Greetings, and welcome to the Mytheresa Second Quarter of Fiscal Year 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. We ask that you please limit your questions to one and one follow-up. It is now my pleasure to introduce your host, Martin Beer, Mytheresa's Chief Financial Officer. Thank you, sir. Please begin.

Thank you, operator, and welcome, everyone, to Mytheresa's investor conference call for the second quarter of fiscal year 2025. With me today is our CEO, Michael Kliger. Before we begin, we would 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.mytheresa.com. I will now turn the call over to Michael.

Thank you, Martin. I would like to extend a warm welcome to everyone and appreciate you joining our call. Today, we will discuss the results and performance from our second quarter of fiscal year 2025. We are pleased with our results in a still volatile macro environment. Our revenue growth is strong and accelerating, and we have seen a significant improvement in adjusted EBITDA in the second quarter, continuing the positive momentum from the last quarter and marking a substantial step up in financial performance for the first half of fiscal year 2025 compared to the same period last year. We believe there are clear signs of improvement in the overall luxury market, although concerns about the macro environment still exist. We have reaffirmed our leadership position in financial performance and reputation within digital luxury. Our focused strategy on high-spending, wardrobe-building top customers differentiates us and enables us to gain market share and achieve profitable growth. The revenue growth from our top customers, an outstanding average order value, and excellent customer satisfaction scores highlight our commitment to customer focus, which is crucial for Mytheresa's success. We remain very excited about the anticipated acquisition of YNAP, which will allow us to create a global digital luxury platform across various highly regarded storefronts. We expect to realize significant synergies with a combined operation and, most importantly, to present a highly relevant value proposition for global luxury shoppers and brands. We continue to predict that the transaction will close in the first half of calendar year 2025. Today, I would like to emphasize three key messages that showcase what sets us apart in the second quarter and illustrate the ongoing success of Mytheresa amidst the current macro uncertainties. First, our unique business model concentrating on affluent, wardrobe-building luxury shoppers indicates that we are on track for robust profitable growth in the full fiscal year 2025. Second, we have again demonstrated that Mytheresa fosters a community for true luxury enthusiasts, creating desirability through both digital and physical experiences, making us an attractive partner for luxury brands. Third, we are well-positioned and ready to establish a leading global digital luxury group with substantial reach and relevance through the expected acquisition of YNAP. Let me elaborate on these three messages in more detail. In the second quarter, we again showcased our unique capability to generate profitable growth based on our distinctive business model focused on high-spending customers. In Q2 of fiscal year 2025, our GMV increased by 11.9% compared to Q2 fiscal year 2024, and we achieved strong net sales growth of 13.4% in this same period. We are on track to meet our projections for the full fiscal year 2025. The United States continues to be a major growth driver, with double-digit net sales growth of 17.6% in Q2 of fiscal year 2025 compared to the previous year’s second quarter, accounting for 20.6% of our total net sales during this time. Our carefully curated selection of true luxury brands resonates very well with U.S. luxury shoppers who desire multi-brand inspiration, and we see the U.S. market as a significant source of future growth. In Europe, we also saw strong double-digit net sales growth of 12.8% in the second quarter compared to the same period last year. However, results in China and Asia are still affected by ongoing macro headwinds and uncertainties. Our clear focus on high-spending wardrobe-building customers fundamentally drives our continuing success. Our GMV from top customers grew by 9.1% compared to Q2 of fiscal year 2024, primarily due to an increase in average GMV per top customer by 13.6%. In the United States, our GMV from top customers surged by 34.7% in the second quarter of fiscal year 2025. Martin will provide details on our bottom-line results shortly, but I want to share some key operational highlights already. Our customer satisfaction, measured by our internal Net Promoter Score, reached an impressive 83.3% in Q2 of fiscal year 2025, showcasing the excellence of our customer service. Our average order value over the past 12 months increased by 9.5% to €736 in Q2 of fiscal year 2025, further demonstrating our success in selling high-end luxury products to top customers. Additionally, we reported stable return rates and improving cost ratios in this quarter. These operational highlights emphasize the strengths and consistent performance of our business model. The second quarter clearly illustrated that Mytheresa builds a community for true luxury enthusiasts and enhances desirability through digital and physical experiences, making us a highly attractive partner for luxury brands. The quarter featured numerous impactful campaigns and exclusive product launches that drove our global business with high-spending wardrobe-building customers. We unveiled exclusive womenswear and menswear runway looks from Moncler Grenoble, along with exclusive bags and accessories from the Eva Suna Fujita Collection. We launched an exclusive womenswear capsule collection by Victoria Beckham, only available at Mytheresa, and we were the exclusive launch partner for the womenswear Miu Ski collection as well as the pre-launch for Khaite's Resort 2025 Collection and Alaïa’s Archetypes Collection. Additionally, we introduced an exclusive menswear evening wear collection from Loro Piana. For more details on our brand collaborations from the second quarter, please refer to our investor presentation. Another recent and notable collaboration is the launch of Bvlgari fine jewelry and watches on Mytheresa, which enhances our luxury jewelry assortment. This partnership reaffirms our commitment to high-spending top customers. Along with enhancing visibility for our offerings through exclusive digital campaigns and product launches, we also hosted many events and physical experiences for top customers, some of which were truly unique experiences. We strive to engage with our top customers globally to build solid, enduring relationships. In the second quarter, we organized various events for top customers, including style suites in New York, Singapore, Toronto, and Miami, as well as a multi-day style suite event at the Nature Discovery Park on the rooftop of K11 Musea in Hong Kong. Other events included an intimate cocktail gathering in Jeddah, a dinner in Abu Dhabi, and a unique Parisian experience with Berluti in Paris featuring a private tour of Berluti's renowned shoe atelier. We also hosted an elegant reception and dinner with The Attico in Milan, as well as a dinner with Oscar de la Renta at Casa Lever in New York, where designers Fernando Garcia and Laura Kim were in attendance. Following that, we had an intimate cocktail and dinner with Victoria Beckham in New York to celebrate the launch of the third exclusive Victoria Beckham x Mytheresa capsule collection. We arranged several fine jewelry events, including a cocktail at L'Ermitage Beverly Hills and an exclusive event with the fine jewelry brand YEPREM in New York. Please refer to our investor presentation for more information on our exclusive events from the second quarter. The absolute highlights for our top customers were remarkable exclusive experiences we created for them. In our effort to foster a luxury enthusiast community, we invited guests to an unforgettable mountain experience with Zegna. Amid the scenic Biella Alps and delightful Milanese culinary treats, guests were welcomed to Oasi Zegna, where they learned about Zegna's history and craftsmanship through a private tour of their facilities. This experience included a lunch inspired by family recipes of the Zegna family at the founder's villa and concluded with a dinner in Milan attended by Artistic Director Alessandro Sartori. Another highlight was an exclusive multi-day Nordic Winter experience with Moncler Grenoble in Oslo featuring a cocktail reception and dinner at the Oslo Opera House, followed by engaging snow activities at Ski Moore Park ski resort the next day. In the United States, we've just announced a collaboration with Bemelmans Bar for an exclusive invite-only pop-up in Aspen, creating a luxurious après-ski experience that combines high-fashion and Bemelmans’ signature martinis from February 14th to March 2nd. Beyond providing our top customers with unforgettable experiences, these events also enhanced global brand awareness for Mytheresa through media and social media engagement. Third, we see ourselves well-equipped to build a leading global digital luxury group with significant reach and relevance through the anticipated acquisition of YOOX NET-A-PORTER. We will encompass some of the most esteemed digital store brands globally. Mytheresa, NET-A-PORTER, MR PORTER, YOOX, and the OUTNET have all established strong reputations in the luxury sector for their innovative leadership, respected editorial voice, and high-quality customer service. Each brand within our group represents distinct yet complementary offerings for luxury customers worldwide. We are committed to further strengthening and developing these store brands and their identities while optimizing synergies in our operations. We anticipate closing the transaction in the first half of 2025, marking the beginning of an exciting new chapter for our company. We have chosen to form the new group under the brand name LuxExperience, which will replace MYT Netherlands Parent B.V. as well as our group name upon closing. This new name underscores our commitment to creating desirability for luxury enthusiasts through digital and physical experiences. LuxExperience will symbolize our focus on strong customer engagement, curated offerings, and inspiring experiences. Of course, we will continue to serve our customers under our beloved Mytheresa brand, which will remain listed on the New York Stock Exchange under the new trade name LuxExperience and the ticker symbol LUXE, replacing the existing MYTE ticker. LuxExperience will present an exciting opportunity for global investors to engage in the vast market potential of digital multi-brand luxury retail. We also recently announced the nomination of Burkhart Grund, Chief Financial Officer of Richemont, as a new member of our Supervisory Board. Following the completion of the transaction, we will welcome Richemont, a prominent player in the luxury industry, as a major shareholder in Mytheresa. Under the signed agreement, Richemont has the option to nominate a board member, which will increase the board's size from seven to eight. We are thrilled that Burkhart Grund, a highly qualified expert in luxury goods finance, has been nominated to join the Board after closing. The Board will continue to maintain a majority of independent directors in compliance with NYSE and Dutch Corporate Governance standards. Both the current board composition and the nomination of Burkhart Grund will be subject to shareholder approval at an extraordinary General Meeting on March 6, contingent upon the completion of the YNAP acquisition. Given all this, it is no surprise that we are very pleased with our performance in the second quarter of fiscal year 2025. We believe our strong financial results highlight the resilience and consistency of our business model, driving profitable growth. We are very well-positioned and ready for the expected acquisition of YNAP, which will unlock even greater opportunities for profitable growth and create significant value for our shareholders. All of these factors, along with our results from the first half of fiscal year 2025, bolster our confidence in our medium-term growth trajectory and profitability goals. Now, I will turn the floor over to Martin to provide a detailed analysis of our financial results.

Thank you, Michael. As mentioned, we continue to successfully work towards the closing of our acquisition of the YOOX Net-A-Porter Group expected in the first half of 2025 and we are truly excited for this next chapter of growth with establishing LuxExperience, a clear global leader in online multi-brand luxury. We will provide a more in-depth view on the performance and our plans for the future after closing. I will therefore focus this call on the financial highlights of our second quarter and the first half of fiscal year 2025 ended December 31, 2024. We are very pleased with our results in the second quarter of fiscal year 2025 double-digit net sales growth of 13.4%. Our average order value in the last 12 months increased by 9.5%, an improvement in the gross profit margin of 110 basis points, and a strong adjusted EBITDA margin of 7.3%, an increase of 350 basis points versus last year. Even with our strong top-line growth, inventory levels decreased by 1.3% year-over-year with a DIO of 258 days right at the target level. We will continue our track record of profitable growth, leveraging our global presence, increasing acquisition of true top luxury customers worldwide and ever-increasing support from the strongest luxury brands. I will now review the financial results for the second quarter and first half of fiscal year 2025 ended December 31, 2024 in more detail and give additional input on certain key developments affecting our performance. Unless otherwise stated, all numbers refer to euro. From September through December 2024, net sales grew by €26.4 million or 13.4%. In the first six months of the fiscal year, net sales grew by 10.6% to €424.7 million. We saw an increase in GMV for all customers of 6.3% in the second quarter of fiscal year 2025 and even more impressive, the GMV per top customer increased by 13.6% during the quarter. With that, GMV increased by €26 million or 11.9% to €244.7 million as compared to €218.7 million in the prior year quarter. In the first six months, GMV grew by 9.2% to €461.2 million. With an increase of €64 per order, our average order value in the last 12 months now stands at an outstanding €736 as compared to €672 in the prior year period, a 9.5% increase. Our increase in AOV improves not only our unit economics but also manifests our successful focus on full price selling at the very high end of true luxury. We are outpacing our competitors and thus continuously capture market share. In Q2 of fiscal year 2025, we grew our business in the U.S. by 17.6%. Our net sales share in the U.S. now stands at 20.6% driven by an increase in GMV coming from our top customers of 34.7%. Our core market Europe also grew by 12.8% in net sales and we are strengthening our market positions worldwide. In the second quarter of fiscal year 2025, gross profit increased by 16% to €113.6 million as compared to €97.9 million in the prior year period. The gross profit margin increased by 110 basis points to 50.9%. In the first half of fiscal year 2025, the gross profit margin increased by 140 basis points from 46.2% to 47.6%. We continue to focus on increasing our share of full price sales and remain cautiously optimistic that we will be able to successfully continue to do so. The adjusted shipping and payment cost ratio decreased by 90 basis points during the quarter, now standing at 13.8% as compared to 14.7% in the prior year period. The improvement mainly stems from our high-quality customer focus, resulting in higher AOVs and stable return rates. In the first half of fiscal year 2025, the adjusted shipping and payment cost ratio decreased by 60 basis points to 13.7% from 14.3% in the prior year period. In the second quarter of fiscal year 2025, the marketing cost ratio increased by 160 basis points from 10.7% to now 12.3%. We stay focused on acquiring high potential customers and retaining our top customers. With returning to these normal levels of marketing costs, we are able to position Mytheresa even more successfully to capture market share as the market continues to pick up. During the six months ended December 31, 2024, the marketing cost ratio as a percentage of GMV increased by 70 basis points to now 11.9% as compared to 11.2% in the prior year period. The adjusted selling, general and administrative, SG&A cost ratio decreased by 160 basis points to 13.9% during the second quarter of fiscal year in line with our preceding quarters of around 14% of GMV. On an absolute basis, adjusted SG&A expenses remained stable at €33.9 million. In the first six months fiscal year 2025, the adjusted SG&A cost ratio decreased by 110 basis points to 13.9%. We capitalize on cost leverage to optimize our operational efficiencies as we scale. We remain committed to continuously decrease our SG&A cost ratio. In the second quarter of fiscal year 2025, adjusted EBITDA increased by €8.7 million to €16.2 million. The adjusted EBITDA margin increased by 350 basis points to 7.3% as compared to 3.8% in the prior year quarter. The increase is mainly driven by our gross profit margin improvement and further efficiencies in all cost lines, despite investments in our market position. For the first half of fiscal year 2025, adjusted EBITDA was at €19.1 million with an adjusted EBITDA margin of 4.5%, increasing by 280 basis points. Depreciation and amortization remained fairly stable in the second quarter of fiscal year 2025 with €3.9 million as compared to €3.8 million in the prior year quarter. As a percentage of GMV, depreciation and amortization decreased from 1.8% to now 1.6%. Our profitable growth and the strength of our business model were also visible on adjusted operating income and adjusted net income level. In the second quarter of fiscal year 2025, adjusted operating income was at a margin of 5.5%, just slightly below the 7.3% adjusted EBITDA margin. This has been and is a continuous highlight of the Mytheresa business model. Adjusted net income in the second quarter was €10.6 million or 4.8% of net sales. Let's take a look at the cash flow statement. In the second quarter of fiscal year 2025, operating cash flow used only €6.0 million as we're coming back to normalized levels of working capital. We are fully on track with managing our inventory levels. Our inventory stood at €404.6 million, decreasing by 1.3% year-over-year, even with our top line growth. As of December 31, 2024, we had a DIO of 258 days, which is right at our long-term target of around 260 days inventory outstanding. Cash flow from investing used up €0.4 million in the second quarter and €1.7 million in the first six months of the fiscal year. With this, CapEx was significantly below 1% of GMV, another highlight of our business model. We ended the six-month period with €13.8 million cash at hand. The excellent performance of the quarter is fully in line with our expectations. Given the seasonality in the business, you always need to look at the first half and the second half of the fiscal year, combining fiscal Q1 and Q2 and combining fiscal Q3 and Q4. For the first half of fiscal year 2025, net sales grew 10.6% and GMV grew 9.2%. The adjusted EBITDA margin was at 4.5%. We therefore confirm our guidance for the full fiscal year 2025 ending June 30, 2025 with GMV and net sales growth between 7% and 13% and an adjusted EBITDA margin between 3% and 5%. In line with our seasonality, we expect typically weaker fiscal Q3 comparable with fiscal Q1 and a typically strong fiscal Q4. With all the above, it comes as no surprise that we’re very confident in the success of our unique positioning and business model and we will continue our clear focus on strong and profitable growth. We are also truly excited for the medium and long-term outlook of our business as we embark on the next chapter of growth with the expected closing of the acquisition of the YOOX Net-a-Porter Group in H1 of calendar year 2025. Forming the new group LuxExperience, we aim to fortify our clear market leadership position in global multi-brand luxury that drives strong profitable growth and thereby creates significant value for our shareholders and all stakeholders in Mytheresa and the YOOX Net-A-Porter Group. And with that I will now turn the call back over to Michael for his concluding remarks.

Thank you, Martin. We are very pleased with our second quarter of fiscal year 2025 earnings results. We are even more pleased to see ourselves well positioned to achieve our fiscal year 2025 guided targets based on the first half of fiscal year 2025. We continue to focus on creating a community for true luxury enthusiasts worldwide and desirability through digital and physical experiences. We see ourselves well prepared for the expected acquisition in YNAP and are excited to create significant value for our high-end customers, brand partners, and shareholders. And with that I ask the operator to open the line for your questions.

Our first question will come from Oliver Chen with TD Cowen. Please go ahead.

Hi. Thank you very much. Exciting with the deal. As you think about getting ready for the deal, what are your thoughts on the technology stack and what you’re doing just to optimize the integration opportunity? Also as we look forward to that, any other thoughts on the YOOX side of the business in terms of restoring better profitability there? And then a follow-up on guidance, would love color on gross margins in the second half and how you’re viewing those. It sounds like inventory is in really good shape. Thank you.

Thank you, Oliver. Let me address the first two questions and then Martin will speak about the guidance. As we are before closing, we of course are not in a position to have full operational insights, but we explained clearly in our investor presentation on the announcement of the deal agreement that the clear strategy is to bring the luxury businesses of YOOX Net-A-Porter onto the Mytheresa platform in the sense of our only own developed technology. That is clearly the best solution. We have a platform that works. It’s fully owned by us, fully operated by us. We know it inside out. We have a strong engineering bench to do that. Clearly such a re-platforming exercise will require 24 months to 36 months. That is an expected duration and is quite achievable based on our experience of our own re-platforming. We strongly believe that with a joint back office and a separated back office for the off-price businesses, we do and provide the best and most efficient solutions for all those banners that join our group. And then on the banner side, we see opportunity to make them even stronger. Even though the brand equity of NET-A-PORTER and MR PORTER, YOOX outlet are quite strong. But we will invest to make them even more desirable and to be fully in line with the principles of LuxExperience, which is customer focused curation and inspiration. So, we're really excited about this and are hopeful to close the deal in the next couple of months. And then Martin, maybe you take up the margin question.

Yes, happy to do so. Guidance and gross profit margin development. Exactly. As you rightfully focus on how is the quarter performance changing the overall guidance and how it is relating to the guidance. The performance in Q2 is fully in line with our expectations and it is always given the seasonality you have to look at always the first and the second half. So Q2 and Q4 are very strong quarters. Q1 and Q3 given seasonality are weaker quarters. And that's why looking at the performance of H1 and as you rightfully point out, Oliver, the improvement in the gross profit margin of 140 basis points in Q2 it was 110 basis points. We expect a similar performance for H2 to what we saw in H1. So therefore the 140 basis points. I'm not sure whether due to the lapsing of some effects everybody should expect for H2, but we don't want to come back to decreasing gross profit margins. We want to continue and that is clearly visible in our numbers on our focus on full price, on a very strong full price share, on targeting the right set of customers. And this is fully in line with our guidance. So also expect an H2, a stable, slightly increasing gross profit margin and the overall H2 to be very comparable with H1.

Thank you. Best regards.

And we'll take our next question from the line of Matt Boss with JPMorgan. Please go ahead.

Thanks, and congrats on a nice quarter. So, Michael, could you speak to the current health of the digital luxury backdrop today maybe relative to the last two years in terms of what you're seeing and just elaborate on the acceleration demand that you saw across the U.S. and Europe in the second quarter. And has the momentum continued post-holiday?

Sure. Thank you, Matt. I think the digital sector is in good health if you regard it from the consumer perspective. The expansion of the digital share in luxury is continuing. Of course, there are sort of polarizations out there. It's absolutely true for the big spenders. We continue to see they spend more and more with us, spend more and more on digital, and there's this geographic polarization. We have seen continuous improvement in the U.S. post-election, really strong demand and we are very happy with our European business, almost 13% growth. So, we have now a second strong lag in the business and is of course, also very strong business in the Arabic Peninsula. While Asia, particularly greater China, still lags behind, still the demand is still dampened by the economic outlook. So, we would say the health is very good. We have really seen a turnout of the heavy discounting that we saw last year. The slowdown, as discussed before, has really surprised many players leading to high inventory levels and it’s not only us, Martin clearly highlighted. We are actually slightly below last year’s inventory, despite revenue growth. But the digestion of inventory or oversupply of inventory has happened across the board. So while we only see small green shoots in some places, the health of the industry is dramatically better than 12 months ago. And we, in our numbers for sure, have seen a pivot now for some quarters and therefore our outlook is positive, not negating that the macro environment is still quite volatile.

Great. And then Martin, maybe relative to 3% to 5% EBITDA margins this year, help us to think about the timeline you see as reasonable for a return to historical high single-digit EBITDA margins.

Yes. Happy to do so, Matt. I mean, obviously, we – in the first half of the fiscal year, we had an EBITDA margin of 4.5%. And for the second half, I mean, for the full fiscal year, we guide to 3% to 5%. Given the uncertainties in the industry, the shifts that I mean nobody really can foresee how 2025 and 2026 will unfold. But it is clear that we embarked on a trend on the gross margin side and this is the key driver for our overall profitability. So we clearly expect in the medium term to come back to higher single-digit margins that we used to have a couple of years ago.

Great. Best of luck.

Our next question will come from Ashley Helgans with Jefferies. Please go ahead.

Hi, it’s Blake on for Ashley. Thanks for taking our question. Wanted to start with, it sounds like your high-end luxury consumer is obviously really strong. Can you talk at all about the trends of the more aspirational customer throughout the quarter?

Sure. Happy to do so. What we have seen, and it continues that the U.S. consumer is really leading the way and we have really seen strong growth in the U.S. market for some quarters, at least Mytheresa that is. And now we have also seen double-digit growth in Europe, which is quite nice to see, even though of course also in Europe, there are markets that grow even stronger and some markets are lagging. This is starting to be also driven by aspirational customers, also starting to be driven by better sales in accessories and bags, which are the categories that are driven by or at least driven more by aspirational customers. This is by no means where we were in 2022, but as you rightly say our strong driver of growth driver is the better part of the customer cohorts. And here we continue to see also in this quarter, double-digit revenue increase per capita. These are the drivers that make Mytheresa so successful in a still volatile environment. But we – and I will repeat, we see a pivot in the market. If you exclude Greater China, then we clearly see a pivot in the market.

That’s encouraging. And then wanted to ask two more if I could. One was on the marketing ratio. It seemed to be up – you seemed to lean into marketing spend a bit more in Q2. How should we think about that rate for the second half on marketing? And then touching again on the top customers, I think they did decline slightly year-over-year versus being positive recently. How are you thinking about managing the growth of AOV versus top customers in that trade-off?

Very happy to answer and you’re right and you picked up correctly on our presentation. I’ll leave it to Martin for the outlook of marketing spend. But actually the two questions are connected. We have, as you heard from Martin, increased our marketing spend significantly over the quarter last year. And what we are doing now, we are investing in growth with upper funnel investments. Of course, in 2023, as the market was more difficult and as we managed costs very tightly to achieve still good financial results, we focused a lot on the marketing spend, on the lower immediately returning investments. But now that we see the opportunity to grab market share and as the market is picking up, we're also investing more on the upper funnel, which does not give you immediate new customers, which does not drive immediate pickup in revenue, but it sets and lays the ground for future cohort acquisition because for new customers it takes a while and actually it's not immediate conversion. And that's what you see and what you rightly picked up, a small decrease in the base even though the quality is amazing with double-digit revenue growth per capita is actually a consequence of lower longer term operating marketing spend a year ago. So it's good news. We are back. We're investing in marketing and this lays the foundation for more customer growth and also expansion of the top customer cohort. So nice pickup and Martin maybe you give an outlook in that sense.

Yes. Yes. And with that what Michael said we expect also for H2 a comeback to the normal levels of the marketing cost ratio that we always had around 12% and 12.5%.

Great. Thank you so much and best of luck for the second half.

We'll take our next question from Grace Osadolor with Morgan Stanley. Please go ahead.

Hi. Thank you for taking my question and congratulations on the results. I wanted to ask on what you're seeing around price points. You've had a lot of evidence of more premium brands doing better than luxury in the industry. So any color there that you can call out and also in terms of what you're seeing from luxury prices being pulled through if you're seeing more entry price for items in the industry? Thank you.

Thank you. Honestly, in our business the emergence of more entry price points I cannot confirm. The business is driven by big spenders is driven by high-priced items. What I can confirm is however that we clearly are in the moment of pause of hold on any further price increases. So in that sense, we have come out of a phase where a lot of price increases happened and arguably some of them were too far or too high. The market overall I think is looking at opportunities to bring back the aspirational customer as just discussed. We do believe that well-priced entry price level or of course in the context of true luxury is one element of that strategy. But in our business, the growth that you have seen and as demonstrated by the average order value, which in turn is driven really by the average item value, the 9.5% increase, our growth is not driven by business that is tilting towards premium or entry price points.

We'll take our next question from Oliver Chen with TD Cowen. Please go ahead.

Hey, Michael, Martin thanks a lot. U.S. you've had really great momentum and you continue to have. What are your thoughts in terms of what's fueling that and also service levels and distribution centers? And question, longer term, our thesis is for physical meets digital and bricks meets clicks. What do you think about the future of how you'll evaluate physical distribution as well more broadly?

Well, I mean, on the second part, I agree, we agree that physical presence is key. I mean, we believe we need to form strong customer relationships and we are. We need to present digital but physical experiences as well. And for the moment, this clearly means physical pop-ups, physical presentations of our brand of what we do. As of this weekend, we will be present physically in Aspen with an Après-Ski experience together with our friends from Bemelmans Bar from New York. First time you can experience Bemelmans Bar outside of The Carlyle in New York. So that we totally agree with and it's no coincidence that we name our overall group LuxExperience, therefore physical incarnations, so to speak. The key for our success we believe at least is our customer focus really understanding what it is that our customer wants. Introducing products that they desire, be it kids, life. And now a clear focus on fine jewelry and really establishing relationships with a customer clientele that is very careful with its time. So, you need occasional moments to really strengthen and form relationships. And otherwise, time is and speed is still one of the key components of excellent service in e-commerce and we are working hard on this. Our new distribution center in Leipzig has again made it possible to be faster. We always said down on the roadmap if we achieve critical mass in certain geographies. We also believe that regional distribution centers can play a role in making time a real USP. And obviously with the expected acquisitions, there are more opportunities to start doing this.

We'll take our final question from the line of Wendy Gao with CICC. Please go ahead.

Okay. So hello Martin and Michael and congratulations to the nice results. I think, I have a question about the top customer profile by region. Like can you share any something about the – maybe the mix about the top customer profile and also the relevant average order value?

I mean we have shared in the past that top customers in numbers account for close to 4% and make up close to 40% of revenue. And that mix is actually quite similar across geographies. So, this holds true for Europe, for the Americas and for Asia and Greater China. What is true is that the average order values particular in Greater China, particular in Asia, also in the Arabic peninsula, tend to be higher. So, we are getting there more to four digits and above. Whereas across the other geographies it is three digits and the average is €736. So, there is even higher appetite for some of the more expensive items, fine jewelry in the Arabic Peninsula, higher priced accessories in Asia, Southeast Asia, and Greater China. But the percentage and the importance also driven by our focus of top customers is the same across all geographies. And the desire to have the latest European luxury available in those regions is also the same in terms of which brands are popular. We always share that. If you look at the top 30 brands, they're very similar. Maybe the sequence is different across geographies, but the top 30 brands are very similar across the whole world for us.

Understood, thank you. And if we just talk about Greater China, you mentioned that this region is still impacted by maybe the macro-environment or something else. But if you look at like quarter-by-quarter, how do you think of the swings do you think like the tariffs were like recover a bit?

Yes, you're absolutely right. It's still dampened. But we do also for this region see continuous improvement, particularly in Greater China. As we see that the business is improving slowly after, of course, quite significant contraction. We do believe it has a lot to do with the macroeconomic environment, and therefore, it is quite interesting and important to see what additional economic stimulus and economic programs the government will launch in China. But at the moment, we do see a slow recovery already.

That will conclude our question-and-answer session in our call today. Thank you all for joining. And you may now disconnect.