MyTheresa Sees Strong Growth in Q2
Top-spending customers are still driving Mytheresa’s international growth; however, but there are signs that the aspirational US customer is starting to come back. Net sales for Q2, which ended on December 31st, 2023, rose by 8.3% year-on-year, reaching EUR 197 million.
Mytheresa’s positive financial performance is attributed to the retailer doubling down on its business model and focusing on its highest-spending customers who see the multi-brand retailer as a fundamental tool to build their wardrobe rather than a place to shop for a special occasion, which resulted in Mytheresa winning market share in today’s difficult market conditions.
Still, CEO Michael Kliger noted that the holiday period in Q2 indicated the return of aspirational consumers in the US who are usually lured by discounts and perceived good deals. Whilst this signals a wider positive trend, Kilger underscored that their market strategy for next year is to stay the course and to focus on their top customers, noting that “There is no strategic focus on winning back market share from the aspirational customers.”
Gross Merchandise Value (GMV) grew by 5.9% YoY, and reported solid cash flow, a reflection of Mytheresa’s strong inventory management, which has enabled them to pull back on discounting throughout the year.
Despite Mytheresa’s strong financial performance in the last few quarters, their stock is down by 90% since its IPO in 2021, which Kliger blames on the overall market environment rather than on company-specific policies. Full year sales are expected to grow by 8%, gross profit between 8-13%, and adjusted EBITDA margin by 3 to 5%.
MyTheresa stock price
The US market represents 20% of MyTheresa’s business, a YoY growth of 2.3%, and is expected to further grow in the near future. US net sales grew by 17.4% overall, and 47.6% among top customers. American consumers are expected to spend more domestically in 2024 and pulling back on European shopping trips based on their January purchasing behavior.
MyTheresa’s main customers are mostly concentrated in Europe, with a relatively stable market share of 55.7%. Asia, however, is still lagging behind these two markets.
Globally, Mytheresa’s top customers grew by 15.6% this last quarter, and had an average order spend of EUR 672. In fact, Mytheresa’s top 3% customers generated 36% of the retailer’s sales. This small set of customers grew by 28% in the quarter leading up to June 2023, and in terms of GMV, spent 37% more than in the corresponding period in 2022. On average, their order values are more than two times higher those of the average Mytheresa customer.
Two of Mytheresa’s most recent marketing events created to grow brand awareness in the US market included building a “Holiday House”, an immersive physical shopping experience in LA, and the creation of an immersive shopping app for Apple Vision Pro, which the retailer demoed during NYFW.
The retailer’s next quarter strategy will focus on prioritizing marketing, new customer acquisitions, and top-customer retention, which earned them a “HOLD” rating from the six analysts covering the company, whilst UBS rated the stock as “BUY” on their latest report.
Maybe I should be buying Mytheresa stock instead of buying that nice little white dress I saw on their app…
