Greetings, and welcome to the Mytheresa Third Quarter Fiscal 2023 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. 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 Third Quarter of Fiscal Year 2023. 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.nytco.com. I will now turn the call over to Michael.

Thank you, Martin. Also from my side, a very warm welcome to all of you, and thank you for joining our call today. We will today comment on the results and performance of our third quarter of fiscal year 2023. Overall, we are satisfied with our results in the third quarter. Our business has shown once more financial strength and resilience despite significant macro headwind. Mytheresa stepped up its top line growth in the third quarter compared to the preceding second quarter. Gross profit margin was impacted by aggressive industry-wide promotions of competitors, but we remain profitable in contrast to most other players. We stay fully committed to serving the high-end wardrobe-building customer with the finest curated luxury offer, a clear focus on full price selling, and excellence in operations. We believe maintaining this level of integrity is the best approach to weather the transitory challenges in the market and deliver the results for the full fiscal year 2023 as well as protecting the outstanding medium-term prospects of our business based on a superior business model and strategic positioning. Let me summarize the 3 key characteristics of our performance as evidenced in the third quarter of fiscal year 2023, so that you can fully appreciate the strength and resilience of Mytheresa despite significant macro headwind. First, our focus on the high-end wardrobe-building customer and thus also on true luxury brand partners makes us the best positioned platform to benefit from the ongoing growth in luxury and the expected consolidation of platforms. This is clearly supported by our excellent top customer KPIs, our continued success with 'money can't buy' experiences for them and the continued trust-based relationships we have with luxury brand partners. Second, we have built a very resilient and flexible business model that is profitable, even in challenging marketing conditions. We are global, active across many luxury categories, clearly focused on full price selling, and we have a high share of cost variability. Third, we are constantly innovating and laying the foundation for future growth in our business. As evidenced by some major milestones recently achieved that I will describe in more detail later. All of this happens while diligently operating our business. Let me now comment in more detail on those three characteristics. First, let's look at the success with high-end wardrobe-building customers in the third quarter. We grew our gross merchandise value, GMV, by 17.8% compared to Q3 of fiscal year 2022. On a 2-year basis, we grew our GMV by plus 33.4% compared to Q3 of fiscal year 2021. This growth in the third quarter is clearly an exception in the industry. It is driven by the clear focus on the true high-end wardrobe building luxury customers and not the aspirational occasional luxury shopping. In the third quarter of fiscal year 2023, our top customer base grew by plus 28.1% compared to Q3 of fiscal year 2022 and the average spend per top customer grew 6.7%. Overall, the business with top customers grew by 36.8% in terms of GMV compared to Q3 of fiscal year 2022, and our top customers accounted for 36.0% of total GMV. The full number of customers grew by plus 14.4% and the average spend for all customers grew by plus 4.3% in the third quarter of fiscal year 2023. Also, the repurchase rates in Q3 of fiscal year 2023 of customer cohorts acquired in Q1 of fiscal year 2023 compared to Q1 of fiscal year 2022 cohorts were positive again. Please see our investor presentation for more details on the cohort repurchase rate. All the data mentioned shows the strength and quality of our customer base. We engage and serve our high-end customers, we partnered again with many leading luxury brands to create true 'money can't buy' experiences for our top customers. Luxury brands are more and more interested in partnering with us or clienteling activities given the increasing importance of top customers in today's environment. Examples of recent top customers events include a party to celebrate the new design of ETRO during Paris Fashion Week, the private dinner at the Schiaparelli to preview the Fall/Winter collection, and the 2-day experience in Venice including; a gondola tour, the privatization of an iconic ice cream shop, and a dinner in a private palazzo in attendance of Creative Director Sandra Choi. Please see our investor presentation for more details on our recent top customer activations. Our unique ability to excite and engage with true high-end luxury customers and build long-lasting relationships with them provides us with a strong competitive advantage. We have increased our top customer base by plus 120% since Q3 of fiscal year 2022. Our focus on high-end customer engagement is ultimately a key driver for luxury brands to continually partner with us. We partnered once more in the third quarter like no other platform with many leading luxury brands for exclusive capsule launches or pre-launches of collections. Examples for exclusive brand collaborations from the third quarter include an exclusive bag launch with Bottega Veneta, exclusive menswear capsule collections from Loro Piana and Dolce Gabbana only available with Mytheresa. The launch of the exclusive spike collection of Christian Louboutin, several pre-launches from Givenchy giving Mytheresa's customers first access, the exclusive Versace capsule collection only available at Mytheresa, and many more. Please see our investor presentation for more details on brand collaboration. Second, let's look at the resilient and flexible Mytheresa business model. In the third quarter of fiscal year 2023, we successfully continued our global expansion. We experienced high growth in Europe with plus 19.2% compared to Q3 of fiscal year 2022, while results in Mainland China were still impacted by the COVID pandemic. In the United States, which continues to be one of our key growth markets, we achieved again above average GMV growth with plus 27.4% compared to Q3 of fiscal year 2022. The share of the United States of our total GMV increased to 17.7% in the third quarter of fiscal year 2022. We drove this growth with a strong lineup of customer and brand events across the United States. One of many highlights was our physical pop up in Aspen, where we took over the retail space in Hotel Jerome and engaged with over 600 new high net worth individuals during our 3-day presence. We also partnered with regional taste makers in Texas, Arkansas, and North Carolina to engage with approximately 200 new high net worth customers and drove brand aware. Please see our investor presentation for more details on our events in the United States in the third quarter of fiscal year 2023. Our average last 12 months order value increased by plus 3.9% in the third quarter of fiscal year 2023 compared to fiscal year 2022. This is driven by our continued expansion across luxury categories, most recently with the addition of home and lifestyle products. We will continue to expand our offer in terms of luxury categories to grow our share of wallet with top customers continue. The high-cost variability in our business model allowed us to keep cost ratios within our budgeted ranges in Q3 of fiscal year 2023 despite some inflationary pressures. The number of first-time buyers reached over 124,000 in the third quarter of fiscal year 2023, while our customer acquisition cost actually declined by minus 2.4% compared to Q3 of fiscal year 2022. Our ability to decrease the CAC was the result of leveraging new lever performance of META as well as our continued success of applying AI algorithms in our building platform. Customer satisfaction, as measured by our internal Net Promoter Score was 72.1% in Q3 fiscal year 2023. Despite our ongoing focus on full price selling, the gross profit margin came in 320 basis points lower in Q3 of fiscal year 2023 compared to Q3 of fiscal year 2022. This was driven by significant industry-wide promotional aggressiveness of many competitors on both Fall/Winter but even already on Spring/Summer merchandise. We view this as a transitory challenge until the excess inventory has been cleared and we see a strong medium-term advantage of staying fully focused on full price selling forward the best customers. Martin will talk in a few minutes about how all this translated into our bottom-line results for the third quarter of fiscal year 2023. Third, I mentioned above that we achieved major milestones in the third quarter, laying the foundation for future growth. We expect a strong recovery of the Chinese luxury consumer market with a focus on domestic consumption. We launched our China designer program last year to celebrate the best new Chinese luxury fashion designer and to coincide with the recovery. The four designers; Didu, Jacques Wei, Susan Fang, and Xu Zhi were chosen to create distinctive capsule collections exclusively available on Mytheresa. Last month, we celebrated the launch with a high-caliber physical event in Shanghai. The event and accompanying campaign attracted widespread interest by Chinese press and on social media. Main pieces of the capsule collections were sold out quickly. Today, we can also announce the expansion into another luxury category. Through our exclusive partnership with Bucherer, the world's largest luxury watches and jewelry retailer from Switzerland. We will offer certified preowned watches with an international 2-year warranty and full-service package directly from the watch experts of Bucherer. The offer will first be launched in Europe and the most elevated selection of high-end and certified preowned time pieces from about 25 brands including; Audemars Piguet, Breitling, Cartier, IWC Schaffhausen, Jaeger-LeCoultre, and Omega will be on. The continued build-out of our infrastructure is an essential foundation for future growth. In that vein, it is another major milestone to announce today that we have successfully concluded the multiyear project to upgrade our complete e-commerce technology stack. We migrated all our websites, apps, content management system, merchandising, and product information systems to a new service-based and highly scalable platform that will allow us to improve speed, flexibility, personalization, regionalization and cost of development. The transition to the new platform was achieved with minimal disruption of our business. Finally, I'm happy to report that the construction of our new warehouse in Leipzig is making good progress, and we have started the interior building and construction phase. With all the above, it should come as no surprise that we are satisfied with our performance in the third quarter of fiscal year 2023 despite significant macro headwinds. We believe that our results demonstrate the strength and consistency of our business model, delivering profitable growth. We see ourselves as one of the few winners in the expected consolidating luxury e-commerce space. And now I hand over to Martin to discuss the financial results in detail.

Thank you, Michael. I will now evaluate the financial results for the third quarter of fiscal year 2023 mid-March 31, 2023, and will provide additional color on the major factors influencing our performance during the quarter. Unless otherwise stated, all numbers refer to euro. As Michael already indicated, considering the continuously challenging macro headwinds, we are pleased with our plus 17.8% top line growth in the third quarter compared to our preceding Q2 of fiscal year '23 with plus 7.8% top line growth. We saw a significant increase in promotional intensity by competitors during the quarter, which affected our gross profit margin and adjusted EBITDA margin. We expect this competitive behavior driven by access seasonal inventory to be transitory. All of these factors combined created a unique and challenging environment that even Mytheresa was not entirely immune to. However, it is also more clear than ever that Mytheresa continues to be the most resilient player in the industry, achieving solid top line growth and continued profitability while delivering a superior customer experience and true value add for our brand partners. Our business model and differentiated focus on the concerning high-end luxury customer has proven its resilience. For these reasons, along with favorable long-term fundamentals for the luxury industry, we remain confident in our short-, medium-, and long-term outlook. Let's look at the numbers in more detail. In the third quarter of our fiscal year 2023 ended March 31, GMV was at €219.8 billion, growing at 17.8% compared to the prior year quarter of €186.6 million. At constant currency, the growth was at 15.4%. Our total active customer base grew by a solid 14.4% in the quarter. In addition, GMV per all customers grew 4.3%. We had a strong number of 124,000 first-time buyers in the quarter. And what's most impressive is, again, our top customer growth. The number of our top customers grew by 28.1% in the quarter, as they appreciate the compelling experience we provide, in addition to a strong GMV increase per top customer of 6.7%. This is in line with our impressive results in the previous quarters. The 2-year growth rate of our top customer base was 65.9% in the quarter. During the third quarter of this fiscal year, net sales increased by €29.4 million or 17.3% to €198.9 million. As in preceding quarters, net sales reported is impacted by brands transitioning to our Curated Platform Model. During the third quarter of fiscal year '23, we continued to have seven brands operating seamlessly under the Curated Platform Model. With the revenues now fully transitioned to the CPR model and their switching period for most brands being longer than 12 months ago, the difference between GMV growth and net sales growth has narrowed as expected. In the third quarter, the growth gap was only 50 basis points. For Q4 of the current fiscal year, we expect the growth gap to range between 50 to 150 basis points as there will be fluctuation between quarters. As of fiscal year '24 and beyond with incremental brands expected to be added to the CPM, we expect growth rates to continue to be close to each other. We achieved the 18% GMV growth was strong and increasing sales coming from the U.S. and the Middle East, among others. Our net sales share outside Europe yet again increased from 41% in fiscal year-to-date '22 to 44% in fiscal year-to-date '23, strengthening the global reach of our Mytheresa brand and our diversified customer base. As a consequence of macro headwinds and significant promotional activities at competitors rely inventory levels, our gross profit margin in Q3 was at 45.6%, a decrease of 320 basis points compared to the 48.8% in the prior year period. Heavy promotional activities continued throughout Q3 and even in Q4, with Spring/Summer merchandise. With that, our full price share in relation to our share of sale activities was lower than expected and put pressure on our overall gross profit margin. We expect that these exceptional and significant promotional activities of our competitors are transitory. As a result, in Q4 fiscal year '23, we expect a similar contraction of the gross profit margin in relation to what we achieved in Q4 of the preceding fiscal year. For the full fiscal year 2023, we expect a gross profit margin of around 50% compared to the 51.5% of the preceding fiscal year 2022. With gross profit margin is around 50%, Mytheresa operates a superior business model and brand positioning, even within the current temporary market challenges. We are committed to our full price focused, high-end positioning, enabling us to keep growing profitably, and we believe that these unique market pressures are transitory and will decrease in the second half of calendar year 2023. As of March 2023, the new Spring/Summer collections have been fully delivered. Although inventory levels are up 44% compared to March 2022, we are confident we will return to more normalized levels of inventory in the next quarters without exceptional inventory clearance activities. Our continuous double-digit top line growth, diligent new season buying, and disciplined pricing will enable us to leverage our inventory levels best and to fortify our market leadership position. The growth of inventory is driven by the current and upcoming season and due to our unique positioning, we are able to market the current season longer and with higher margins. In addition, being their preferred multi-brand partner for most luxury brands, we have the best curated multi-brand offering and with exclusive brand collaborations only available on Mytheresa. As a reminder, in our CPM partnerships, the brands bear the inventory risk. As a result, Mytheresa has a more diversified risk profile in regards to inventory levels. Shipping and payment costs grew by €6.4 million to €31.5 million as compared to €25.1 million in the prior year quarter. The shipping and payment cost ratio in relation to GMV increased by 80 basis points from 13.5% in the previous fiscal year to 14.3%. The 80 basis points higher cost ratio mainly resulted from the aforementioned stronger growth outside of Europe and energy price-driven surcharges, which had implications for shipping and payment expenses. As a result of our implemented changes in our payment and customer setup, we expect that in Q4, we will mostly offset cost increases and will, therefore, achieve stability in the cost ratio at around 14%, which is in line with the cost ratio in Q4 of the preceding fiscal year. During the third quarter of fiscal year 2023, marketing expenses increased by €2.4 million to €25.7 million as compared to €23.3 million in the prior year quarter. As a percentage of GMV, marketing expenses decreased from 12.5% in Q3 of fiscal year '22 to 11.7% in Q3 of fiscal year '23. The decrease of the marketing cost ratio is mainly attributable to our continued strong existing customer core performance, our continuous focus on acquiring high-quality new customers with expected strong lifetime values, and shifts of PR funds of our top customers between quarters. We were able to attract more than 124,000 new customers during the third quarter of fiscal year 2023 with lower customer acquisition costs even compared to Q3 of fiscal year '22. Adjusted selling, general, and administrative expenses grew by €6 million to €29.7 million in the third quarter of fiscal year '23. Adjusted SG&A expenses as a percent of GMV increased by 80 basis points from 12.7% to 13.5% compared to the prior year quarter. The increase of the cost ratio is due to the increase in FTEs and related higher personal costs, especially in logistics as well as higher energy costs. In addition to our focus on attracting and retaining the best and high potential customers, we are also being judicious with expense management. We are committed to profitable growth and want to increase our profitability levels. We expect the adjusted SG&A cost ratio to go down in Q4 of this fiscal year from the Q3 fiscal year '23 level. With the cost containment measures and despite the slower top line growth and cost inflation, we expect stability in the adjusted SG&A cost ratio for the full fiscal year at around 13%, in line with fiscal year '22 levels. As a fast-growth company with a relentless focus on delighting our customers, prudently capturing market share, and fortifying our leadership position, we will continue to invest in the quality of our personnel and won't compromise in our service excellence. Despite the macro headwinds affecting customer sentiment and the highly promotional short-term focused actions of our competitors, we achieved 18% top line growth with positive adjusted EBITDA performance in the quarter. The adjusted EBITDA margin was at 1.6% as compared to 6.4% in the prior year quarter, mainly due to a lower gross profit margin. Given the seasonality throughout the year, our Q3 usually has a weaker adjusted EBITDA margin than other quarters. For the full fiscal year 2023, we expect adjusted EBITDA in the range of €34 million to €43 million as an adjusted EBITDA margin between 4.5% to 5.5%. Depreciation and amortization expenses in Q3 slightly increased to €3.1 million or 1.4% of GMV as compared to €2.3 million or 1.2% of GMV in the prior year quarter. Adjusted operating income or adjusted EBIT and adjusted net income in Q3 were positive at €0.1 million and €1.4 million, respectively. For fiscal year-to-date '23, adjusted operating income was at €25.2 million with an adjusted operating income margin of 4.5%. Fiscal year-to-date adjusted net income was at €19.6 million, representing a 3.5% adjusted net income margin for fiscal year-to-date '23. Moving to the cash flow statement. During the 9 months ended March 31, 2023, operating activities used to €83 million in cash. The main driver was the usual seasonal inventory buildup of current Spring/Summer collections. During the last 9 months, net cash used in investing activities was at €18.9 million, driven by the setup of the new warehouse in Leipzig, which will enable us to better serve our customers through quicker shipping times. Around 2/3 of the total cost of the new warehouse have already been paid in accordance with the outlined setup plan and the remainder of the €14 million to €17 million will be paid in the coming quarters throughout in fiscal year '24. We ended the third quarter with cash and cash equivalents of €13 million, no long-term bank debt, and €60 million in credit facilities as of March 31, 2023. Our equity ratio is at 69%. This balance sheet situation gives us more flexibility than what we see at many competitors. In line with our press release on April 19, we confirm our expectations for the current fiscal year ending June 30, 2023, as follows: GMV in the range of €845 million to €860 million, representing 13% to 15% growth. Net sales in the range of €750 million to €765 million, representing 9% to 11% growth. Gross profit at €380 million to €36 million, representing 7% to 9% growth and adjusted EBITDA in the range of €34 million to €43 million and an adjusted EBITDA margin between 4.5% and 5.5%. We delivered solid results in Q3 of fiscal year '23 despite the ongoing macro headwinds and peer promotional activities, and we will remain focused on continuing to execute and deliver value to our customers and brand partners. We remain confident that we will achieve our updated guidance expectations for the full fiscal year 2023. As an industry leader in growth and profitability, we will continue to build on our unique customer positioning, strong brand relationships, and excellence in execution. I will now turn the call back over to Michael for his concluding remarks.

Thank you, Martin. We are satisfied with the solid quarter of fiscal year 2023 earnings results. We see ourselves well positioned to achieve our short-term targets despite a challenging macro environment. We will continue to benefit from the ongoing shift to online in luxury spend. We also expect further market consolidation among digital platforms, and we see continued global market share gains for us based on our very attractive value proposition as well as a superior business model. We are convinced that Mytheresa offers high-value consumers, the best multi-brand digital shopping experience there is. And with that, I ask the operator to open the line for your questions.

[Operator Instructions]. Our first question comes from the line of Matthew Boss from JPMorgan.

Great. So Michael, maybe to start off. In the U.S., which saw your strongest growth this quarter, -- could you just elaborate on the progression of demand trends within your aspirational relative to your top customer cohort throughout 3Q, what you've seen in April and May? And just what's your overall assessment today of luxury demand in the U.S., maybe if we looked at it by category?

Happy to do so, Matt. So we clearly see in the U.S., the trend that aspirational customers are slowing down their consumption, are taking a wait-and-see position. You can also see that in our global numbers in terms of the quite significant gap between our -- for our top customers, progress in consumption and average spend and all the other customers. And the same is true in U.S. But it's also true that in the U.S., the consumption at the high end has not exhibited any slowdown throughout Q3. And thus, the market is driven much more by their purchasing behavior, which is more ready-to-wear, more focus on high price points, more focus on what the industry is currently calling quiet luxury exemplified by brands that are less logo driven, more fabrication, and material driven. And so the trends in shopping behavior, the trends in category behavior is actually not that aspirational customers change their behavior. It's just that important or the weight of the behavior of high-end spending, wardrobe-building customer is more pronounced in the numbers. And we continue to see that in the current weeks, but we also continue to see what Martin described, the heavy promotional intensity in the U.S., particularly by players that are -- or have traditionally focused on the aspirational customers and there is excess stock in the market in the U.S. at the moment. But we view that as a transitory recalibration of budget process.

Great. And then maybe just a follow-up for Martin. On the profitability side, any change to your medium or long-term EBITDA margin target? And could you just help bridge us back to your long-term target relative to the mid-single-digit EBITDA margin guidance for this year?

Happy to do so, Matt. I mean, the current profitability levels, and we always have to bear in mind, we are still profitable. We were profitable in Q2 and Q3, despite this, as we all know, unprecedented macro situation that is affecting everybody. So the business model already shows a high variability and resilience to show a strong performance even in this unprecedented situation. And so we all don't know how long the macro headwinds will affect customer sentiment and therefore, our performance in the market and then in our positioning. Obviously, there are no structural impediments for us to change our medium- or long-term guidance on profitability as we see. And as Michael said, this is also a strong chance for us to fortify our leadership position in the market with very strong brand support. And therefore, we have the current profitability levels, as shown in the guidance, the updated guidance and obviously, we're working hard on all cost containment measures and we'll want to increase profitability.

Great. Best of luck.

Our next question comes from the line of Oliver Chen from TD Cowen.

It's Tom on for Oliver. Just wondering if you could discuss the competitive landscape and maybe what you're seeing across the United States and Europe in that regard. And maybe additionally, tying that in with your inventory position and any additional levers you see for leveraging that position?

Sure. Happy to do so. I mean as I described this call and the previous call, what we are seeing at the moment is really a slowdown on the aspirational, occasional luxury shopper across the board. So the competitive landscape is, therefore, very much influenced how much focus the individual companies had on this type of customer, whether they were more focused on as a multi-brand inspirational wardrobe-builder or more on serving that onetime customer. And thus, we do see players that clearly have overbought have expected more business to come with this type of customer, and that drives promotional pressures as they attempt to clear inventory presumably driven by cash needs. As clearly stated for every call, this is not our position. This is not our strategy. We are impacted by this behavior, but it does not change our position as being the one player that really is focused on full price serving that wardrobe-building customer. And we do believe that even if we are impacted, the ability to generate profit, generate cash, gives us potentially an even greater leverage to not only solidify or fortify our leadership but even take market share in the current environment. In terms of luxury, to luxury. I mean if other platforms evolve in a different direction, that's fine, and that serves their purpose, that's great. We are in a good position with our curated platform model to react once we see sentiment improves. As Martin explained, this is a business model where we don't carry inventory risk, but are integrated into the supply chain of these major leading brands. And on the wholesale position, we would characterize our approach as cautiously optimistic. There's a lot of risk in the environment, but we have a solid base. We have a customer segment accounting for 36% that has delivered 37% growth in the last quarter. So we have a base to drive further top line growth. But in the current times like this, we are also cautiously looking at inventory positions we take or we don't take.

Great. Very helpful. And a quick follow-up. Could you just comment on what you've been seeing in China quarter-to-date and essentially how your expectations for China inform your guidance ahead?

As stated in our introductory remarks, in the quarter Jan to March; China, Greater China, was still very much depressed in demand. This was very close to the unfortunate events that took place in October, November, December. We also mentioned that we did a major activation in April. We had multiple press sessions with our Chinese designer, capsule collections, a major event talk and I was personally in Shanghai, and I must say the mood was very good, very positive. So I can confirm based on the numbers and based on what I saw and heard when on the ground that there is a very good recovery. Although this is not an immediate bounce back. So we expect from the Chinese luxury consumer market, a continued but steady return to levels that we saw in '19, but not immediate returns. And that gives us confidence for growth not only as of Q3 in Europe and in the United States, but also growth in Greater China and even Southeast Asia for the coming quarters.

Our next question comes from the line of Kunal Madhukar from UBS.

One on the inventory. Just a follow-up on the last question. I want to understand; inventory stands at unprecedented levels despite the fact that you have transitioned to CPM model. And if the industry itself is over inventoried, how do you expect to kind of still be able to sell through this inventory, in time; given the seasonality aspect of it, in time, and at decent prices?

I'm happy to give a first regarding inventory margin and Martin will address that. Number one, you're right. We have very high inventory levels because particularly Q2 was not, in terms of top line, what we expected. But we, of course -- it's not dollars to dollars you have to look at. You have to really look at the composition in terms of what are these products, a, what season; b, what brands? And then even within brands, are these core/carryover items that have multi-season relevance or pure seasonal items that are, as you said, are aging rapidly? And also we have had always success in the past of driving revenue from inventory longer than one season and then we have proven that. So we see the need to work through that high inventory, absolutely right. But we are not in a position where we need to push any panic button. We are optimizing for gross profit margin. We are not optimizing for short-term cash needs. Our balance sheet position, our cash position is such that we can really drive through with customer demand and of course, we do expect and this was built in our new guidance, we do expect us some margin pressure. So it will take some margin to work through this, but we absolutely view that the recalibration we did, which is included in our new guidance for profitability captures and covers that. And maybe with that, I'll hand over to Martin.

Yes. Maybe in addition, Kunal. I mean next to a continuous double-digit top line growth, which will also help on the inventory side and the diligent new season buying and when we take a closer look by brand and by segment. Also bear in mind that the inventory levels base of the previous year is influenced by brand switching to the CPM model. So in fiscal year-to-date, '22, so the preceding year, 9 months inventory levels decreased 20 million despite our growth -- top line growth of 15%. So that usually would translate in an increase in inventories, but we actually decreased due to the switching effect. But your observation is 100% correct. We have high inventory levels, and we will continue to work on that diligently along the lines that Michael explained.

Thanks and just a quick follow-up. So one Michael talked about being cautiously optimistic about the near-term competitive environment. As we look at the environment and maybe macro might even worsen from current levels. In that situation, how should we expect Mytheresa? And what kind of growth should we kind of expect? What kind of margin should we kind of think if macro goes worse?

We don't know. So you're right, it could get worse, and it may get not worse. So that is unfortunately the facts. What can we expect from a business? I think we are showing that with the focus on high-end wardrobe-building customers, we are in the best position to mitigate a lot of these challenges. I mean plus 18% growth is good. But what is really good in this quarter, if you look at our top customer revenue. And I mean Q3 was economically not a great quarter, it was not a bad quarter. So I think in an environment like that, you can expect of Mytheresa to really grow the business with top customers in this quarter, a growth of 37% over the quarter 12 months ago, where I believe it fairly, we said the economic situation in several regions was much more positive. And that is what we are focusing on because we do believe the aspirational customer will come back, but it will take time. And it may take longer, depending on the worsening of the economic situation. It may not take so long as the situation picks up, but we are, as managers, not experts in assessing that, but we see excellent solidity and excellent desire by our top customers, and this is what we are driving. And this is where also the launch announced today of pre-owned luxury watches with price points up to €100,000. This is all fitting this position. And therefore, we believe with this Q3, we are fully in line with the guidance for our fiscal year that ends in June, and we are not giving today guidance for the next fiscal year. But given the current environment, we are very comfortable with continued growth and continued profitability as being the hallmarks of our business.

Our next question comes from the line of Lauren Schenk from Morgan Stanley.

Great. I just wanted to ask maybe a bigger picture question about your philosophy on commercial activity versus top line growth. Is there a scenario where you might just take a stance that you're not going to match our purchase date in productivity and maybe we'd see a little bit of a bigger impact on top line. How you're thinking about that going forward? And then just a follow-up on the inventory, how are you planning second half of the time of the year as inventory buys at the moment of the year?

Thank you, Lauren. I'll take the first question, and Martin can address the second one. So I think it is -- maybe it's helpful to just describe how margin pressure is reaching our business. I mean, in the current environment, unfortunately, consumers are taught again that it is best to buy items on sale to buy items with reduced prices and wait for this to come if they don't see it. So what happens in our business at the moment is that we see consumers buying more on items on sale. So our sales share has grown in Q3. There was, of course, still for winter sale. And usually spring/summer is already a good business in Q3, which drives, of course, the full price share. And here, we saw reluctance by consumers to buy spring/summer full price because they already started to see expect; "no, no, we will see these full price items somewhere else already on discount." So there was, unfortunately, sort of learnings from -- for these customers, "Oh, I can wait, I can find a discount somewhere." So it's not that we engage, retaliate in these type of promotions, but we are impacted by consumers saying, "Oh, I don't have to buy full price. I can find it somewhere else." So it's the mix effect, which gives a higher way to sale and therefore, a higher lower mixed margin, just to explain that we continue to stay in our strategy and not follow, but the mix still affects our margin as shown in Q3 and is reflected in our guidance. Maybe, Martin, you can take the second part of Lauren's question...

Yes, Lauren, happy to do so on the inventory. As Michael said, our approach is cautiously optimistic. So on the one hand, yes, we look at the fall/winter '23 by even the spring/summer '24, being very diligently on brands and on the orders, but not following a headless approach of just trying to focus on short-term cash generation. But on the other hand, as well, thinking about in this unprecedented situation where peers are struggling to build on our strong top customer performance and growth and will focus also on capturing market share and continuing to grow and, therefore, also have a balanced approach on the inventory side. And from those two lines, the overall approach is cautiously optimistic, which is in the fall/winter '23 and the spring/summer '24 line.

Our final question comes from the line of Abhinav Sinha from Societe Generale.

A couple of questions from my side. In terms of geography, as you said, like GMV grew 27% in U.S. and probably it was not so great in China. So from the sales number, what we see, there was like a slowdown in Europe versus the overall number. So any color on Europe and how you see the current trading in Europe? And second question is on the gross margin. So any comment on like who basically these competitors are because we heard Farfetch saying that in 4Q '22 results that they also had gross margin issues, same with Neiman Marcus, probably same with Saks and Zalando in Europe. So like first of all, which are these like regions where you are facing this promotionality? Who are the typical players who are -- I mean who are leading this? And I think you already said you -- I mean, that will -- most likely, you see it getting completed by 2Q or 3Q of the calendar year, right? So yes.

Happy to address some of the questions. So just a clarification for the regional growth we saw in Q3. So global growth was 18%. Europe grew 19%. U.S. grew 27%. So it's clear as has been a slower region, and I can confirm the slow region was Greater China, Southeast Asia. Remember, Jan-March was still very much near to the unfortunate events in November, December in the reversal of COVID policy. We have seen in a recovery, but this was not taking place in Jan to March. So again, Europe, about the average of our global growth, U.S. ahead of our global growth. In terms of who are the players, I'm not going to name any individual players. I think as followers of the industry, you can easily see who has engaged and heavy promotion intensity, who has already started to discount Spring/Summer merchandise end of March, early April. I think the real factor of who are those players comes back to what I said initially. The biggest problem at the moment is for platforms that had a high share of aspirational, occasional buyers that are not luxury wardrobe-builders, but occasion by luxury items. And the bigger the share of your business with that segment, the rate of the current challenges are in the environment where that consumer segment is slowing down. And as we have lead times for inventory purchases at the moment, spring/summer '24 buying starts for the whole industry. And so given the current context, spring/summer '24, in our view, will be bought much more carefully, cautiously conservatively whatever the best ad work is. And therefore, that spring/summer '24 will be a season that reflects the recalibration for those platforms that are focused on the aspirational customers. Fall/winter '23, we already also observed that certain platforms have reduced their orders after placing them. I mean, you can cancel them. So we do expect, indeed, in terms of our quarters that with Q3, the situation will have improved significantly in terms of excess stock, but I have to add, of course, this is sort of one element of the equation. The other element of the equation is how is demand to win. So if demand stays as it is, -- my statement is valid. If demand improves, it actually gets easier earlier. And of course, if the situation worsens than some of the inventory recalibration that is happening now may not even be enough. But that goes back to -- it's very hard to make definitive predictions for consumer demand at the moment in the aspirational sector.

Okay. And on your gross margins, I mean, what is your strategy on promotionality? I mean are you sticking with your prior strategy of like doing less promotions on the in-season and ahead season products and more on the out-of-season product? Or what does -- does that mix also get impacted?

I mean the main impact of what is happening at the moment is how consumers shop. So a year ago, consumer seeing spring/summer merchandise that they like, that they were excited about, they were more concerned about if I wait, I don't get it anymore in my size. The current activity, of course, leaves the customer with a view, I might still get it cheaper because somewhere on some platform, there will be a discount that actually not late in the season, but quite early in the season. And thus, customers are more reluctant to buy immediately at full price. This is the main impact for us also on our margin because it changes the mix. But in addition, we are, of course, also recalibrating the visibility of sales activities that we do seasonal sale like the Fall/Winter sale that still took place in Q3, where in the past, we may have put it not as the main message on our website that there's the Fall/Winter sales, not as a main mass send-out to all our newsletter subscribers. So that's how we adapt and how we adjust. But it's not -- our policy remains that we focus on full price. And so we are not increasing discounts or starting discounts earlier. We don't believe that this actually optimized for gross profit -- in absolute terms, it may optimize for short-term cash, but we are in a very good position in terms of balance sheet and cash.

Thank you, ladies and gentlemen. This does conclude today's call. Thank you for your participation. You may now disconnect.