My Teresa reported on Wednesday that the dismal luxury e-commerce sector posted yet another impressive quarterly growth.
The Munich-based online luxury retailer said net sales rose 18% to 234 million euros ($253 million) in its fiscal year ending in March. It expects full-year net sales to rise 13% to 869 million euros. Adjusted earnings before interest, taxes, depreciation and amortization also nearly tripled to 9 million euros as lower inventory levels reduced the company's reliance on discounting.
Mytheresa's steady sales growth is attributed to the retailer's ability to differentiate its products from competitors. In the third quarter, it released limited-edition capsule collections with Gucci, Bottega Veneta, Loewe and Brunello Cucinelli. The company also focuses on attracting high-spending customers with special events. A recent example was Paris-based brand Courrèges' 24-hour event in Shanghai for its top clients, which included a brand exhibition and a meeting with the brand's creative director, Nicola Di Felice, and a private dinner.
But Mytheresa is notable for more than its steady growth. In April, financial times The company is one of the suitors looking to buy Yoox Net-a-Porter SA, which continues to rack up losses for parent company Richemont. Recent reports also suggest that Myteresa has hired additional bankers to explore taking it private. Women's Wear DailyThis may be part of the company's acquisition strategy. Industry consolidation has already begun, with Farfetch sold to South Korean retail giant Coupang in December and Matches acquired by Frasers Group before being placed into administration in March.
CEO Michael Krieger said: “We feel we are undervalued, so it's clearly up to the management team, and certainly the supervisory board, to find ways to create some value for the business. ” he said. The Business of Fashion“The speculation of going private is not entirely unreasonable; it's something companies sometimes do in situations like this.”
Kriger added: “I cannot confirm any of the rumors.”
Mytheresa is doing better than many of its rivals, but investors are lukewarm about the company. Mytheresa's stock price has risen about 50% this year, but has fallen more than 80% since its initial public offering in January 2021. Shares fell 6% on Wednesday.
“They need to clearly tell the story of a differently positioned business model that is generating profits,” Krieger said. “The numbers again show this is unquestionable, but it's not getting all the attention from investors.”
Other challenges lie ahead: The company has been focusing on its top clients, who typically spend more per purchase, and it cut customer acquisition costs by 2.8% and overall marketing expenses by 10% in the third quarter. But Mytheresa won't be able to escape rising online customer acquisition costs for long, as luxury brands increase investments in direct-to-consumer channels and potentially target the affluent customers that Mytheresa relies on, TD Cowen analysts wrote in an April report.
That's why Mythelesa is waving caution: The e-retailer expects its adjusted EBITDA margins to increase by just around 5% for the fiscal year ending in June.
“The approach MyTheresa has taken has worked better than most, as its unique curation and high service levels have enabled it to stand out as a popular destination while at the same time focusing on serving high-lifetime-value customers and becoming a profitable niche player rather than aiming to be a 'winner-takes-all' brand,” Luca Solca, head of luxury research at Bernstein, said in an email.
Editor's note: This story was updated on May 15, 2024. An earlier version incorrectly stated the company's event in Shanghai was three days long. It was actually a 24-hour event.
