Operator
Greetings, and welcome to the Lux Experience 4th Quarter and Full Fiscal Year 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. Today's call is being recorded and 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 Lux Experience. Thank you, sir. Please begin.
Thank you, Operator, and welcome everyone to the Lux Experience Investor Conference Call for the fourth quarter and full fiscal year 2026, ended June 30, 2026. With me today is our CEO, Michael Klieger. Before we begin, we'd like to remind you that our discussions today will include forward-looking statements, any comments we make about expectations, including our guidance for fiscal year 2027, and our medium-term targets are forward-looking statements and are subject to risks and uncertainties, including risks and uncertainties described in our annual report. Many factors could cause actual results to differ materially, and we honor no duty to update forward-looking statements. In addition, we will refer to certain financial measures not reported in accordance with IFS on this call. You can find reconciliations of these non-IRFS financial measures in our earnings press release, which is available on our investor relations website at investors.laxexperience.com. I will now turn the call over to Michael. Thank you, Marta.
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 fourth quarter of fiscal year 2026 and the full fiscal year for Lux Experience. We are very pleased with our results as they demonstrate that our group transformation is going very well and that we are outperforming the market. At group level, we have delivered on our full fiscal year 26 guidance as we achieved a GMV growth of plus 2.9 percent at constant currency and delivered a positive group adjusted EBTA margin of plus 0.4 percent. We believe these are remarkable results just 15 months after taking over a financially distressed YNAB business. Compared to fiscal year 25 and considering all capitalized tech expenses, we have boosted group adjusted EBTA by 64 million euros. Even more exciting, we achieved in the fourth quarter of fiscal year 26 a GMV growth of plus 7.9% at constant currency and a group-adjusted EBTA margin of plus 2.1%. In the fourth quarter, we had positive top-line growth in all of our three reporting segments. At MyTeresa, we have set again the gold standard in the fourth quarter in terms of growth and profitability. The success is based on outstanding customer economics and a resilient, profitable business model. This is exactly the formula that we now apply to Netta Porter and Mr. Porter. In the fourth quarter, Netta Porter and Mr. Porter combined now also delivered positive growth and profitability. At Ux, our strategy to focus on the healthy core of the business and make the business model leaner is now showing clear results. In the fourth quarter, Ux achieved a positive top-line growth and losses were cut almost in half compared to Q4 of fiscal year 25. With the tremendous progress made in the past 12 months and the strong business momentum in Q4 of fiscal year 26, we are clearly on track to achieve our medium-term targets of group net sales of Euro 4 billion and an adjusted EBTA margin of 7 to 9%. For full fiscal year 27, we expect accelerated top-line growth and further increased group adjusted EBTA margin. Our strong current trading reinforces our continued positive business momentum. Martin will later clarify our guidance for fiscal year 2027. Let me now comment in more detail on the performance of the MyTeresa business. We again outperformed the industry with double-digit top-line growth and strong profitability. By focusing on wardrobe building, big spending customers, MyTeresa possesses a very resilient and consistent business model driven by superior customer economics. A clear strategic focus and the excellent execution allowed MyTeresa to become a 1 billion euro business in fiscal year 26 marking a significant milestone in the company's success story in q4 fiscal year 2026 my theresa grew its net sales by plus 10.2 percent on constant currency basis compared to q4 fiscal year 2025 and for the full fiscal year 2026 by 11.5 percent on constant currency basis compared to full fiscal year 2025. In the United States, the MyTeresa business grew net sales by plus 39.3% on constant currency basis in Q4 fiscal year 26 compared to Q4 fiscal year 25. For the full fiscal year, the U.S. accounted for 23.8% of net sales of MyTeresa's total business. Maite Reza's strengths and resilience are driven by its superior customer in our economics. In the fourth quarter of fiscal year 26, the number of top customers at Maite Reza grew by plus 18% compared to the prior year period. Furthermore, the average spend per top customer in terms of GMV grew by plus 4.8% in Q4 fiscal year 26 versus q4 fiscal year 25 and plus 4.3 percent for the full fiscal year 26. the average order value last 12 months for mytheresa increased by a remarkable plus 13.1 percent to a record high of 875 euro in q4 fiscal year 26. the success of the focus on selling full price high-end luxury products to top customers is also evident by the fact that top customers accounted for 4.8 percent of all customers in numbers but for 48.4 percent in terms of total gmv in fiscal year 26. the continued focus on selling full price also drove again the gross profit margin increase of plus 150 basis points in q4 fiscal year 26 compared to q4 fiscal year 25. lastly my theresa's excellent customer service proposition is highlighted by our internal net promoter score nps of 83.6 percent in q4 fiscal year 26. all these figures demonstrate the fundamental strength and continued success of the Maite Reza business based on superior customer economics. The success with big spending, wardrobe-building customers also makes Maite Reza a highly desired partner for the world's most prestigious luxury brands. In the fourth quarter of his year 26, Maite Reza launched 11 exclusive capsules collections and featured four exclusive pre-launches or exclusive styles campaigns in collaboration with luxury brands such as Dolce & Gabbana, Pucci, Prada, Bottega Veneta, and Brioni, amongst many others. We're also very proud to have recently started digital partnerships with two new true luxury brands, Fendi and Piaget, which are now available on MyTheresa. Please see our investor presentation for more details on brand collaborations. The fourth quarter of 2026, MyTheresa also hosted more than 14 global top customer events and six exclusive money can't buy events with luxury brands including Zimmerman, Dolce Gabbana and Brioni across Europe, the United States and Asia creating a strong sense of community for its top customers. My Teresa also returned with a second edition of Maison My Teresa creating a successful yacht experience along the French Riviera hosting 29 events in 12 days, which hosted 790 customers on the boat. Please see our investor presentation for more details on these unique money-can-buy experiences. To sum it up, MyTeresa reaffirmed its clear leadership position in the digital multi-brand luxury landscape in fiscal year 2026. My Teresa sets the standard by delivering profitable growth based on its focus on big spending top customers. It thus also serves as the internal blueprint for the successful turnaround of Net-A-Porter and Mr. Porter. Martin will later show how the strong top-line results of My Teresa translated into excellent bottom-line results. Let me now comment on the luxury segment comprised of Net-a-Porter and Mr. Porter. We are in high gear re-establishing both as leading digital multi-brand destinations for luxury fashion shoppers seeking editorial inspiration and brand discovery. By applying the secret sauce of Lux experience, namely an obsessive focus on best customers, full price selling, and cost discipline, we are successfully rebuilding strength and resilience in their business models. For the first time since the acquisition, Net-a-Porter and Mr. Porter combined achieved top-line growth and a positive bottom line in the last quarter of fiscal year 2026. Net sales increased by plus 5.6% on constant currency basis in Q4 fiscal year 26 versus Q4 fiscal 25, and for the full fiscal year 2026 by plus 0.5% compared to full fiscal year 2025 for Net Apporte and Mr. Porter combined. In the United States, net sales increased by plus 15.1% on a constant currency basis in Q4 fiscal year 26, compared to Q4 fiscal year 25. For the full fiscal year, the United States accounted for 49.6% of net sales of the total business of both stores combined. Improved and strong customer economics are also key for the success of Not-a-Porter and Mr. Porter. The fourth quarter of fiscal year 26, after an initial focus on the quality of the customer base in the first quarters, we increased again the number of top customers by plus 3.2% compared to Q3 fiscal year 26. Moreover, the average spend in terms of GMV per top customer increased by plus 9.4% in Q4 Fiscal Year 26 versus Q4 Fiscal Year 25 and plus 5.3% for the full Fiscal Year 26. The average order value last 12 months increased by plus 9.1% to 885 euros for Net-a-Porter and Mr. Porter combined in Q4 fiscal year 26. As a consequence of the renewed focus on the best customers at Net-a-Porter and Mr. Polter, their top customers accounted for 4.3% of all customers in numbers, but for 49.1% in terms of total GMV in fiscal year 26. The clear focus on full price selling to top customers instead of promotional discounting drove also a gross profit margin increase of plus 170 basis points in full fiscal year 26 compared to fiscal year 25. The customer satisfaction net-apporte measured by our internal NPS remained at 59.7% in Q4 due to shipping backlogs in the warehouses, but for the full fiscal year 26, the NPS increased by plus 6.7% compared to fiscal year 25. All these KPIs confirm a significantly improved quality of the customer economics and business models of Net-a-Porter and Mr. Porter. In line with their position as the leading digital multi-brand destinations for luxury fashion shoppers seeking editorial inspiration and brand discovery, Netaporte and Mr. Porter launched in the fourth quarter of his year 26, 36 editorial campaigns for exclusive brand and product launches with brands such as Chloé, Kate, Carolina Herrera, Tom Ford, Brunello Cuccinelli, and Celine, amongst others. Netaporte also hosted 11 unique experiences for their EIPs, the so-called Extremely Important People, with brand partners such as Kate, Chloe, Gucci, and Scapparelli in the United States and Europe in Q4. Netaporte also continued to boost its editorial strengths with exclusive Porta cover stories that generated a reach of 194 million in Q4 fiscal year 26. Please see our investor presentation for more details on the unique editorial content and exclusive activations of NetAported. Mr. Porter hosted six unique EIP experiences with brand partners including Zegna and Ralph Lauren in the United States and Italy. Mr. Porter also continued to strengthen its editorial voice with its journal, pushing brands, advice, and style stories. In total, the top journal stories reached over 13 million views. Please see our investor presentation for more details on Mr. Porter's unique editorial content and exclusive activations. To sum it up, Net-A-Porter and Mr. Porter are re-establishing themselves as leading digital multi-brand destinations for luxury fashion shoppers seeking editorial inspiration and brand discovery. Positive top-line growth, improved custom economics, and positive bottom-line results in the fourth quarter of fiscal year 26 underline the success of the ongoing business transformation. Martin will later provide more details on the bottom-line results of the luxury segment comprised of Net-a-Porter and Mr. Porter. Lastly, let me comment on Uke's business performance. Our strategic focus on the core European markets and a leaner operating model, in line with the lower margin and lower average order value nature of the off-price business, is already showing clear results. Positive top-line growth in the fourth quarter and adjusted EBTA losses almost half speak to the success of the transformation thus far. This business momentum was further enhanced by Uke's brand activations throughout the quarter to reinforce its position as the leading destination for long-lasting luxury fashion built around individual creativity, culture, and community. In Q4 fiscal year 26, net sales for Ux increased by plus 6.6% on constant currency basis versus Q4 fiscal year 25. And for the full fiscal year 26, net sales contracted by minus 5.8% compared to full fiscal year 2025. The net sales growth in Q4 was also driven by extraordinary inventory clients. but most important was that in Europe, excluding the UK, Ux increased net sales by plus 22.7% compared to Q4 fiscal year 25. For the full fiscal year 26, net sales in Europe, excluding the UK, grew by plus 10.9% and accounted for 61.3% of net sales of the total Ux business. The strong momentum in the European markets validates the strategy to focus on a healthy and more profitable core of the business. Besides the overall net sales increase for ULTS in Q4 fiscal year 26, the average spend per top spending customer in terms of GMV grew by plus 12.3%. The average order value last 12 months decreased by minus 3.5% to 243 euro in Q4 fiscal year 26. However, this was also driven by the reduced focus on the high AOV overseas markets. In Europe, excluding the UK, the AOV last 12 months increased by plus 2.1% in Q4 fiscal year 26. The gross profit margin decreased in Q4 fiscal year 26, driven by the mentioned de-stocking push. For the full fiscal year 26, the gross profit margin grew by plus 120 basis points to 38.5%, driven by a much more demand-driven pricing system, increasing the share of first-price sales. Uke's customer satisfaction measured by our internal NPS reached 49.1% in Q4 fiscal year 26, increasing by 1,520 basis points compared to Q4 fiscal year 25, showcasing also the effect of the Lux Experience secret sauce on Uke's customer service operations. All the above KPIs demonstrate that the strategic focus on the healthy core is resulting in much improved customer economics. In the fourth quarter of 50-year 26, youth leveraged its 26th anniversary to drive brand engagement, consideration, and new customer acquisitions through flagship community events in Milan and Forte de Mami. The corresponding social media campaigns generated over 30 million estimated reach, almost 550,000 campaign page visits, and nearly 1,000 new customer registrations. These initiatives successfully leveraged a brand milestone into measurable commercial and brand performance, reinforcing Uke's evolution into a culturally relevant lifestyle brand. Please see our investor presentation for more details on these events and activations. To sum it up, The focus on a healthy core for Ux and a lean operating model as part of our transformation plan is already showing great results. We are successfully rebuilding the position of Ux as the leading destination for long-lasting luxury fashion built around individual creativity, culture, and community. Martin will speak shortly to the tremendous improvements we made to the bottom line of Ux and FISP Year 26. And now, after having reviewed the very strong commercial results and business improvements across all three reporting segments, I head over to Martin to discuss the financial results in more detail.
Thank you, Michael. In this call, I will focus the top-line development on net sales and constant currency. But before I will provide you with more details on LuxExperience group and individual segment performance, let me summarize the financial highlights looking back into the full Fiscal Year 26 and Fiscal Q4 ended June 30, 2026. We have delivered on our full year guidance on top and bottom line. With one year into our transformation, we're already breaking even on adjusted EBITDA for the full year, have no bank debt in our balance sheet, and 442 million euro cash and cash investments, better than expected. In fiscal year 26, we achieved significant cost savings in SG&A of around 55 million euro, or minus 9.9%. The last three months of the fiscal year, running from April to June, stood as an inflection point in our overall transformation. Net sales in the quarter grew by plus 7.6% at Lux Experience, the highest in any quarter of this fiscal year. In fiscal Q4, we decreased our SG&A cost ratio by 400 basis points from 21.6% to 17.6% versus prior year Q4. Adjusted EBITDA margin for Lexexperience stood at a positive plus 2.1%, the third consecutive quarter with positive and increasing adjusted EBITDA. These strong luck experience numbers are based on impressive performance at all segments. Mitresa, again, with double-digit net sales growth in the quarter at plus 10.2% and further strong increase of adjusted EBITDA by plus 10.9% in the quarter compared to previous inflection point at net mr p reporting plus 5.6 net sales growth for the first time and also achieving positive adjusted ebitda profitability in the quarter use as well and for the first time re-embarking on net sales growth with plus 6.6 percent in the quarter in addition impressive profitability improvement at Ux with a 920 basis points increase in adjusted EBITDA versus Q4 of fiscal year 25. SG&A expenses at Ux decreased by minus 20% versus the previous year quarter. And now, as usual, I will first review in more detail Lux experience performance at total segments view, and then walk you through our three business segments, Luxury Mitresa, Luxury Net-of-O-T, and Mr. Porter, and the off-price business of Ux. As mentioned before in this call, I will focus top-line development on net sales in constant currency. Our GMV numbers follow a similar pattern and are, as always, fully disclosed in our press release, investor presentation, and annual report in addition all numbers in previous year include capitalized i.t expenses for a true like-for-like comparison we discontinued this practice for the acquisition unless otherwise stated all numbers refer to euro like experience grew net sales by plus 7.6 percent in fiscal q4 this was the strongest quarter year-over-year growth in the fiscal year In Fiscal Q4, we achieved a positive adjusted EBITDA margin of plus 2.1%, marking our third consecutive quarter with positive adjusted EBITDA profitability. The success is also visible in the strong sequential adjusted EBITDA margin improvement, looking at the six-month period to reduce the seasonality effect. Fiscal H2 adjusted EBITDA margin improved by 220 basis points compared to fiscal H1. For the full fiscal year 26, and in line with our expectations, our adjusted EBITDA margin returned to positive territory, improving 260 basis points to 0.4% compared to the prior year. And please remember, this turnaround comes after years of XYNAB with a persistent lack of profitability, with a peak of a negative minus 175 million EBITDA in their fiscal year 24. As you know, one key driver of improved profitability is our focus on SG&A cost savings. In Q4, lax experience SG&A cost ratio improved significantly by 400 basis points to 17.6% compared to 21.6% in the prior year quarter. If you look in the course of fiscal year 26 and on a quarter by quarter basis, the SG&A cost ratio dropped in total by 430 basis points from 21.9% in Q1 to 19.1% in Q2, further improving to 18.3% in Q3 to now 17.6% in Q4, fiscal year 26. In the full fiscal year 26, SG&A expenses went down by 55 million or minus 9.9% of the cost base. In the fourth quarter of fiscal year, we generated a positive operating cash flow of plus 9 million euros. Operating cash burn in the full fiscal year was at minus 108 million, significantly better than the minus 120 million maximum operating cash burn communicated previously. As mentioned before, the group ended the fiscal year with a continued strong balance sheet and no bank debt, holding cash and cash investments of $442 million. Noteworthy is that we have Citibank join our existing strategic banking partners Unicredit, J.P. Morgan, and Commerzbank for our long-term value creation setup with that our banking rcf also increased by 25 million to now 125 million despite strong top line growth inventory on group level only increased by plus 3.7 compared to the end of the last fiscal year we are pleased to share that on september 3rd management received the authorization for a share repurchase program of our ADRs which may be executed through an accelerated share repurchase program and at management's discretion based on market conditions. We have not implemented the repurchase program as of now and there's no guarantee that we may do so. Let me now review the performance of our Mitresa business. We have seen continued strong net sales growth on all comps. During the fourth quarter of fiscal year 26, net sales grew by plus 10.2% to 269.2 million compared to the prior year period. For the full year, net sales grew by plus 11.5% to 994.3 million. We continue to significantly take market share. In Q4, mytresource gross profit margin increased by 150 basis points to 49.7% compared to 48.3% in Q4 fiscal year 25. For the full fiscal year, mytresource gross profit margin increased by 150 basis points to 48.5%. We were able to again significantly improve the gross profit margin driven by our successful focus on full price. Delivering a continuous gross profit margin increase while at the same time taking market share with double-digit top-line growth is a testament to the strength of our positioning. Subsequently, the adjusted EBITDA margin at Mitresa expanded 20 basis points during the quarter to 6.6% as compared to 6.5% in the prior period. For the full fiscal year, the adjusted EBITDA margin significantly improved by 140 basis points from 4.9% to 6.3%. On absolute terms, adjusted EBITDA grew by plus 39.8% to a record 62.3 million in the full fiscal year. At Mitresa, IEPA tariff refunds in Q4 had an insignificant effect of 50 basis points in the adjusted EBITDA margin. In sum, and looking at the Mitresa business model, we have successfully coped with various tariff situations in the past quarters and years and expect to do so in the future. From fiscal year 24 to fiscal year 26, we were able to increase the adjusted EBITDA margin by 320 basis points. We are continuing our effective inventory management with inventory levels at MyTeresa up only plus 3.9%, despite continuous double-digit top-line growth. In fiscal year 26, my Teresa had a positive operating cash flow of around plus 20 million. Being able to achieve strong operating cash flow, even with double-digit top-line growth, highlights the reliability and resilience of our business model. Let me now comment on the luxury Net-a-Porter and Mr. Porter segment in more detail. In the fourth quarter, Net-a-Porter and Mr. Porter delivered a clear turnaround across both top and bottom line, driven by strong execution of our new leadership teams and the success of our transformation plan. During the fourth quarter of fiscal year 26, net sales increased by plus 5.6% to 273.9 million compared to prior year period. For the full fiscal year net sales grew by 0.5% to 994.8 million. This stands as an inflection point as the NADMISTP segment had experienced continued strong revenue decline in preceding years and in preceding quarters. As we accepted, revenue decline was stronger focus on higher quality customer cohorts. It is reassuring to now report top-line growth on the basis of a much stronger customer file. In addition, our commitment to full price selling drove a strong cross-profit margin increase of 160 basis points to 48.3 percent in the second half of fiscal year 26 compared to the first half, while the cross-profit margin decline in the quarter was driven by previous year effects. For the full fiscal year 26, the gross profit margin increased as well by 170 basis points from 45.9% in fiscal year 25 to 47.5% in fiscal 26. Lowering our cost base remains the central pillar of our transformation and our SG&A cost improvements showed acceleration throughout fiscal year 26. For Q4, our SG&A cost ratio improved 500 basis points year over year from 24.5% to 19.5%. The SG&A cost ratio in the second half of fiscal year 26 improved by 350 basis points versus the first half of the fiscal year. In absolute terms, already in the first year of our transformation at the net Mr. P segment, we achieved 29.8 million euro SG&A cost savings versus fiscal year 25 or minus 11% of the cost base. In fiscal Q4, the 19.5% cost ratio at was still 700 basis points higher than at Maitresa and thus still leaves significant opportunity for further cost savings, especially in tech and operations. On the bottom line, we're very proud to report that this is our first quarter in fiscal year 26, achieving positive adjusted EBITDA at NAPSTP, coming in at a 2.7% margin. This milestone marks a significant step forward, representing an expansion of 230 basis points compared to Q4 of last year. With this H2 of fiscal year 26 was also already positive on adjusted EBITDA level at a plus 1.2% margin versus minus 2.5 percent in fiscal H1. At NAP Mr. P, IEPA tariff refunds had a positive effect of 250 basis points in the adjusted EBITDA margin in the quarter. The effect is stronger than at Mitresa given the operational setup of NAP Mr. P with a warehouse in the U.S. and a higher U.S. revenue share. Even if you take out the IEPA tariff refund effect, fiscal Q4 would still be positive at NatMrP. The NatMrP operational setup is fully capable of dealing with various tariff situations and is expected to continue to do so. Inventory levels at NatMrP are slightly up plus 5.5 percent to previous year and going forward we will continue to enable top-line growth at NAPS2P with adequate working capital. Before reviewing Yuke's financial performance I want to note that following the successful sale of the outlet at the end of April we also concluded our transition services agreement with the buyer at the end of July, 2026. Concluding this final step in the divestment allows us to fully concentrate our resources on driving our core off-price business at Ux. In line with our transformation plan, at Ux, we're focusing on the healthy core of the business, deprioritizing overseas markets with high cost to serve and implementing a lean operating model supported by a simplified off-price tech environment. As Michael mentioned, and similar to NetMrP, we achieved top-line growth at Ux already in the fourth quarter. Net sales for quarter came in at 110.5 million representing growth of plus 6.6 percent. A key focus of our transformation is on implementing a highly efficient operational structure tailored to the lower AOV and slightly lower gross margin nature of the off-priced business. Our SG&A cost ratio in H2 of fiscal year 26 compared to H2 of the previous year improves significantly by 560 basis points from 29.4% to 23.8%. This equals to 17.5 million absolute cost savings or minus 23.3 percent of the cost base the acceleration is also visible throughout fiscal year 26 as the h1 sgla cost ratio was at 28.1 percent 430 basis points higher than an h2 of fiscal year 26 at 23.8 percent. On the back of these SGLA cost savings, adjusted EBITDA improved significantly in fiscal year 26. The Q4 adjusted EBITDA margin in fiscal year 26 was at minus 10.5 percent versus minus 19.8 percent in the previous year. This represents a 920 basis points margin improvement. The acceleration during fiscal year 26 is also visible in comparing the minus 7.8 percent margin in fiscal H2 with minus 10.9 percent in fiscal H1, a 310 basis points margin improvement from H1 to H2 of fiscal year 26. Inventory levels at Ux were stable at plus 0.3 percent versus previous year. Let's look ahead to fiscal year 27, which has already started in July 26. We are very proud of the significant progress achieved in fiscal year 26, which will have a full year effect in fiscal year 27 on top to additional measures already defined. Supported by our transformation activities in fiscal year 26, net sales showed an increase of plus 3.2% With the top-line success of Q4 and our visibility into Q1 of Fiscal Year 27, we expect to grow mid to high single digit at group level for Fiscal Year 27 in total. On bottom line, in fiscal year 26, we achieved a breakeven for the full year and a plus 1.7% adjusted EBITDA margin in H2 of fiscal year 26. For fiscal year 27, we expect the adjusted EBITDA margin at around 2 to 3%. To give you some broader commercial context on the business, I would I also like to provide indications for our three segments. At Mitresa, for fiscal year 27, on top line, we expect continued high single-digit to low double-digit growth and adjusted EBITDA profitability slightly better than in full fiscal year 26. At NAP, Mr. P, continued growth, top-line, mid-single-digit, and around 100 to 200 basis points adjusted EBITDA margin improvement compared to full fiscal year 26, not compared to Q4. At UTS, we expect mid-single-digit top-line growth with the adjusted EBITDA margin remaining negative in the mid-single-digit range. We expect to reach adjusted EBITDA break-even at Ux in fiscal year 28. Given the seasonality of our business, the strong fiscal Q4 performance for the group should not be expected throughout fiscal year 27. Fiscal Q1 and Q3 usually have a lower performance and Fiscal Q2 and Q4 have a stronger performance than the average. For the current Fiscal Q1, which runs from July to September 26th, we are very pleased with the performance. Therefore, on group level, we expect high single-digit net sales goal and a just slightly negative adjusted EBITDA margin, which is a strong improvement to prior year's adjusted EBITDA margin. So we expect a significantly improved Q1 performance. Beyond fiscal year 27, we expect, on top line, a 10% to 15% CAGR in the next years. On bottom line, and in the years after fiscal year 27, we expect an annual 150 to 250 basis points increase in adjusted EBITDA profitability until we reach 7% to 9% adjusted EBITDA margin medium term at 4 billion net sales. We have a strong cash position today and anticipate the remaining transformation in the next two years to absorb another 150 to 250 million total cash burn. We therefore expect to have a significant cash buffer during and after the transformation of a minimum of around 200 to 300 million euros without adding any cash utilization of our RCFs. On September 3rd, management received the authorization for share repurchase program of our ADRs, which may be executed through accelerated share repurchases and at management's discretion, based on market conditions. We have not implemented the REPERCH program as of now and there is no guarantee that we may do so. In summary, we are at an inflection point for Lux experience. After the first year of our transformation, we are already breaking even on an adjusted EBITDA. All segments are set for further growth in Fiscal Year 27 to take significant market share and in total a 2% to 3% adjusted EBITDA margin. We expect to grow even stronger with further improving industry sentiment. The turnaround of XYNAP is bearing fruit with significant sequential and accelerating SG&A cost savings and adjusted EBITDA improvements. We have a significant cash buffer to weather any further macro uncertainties. We are committed to 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.
Lux Experience is the one and only digital destination for luxury enthusiasts worldwide. The strength of our businesses is based on resilient business models and superior custom economics. The results of Q4 Fiscal Year 26 underline this and show the tremendous progress we have achieved in our transformation plan in just the last 12 months. We have delivered on our fiscal year guidance. My Teresa again performed best in class in the sector. Neta Porter and Mr. Porter achieved a clear turnaround. and Ux is in high gear to achieve the same. We have proven that at Lux Experience we possess the secret sauce in digital luxury. You just heard from Martin for Fisk Year 27. We now expect a further acceleration of top-line growth and even healthier profitability. As a group, we are well positioned to benefit from the sustained growth of digital luxury and the improvements in the global luxury sector. We expect to continue to generate enormous value for our customers, brand partners, and shareholders. And with that, I ask the operator to open the line for your questions.
Operator
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 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. And 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 Cowan. Oliver, your line is open. Please go ahead.
Especially in the US, very impressive. Regarding the guidance and the modeling, what should we know about gross margin relative to SG&A and how are you seeing merchandise margins evolving for next year in terms of promotional levels and what may happen for gross margin. Michael, it'd also be helpful to brief us a bit on what you're seeing regionally between all the momentum and share gains in the U.S. relative to Europe and any distinctions you'd want to make there because there's many different crosswinds happening globally. And finally, on ERP platform migration, where are you with that? You've made a lot of progress, But we'd love any milestones we should pay attention to. And the use repositioning seems quite compelling. But as we look ahead, it sounds like you're looking for the negative mid-single-digit range still. But we'd love puts and takes on profitability there, given the repositioning underway. Thanks a lot.
Okay. let me take on the geography and ERP questions Oliver and then Martin takes on the margin and use profitability so geography wise I mean as stated the US is at the moment the fastest growing digital luxury market the gross rates we deliver for us clearly indicate we are taking market share because this is even better than what we see and hear from others in the US market the US consumer is really willing to spend particularly at the very high end that we focus on europe continues to be a good market but europe is polarized regionally but also probably more polarized by uh by the different segments we see real pockets of strengths where wealth has agglomerated be it italy be it spain portugal greece there's a lot of influx of of new money bad europe is also a great success case for ux is to us no surprise because at the same time we see in some markets really sluggish demand for luxury products be it france germany and i mean domestic not tourism demand but here the polarization is of course also helping us on the other end of the their portfolio spectrum with use success Middle East the demand has come back Arabic Peninsula the amount demand has come back but of course there's still weekly monthly swings to the positive or to the negative and also a lot of the demand of our customers in the last month happened abroad so we will see how much the domestic demand of those clients that we continue to serve 12 months around will pick up as we move now back to the region September October November and and lastly China greater China we believed at the beginning of the year we will see the bottom and it will rapidly improve the summer was disappointing while Southeast Asia still offers opportunities both for Netta Porter mr. Porter for my Teresa the US is the focus that's where our marketing spend pays off nicely for for ux is really the core market Europe 23% growth in the last quarter fantastic for for that business so we're we're we're we're very pleased with that on the ERP side we make continuous progress we will have a big replacement of of of many different elements the HRS system has already been introduced globally in May the ERP system for Netaporter mr. Porter has been upgraded to BC central and is life so we done the switch ERP upgrades can be quite disturbing to business we have done so with very little disturbance to the business so we are running now on BC Central both my Teresa ended the Porter mr. Porter there will be another big system upgrade in autumn on all the buying and merchandising business operations in the reporter mr. Porter and the webshop migration continues to progress very well
we had the very first demo sessions on the app on the website so we are fully in line if not even slightly ahead on the systems upgrades martin yeah happy to take the the margin questions uh or exactly as you say uh the the profitability improvement is coming from top line but also for on on a cost ratio perspective or uh income ratio for on gross profit margin uh where we expect uh continuous further improvement and especially on the sgna cost ratio, especially at that Mr. P and UQS. There are significant improvements and also the top line will obviously help also on the cost ratio to get that closer to the Bytrees benchmark level. UQS especially, I mean, we have in the full Fiscalia 26 reported top line decline minus 8.4 percent um and we guide fiscal 27 to mid single digit decline driven by what michael said refocus on the european geography with continuous focus on the healthy core customer because we are really focusing on uh you know turning use around and increasing significantly increasing profitability um for fiscal year 26 we uh report that uh minus 9.4 percent adjusted ebda margin and for fiscal 27 now with the continuous efforts that we're doing on on especially on sgna then guide to a mid single digit um negative profitability so again almost halving uh the um the losses there. And also, I had earlier communicated that for fiscal year 28, we clearly target and expect the turnaround at Duke's on adjusted EBITDA level.
Operator
Your next question comes from the line of Blake Anderson with Jeffries. Blake, your line is open. Please go ahead.
Thanks for taking my question. So I wanted to start off with the guidance in terms of the mid to high single digit sales growth. Sounds like you guided high single for Q1, so it's off to a stronger start. How should we think about the likelihood that for the full year you reach high single versus slowing down to mid single? Just wondering kind of how you're thinking about the back half.
Are you being prudent or are there puts and takes to think about why the business might slow in Q2 through Q4? the uh blake thanks thanks for the question uh the good the good thing is as we report now and the q1 is is almost finished we obviously have clear visibility in q1 and are very happy with the overall performance uh so um fiscal 26 was strong we enter fiscal 27 with a strong q1 uh which is great and obviously as you know there are multiple factors are not only on seasonality how Q2 and Q4 will play out, our strong quarters, Fiscal Q2 and Q4, and how Fiscal Q3 will turn out as we had a very strong Fiscal Q3 in the last, this is clearly too early to tell. But to guide for the whole group to mid to high single digits, I think is a huge progress that we see, that we saw in Q4. and then now guide for the full fiscal year. And obviously that implies, and we also gave a bit of a color on the segment performance, that all three segments have strong top-line growth. MyTrees, Net-A-Potter, Mr. Porter, and Yukes. So continuing commercial success, and we are really happy and therefore have a strong guidance for fiscal year 27.
Thank you. And as a follow-up, on the MyTeresa AOV growth remains double digits. It seems like that's really driving the business with shipments closer to flat. Can you talk about the drivers of that AOV growth? Anything in terms of like for like price increase, category mix, units per transaction, anything about that, and sustainability of AOV into 2027, that double-digit growth? And then if I could also ask on Ux, Q4 was really strong, led by Europe, as you called out. Curious if there's anything, any more color you can provide on the strength there in that region in Q4. Sure.
Happy to jump in on this. So clearly, high AOV is really helping on unit economics. So we're very happy that we have achieved now 875 at MyTeresa and we already have 885 at Net-A-Porter, Mr. Porter. drivers for this are the growing importance of the top customers top customers per definition and per reality always have a higher basket value they shop higher item value price items so the it's a mix effect that shows for the company if the share of the business was top customer goes up to almost 50% the 1,200, 1,300 AUV baskets of those customers take a bigger weight without significantly changing the items. We do see also another big influence is the increasing expansion of fine jewelry. We have Bulgari on MyTheresa. We launched Piaget on MyTheresa. We have Cartier, Vacheron. uh so we have a really good representation and see increasing appetite for for also fine jewelry in the range of 20 to 80 000 euro per piece so that also drives but fully pays into the focus on top customers on the success in europe there is a polarization and and there is of course the let's call it for better words, middle class luxury spend customer who think twice now how much they spend. There is inflationary pressure. There's energy prices. So we believe having ukes in the portfolio that offers luxury fashion at deeper discounts because they're off season, because they're one year old items. But for people that want to have great brands at those prices, it's great offer and uh the focus on europe is engineered we we have a an aov of 250 to 243 i believe in in in yukes and so it makes much more sense to incur shipping costs for europe for the continent than trying to compete um at this stage in in in in the us or in in japan for big business that that may change in the future but at the moment we focus on the healthy core That's very helpful.
Operator
Your next question comes from the line of Anna Gleskin with Bea Riley. Anna, your line is open. Please go ahead.
Hi, good morning. Thanks for taking my question. I had a few on Netta Porter and Mr. Porter. First, great to see the acceleration XFS in the U.S. from 3.7 to 15.1. do us if you can unpack if there was anything one time in the quarter that we should be aware of and then secondly um in the past you've discussed bringing up the marketing spend to be a parity with the my teresa business now that you've invested more in marketing are you satisfied with this level of marketing spend um there's no one-time effect that drove the really nice top line for letter porter mr porter in the us it's just our marketing gets better our curation gets better we upgraded or completely changed our customer messaging backbone ripped out the
old infrastructure put a new infrastructure uh our storytelling has completely been redone by the teams since of january and all of that resonates and then you took to put on top of it a lot of activations of course also focused on the US customers focused on the on the US markets that's that's the formula and it's not defining the formula it's executing that makes the difference and therefore our guidance that Martin laid out is completely based on continuing exactly on that trajectory so that the last quarter was not a one-time off we will see continued success that the Porter and Mr. Porter, almost 50% of their business is based in the U.S. So that always has been and will be a strong hold. And we just kicked off New York Fashion Week with big campaigns, big events, also by Net-A-Porter in New York. And thus, this is not a one-off. This is a continuation and marketing expense. uh we we are very happy with what we see uh it's a dual effort i mean the marketing cost of netaporte have a higher share of editorial content we launched a porter magazine cover with cindy crawford on that basis we had an event last week with cindy and her friends in new york we launched a porter magazine with serena williams on it and she also attended the event so that's important part of it but then also digital marketing we completely exchange the tools and the more important the algorithms and get better and better now i mean something we have done since 2017 on my teresa so all of that pays off but we have just started there's so much more we can do and it works so we are very happy with the limit with the spending level and if we see more opportunity we will actually spend more.
Operator
Right, this concludes today's call. Thank you for attending. You may now disconnect.
