LONDON — Mytheresa saw gross merchandise value and adjusted net income climb in the fiscal third quarter, but the shock of war in Ukraine, new COVID-19 lockdowns in China, supply chain delays and tough comparisons with last year took their toll on overall growth momentum and adjusted earnings before interest, taxes, depreciation and amortization in the three-month period.
The luxury online retailer said gross merchandise value, or GMV, in the three months to March 31 was up 13.2 percent to 186.6 million euros. The online retailer measures its top-line growth in terms of GMV, which it defines as the total euro value of orders processed, inclusive of merchandise value, shipping and duty.
By comparison, in the previous quarter GMV was up 26.2 percent.
Net sales in the third quarter increased 2.9 percent year-over-year to 169.5 million euros. Mytheresa noted that sales grew slower than GMV due to accounting changes linked to its new Curated Platform Model. It now records the platform fees that brands pay to be on CPM as net sales.
In the second quarter, by comparison, net sales rose 18.3 percent. As soon as those wrinkles are ironed out, Mytheresa said net sales will grow in line with GMV.
Despite the positive outlook, Wall Street focused on the hit from the Ukraine war and China and sent the firm’s shares down 3.4 percent to $10.01 in midday trading. The shares closed down 1.7 percent at $10.21.
Mytheresa said the quarter-over-quarter slowdown in GMV and net sales was also due to the impact of supply chain delays and the unexpected events in Ukraine and China.
Mytheresa chief executive officer Michael Kliger noted that the outbreak of war in Ukraine knocked consumer confidence in Europe, while daily life in China virtually ground to a halt following the COVID-19 lockdowns in certain regions.
Kliger noted that certain spring deliveries had to be shifted from the third quarter to the fourth quarter due to supply chain delays. Mytheresa’s comparisons with last year were also tough, with net sales in the third quarter growing nearly 48 percent year-over-year in 2021.
On Tuesday, Mytheresa said gross profit grew 14.4 percent to 82.8 million euros, while adjusted EBITDA was broadly flat at 10.2 million euros.
Adjusted operating income fell to 8 million euros from 9.1 million euros in the prior-year period, while adjusted net income rose to 5.6 million euros, compared with 4.5 million euros in the prior-year period.
Mytheresa said it was still expecting a “strong full fiscal year” in 2022, but at the low end of the given guidance ranges.
Kliger said the business has shown “excellent strength despite the impact of many external challenges in the third quarter.”
He described the results as “very solid,” noted the continued adjusted EBITDA profitability and said that active customer numbers grew 21.6 percent in the quarter.
Kliger said Mytheresa continues to see robust demand in the U.S., which notched the highest growth in the quarter. He added there was “outsized growth in warmer weather states like Florida and Texas.”
In the U.S., GMV growth in the third quarter was 41.6 percent compared with a year ago.
He said while it was “impossible” to predict the macro-economic environment in the coming months, “the luxury sector has consistently proven to be very resilient. Furthermore, the shift to online in luxury shopping is continuing and driving growth.”
The first weeks of the fourth quarter are looking good, Kliger added.
“They fuel our confidence that Mytheresa remains the partner of choice for luxury designer brands to engage with our high-value multibrand customers. We remain confident in the short and longer-term potential for profitable growth of our business,” he said.
During an analyst call, Kliger said he believes Mytheresa is well-positioned for growth due to robust U.S. demand; the return of holiday, vacation and event shopping, and Mytheresa’s “adaptable business model that produces profitability” even in the teeth of challenging macro-circumstances.
“We are very confident in our business model, and demand continues to come back as the world — hopefully, and permanently — returns to normal,” said Kliger, adding that Mytheresa is in expansion mode, with plans to add luxury lifestyle as a new category this month.
He said the “full-range luxury lifestyle category” was another means of serving the luxury customer and that Mytheresa planned to add some new brands to the mix. Prices will range from 250 euros to 1,500 euros.
In addition to womenswear, Mytheresa already sells men’s and children’s wear, in addition to other categories. Kliger said the site has become a “global leader” in luxury children’s wear, with sales up 21.9 percent so far this year.
For the full fiscal year ending June 30, the company said it expects to achieve its previously disclosed guidance at the low end of the given ranges, with GMV in the range of 755 million euros to 775 million euros, representing 23 to 26 percent growth; net sales of between 700 million euros and 720 million euros, and adjusted EBITDA margin in the range of 9 to 10 percent.
J.P. Morgan said in a report on Tuesday that Mytheresa’s overall GMV growth in the third quarter matched its own projections, and represented a 29 percent, two-year compound annual growth rate.
The bank added that the 29 percent growth rate exceeded expectations despite the “unfavorable shift” in Mytheresa’s spring deliveries from the third to fourth quarter; the negative impact of the war in Ukraine; the loss of the Russian market, which represented about 2 percent of sales; the decline in China due to lockdown, and January’s Omicron wave.
Mytheresa said one highlight of the third quarter was the opening of Mytheresa flagship on JD.com, a move aimed at increasing “brand awareness and trust” with Chinese consumers; the launch of exclusive capsule collections and pre-launches with brands including Loewe, Moncler, Berluti and Manolo Blahnik x Birkenstock.
The site also had a successful beauty pop-up with French, luxury plant-based skin care brand Sisley.
The company said its Curated Platform Model, which allows Mytheresa greater access to brands’ warehouses so that it can deliver and restock items as quickly as possible, remains in growth mode, and said its exclusive resale service, in partnership with Vestiaire Collective, was flourishing.