine for the group. Martin explicitly stated that marketing cost in the Q4 will actually go up as we invest, as we see opportunities to engage with clients. We're gearing up for a fantastic event in June in L.A. Hopefully the outbreak of wildfires is not risking any of that. We are returning to the Hamptons. We will have a great engagement with On the NET-A-PORTER side, you heard about the One&Only Big Sky event in Montana. We're investing. We know and see and observe there is an audience that is reorientating itself in a retail landscape that is changing quite dramatically, and we wanna capture as many hearts and souls as possible at the moment.

Got it. That's really helpful. Then on the luxury YNAP business, wanted to ask, you talked about pulling back on promotions and trying to have higher full price selling. How much more work to go is there? I know you mentioned that I think top customers are around 10% of total customers. Could you remind us your percentage of sales from top customers and where you're trying to take that over time, and kind of what are the impacts we should see over the next few quarters from that strategic shift?

I mean, the good news is that we started this process last April as we took over the company. Therefore, with Q4, a lot of that sort of promo detox will have been done. That's the good news. We stepped into right away. We fundamentally think it's the wrong approach, and therefore, we immediately start stripping out those promotions and discounts. As highlighted in the call by Martin, the significant increase in gross profit margin in this quarter because we were actually lapping a highly promotional quarter last year, which was effectively the last quarter under previous management. In terms of the share, we absolutely see it as the right target to have the same share of top customer business.

If you look into our investor presentation, top customer share of total customers in terms of size was 9.7 for Mytheresa in that quarter that we just reported on, and 10% for NET-A-PORTER. Sorry, was 9.7 for Mytheresa and 10% for NET-A-PORTER. We are getting there, and the famous 4% making 40% ratio is absolutely something that we aspire to deliver also for NET-A-PORTER, MR PORTER.

That's very helpful. Thanks so much, and best of luck for the rest of the year.

Your next question comes from the line of Wendy Gao with CICC. Your line is open. Please go ahead.

Hi, Michael and Martin. Thanks for taking my questions. As we can see the AOV, I think for all segments are going up, especially for the luxury and Mytheresa segments. Do you believe this is more driven by the increasing shares of top customers, or is it a more structural changes or any other reasons we should look for? Thank you.

Thank you for your question. There are multiple factors as always, and the ones you mentioned are right on. Higher presence of top customers, they buy into the higher price points, into the more valuable products, that's one. We have been quite successful over the last quarters building out our fine jewelry business. That's the fastest growing subcategory on both sides, actually, on NET-A-PORTER, MR PORTER and on Mytheresa. We've added, like just in the quarter we just reported, Messika as a new fine jewelry brand. Of course, adding to the mix pieces around EUR 50,000, EUR 80,000 has an immediate impact on the average AOV. The factors you mentioned contribute, but I just wanted to add that also increasing share of fine jewelry contributes to the ongoing increase in AOV.

Got you. Thank you. It is very helpful.

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

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.