Greetings, and welcome to the Mytheresa Fourth Quarter and Full 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 fourth quarter and full 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.mytheresa.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. We will today comment on the results and performance of our fourth quarter and full fiscal year 2023. We are extremely pleased with our excellent results in a very difficult market environment. With strong double-digit growth and continued profitability, we have surpassed market expectations both for the fourth quarter and the full fiscal year 2023. This performance clearly sets us apart and demonstrates the fundamental strengths of the Mytheresa business model as well as the superior quality of execution. Before I speak to some of the key achievements, let me just point out some highlights of the fourth quarter. We saw high double-digit GMV growth in the United States, achieved double-digit growth in Mainland China, grew again our business with top customers over proportionally, and maintained profitability despite some margin pressures. The current consumer environment is clearly characterized by a slowdown of aspirational customer spend, increased promotional intensity by many players, as well as ongoing economic uncertainties across the world. Now more than ever before, our focus on the high spending wardrobe-building customer, on a highly curated inspirational offer on full-price selling, and on truly money can't buy experiences to drive customer engagement is proving to be the superior business strategy. I want to leave you today with three key messages allowing you to have a clear view on the strengths and health of our business. First, our unique positioning as a digital platform focusing on big spending wardrobe-building customers continues to generate global growth, even in very challenging economic circumstance. This is evident in our excellent top customer growth and double-digit GMV expansion across all geographies. Second, the share (ph) number and quality of brand collaborations as well as money can't buy experiences and activations in the fourth quarter allowed us again to significantly increase our brand equity across the globe, but particularly in the United States. Third, with the successful transition to a completely new technology stack in the fourth quarter and the successful test runs in our new state-of-the-art distribution center at Leipzig Airport, we have put in place and almost fully paid the foundations for future multi-year growth and service improvements for our business. Sector-leading growth, strong profitability, and ongoing investments into the future sets us clearly apart from peers. Let me now comment in more detail on these three key messages for today. First, in the fourth quarter, we grew our gross merchandise value, GMV by plus 13% compared to Q4 fiscal year 2022. For the full fiscal year, our GMV growth reached plus 14.5% compared to full fiscal year 2022. This strong double-digit growth is above market expectations and sets us apart. Our consistent growth momentum in fiscal year 2023 is evidenced also by the high two year growth rate in GMV of plus 33.6% in the fourth quarter and of plus 38.9% for full fiscal year 2023 compared to fiscal year 2021. It is also highly noteworthy that the United States generated, again, an outstanding GMV growth with plus 40.8% compared to Q4 of fiscal year 2022. The United States has become a major growth driver for our business despite the market slowdown and accounted for 19.1% of our total business in the fourth quarter of this year 2023. The driver for these excellent results is our continued focus on the big spending, water-building top customer and not the aspirational, occasional luxury shopper. Our top customer base grew by plus 24.2% compared to Q4 fiscal year 2022. The average spend per top customer in terms of GMV grew by plus 3.7% in the fourth quarter of fiscal year 2023. Overall, the business with top customers grew by plus 28.7% in terms of GMV compared to Q4 of fiscal year 2022. Over the last three years, we have grown our business with top customers by plus 58.3% in full fiscal year 2021, plus 26.8% in full fiscal year 2022 and now plus 30.1% in full fiscal year 2023. The share of top customers in our business in terms of GMV has increased from 32.6% in full fiscal year 2021 to now 38.5% in full fiscal year 2023. Put in line with our focus on big spending customers was the launch in the fourth quarter of our exclusive partnership with Bucherer, the world's largest luxury watches and jewelry retailer from Switzerland to offer certified pre-owned watches with an international two-year warranty and full service package directly from the watch experts of Bucherer. The offer initially launched in Europe and covers the most elevated selection of high-end and certified pre-owned timepieces from brands such as Audemars Piguet, Breitling, IWC Schaffhausen, Jaeger-LeCoultre and Omega. So far, the most expensive watch sold on our platform was an EUR86,000 Audemars Piguet Royal Oak watch. In line with our high-end strategy, our average order value increased by plus 4.5% to a record high of EUR654 for the full fiscal year 2023 compared to fiscal year 2022. This is not just driven by our continued expansion into new luxury categories, such as the recently and successfully launched home and lifestyle category, but also by the preference of top customers to more expensive items. Second, the fourth quarter saw an unprecedented number of high impact campaigns, exclusive product launches and events, as well as money can't buy experiences. All of them further increased our brand awareness and brand equity as well as clearly positioned us globally as a leading digital luxury platform. In the fourth quarter, we had the exclusive launch of styles from Loewe’s Paula’s Ibiza collection, the launch of an exclusive 84 piece capsule collection from Dolce & Gabbana, only available at Mytheresa, the launch of an exclusive capsule collection from Zimmermann on Mytheresa, exclusive launch of pink PP styles from Valentino only available at Mytheresa, exclusive launch of the Shark Lock Cowboy Boots by Givenchy only available at Mytheresa, and the launch of exclusive styles from Etro on Mytheresa. Please see our investor presentation for more details on brand collaborations. We also hosted, again, many exclusive events for our top customers, providing them with money can’t buy experience. Examples of events in the fourth quarter include a dinner and party to celebrate the launch of Loewe’s Paula’s Ibiza collection with the creative director, Jonathan Anderson, attending at the Sheats-Goldstein Residence in Los Angeles. A two-day experience for top customers in Rome, in partnership with the Maison Valentino, including an exclusive private tour, the archives of the Maison in Rome, as well as events in New York, Stockholm, and Saint-Tropez. The most significant and also biggest event ever in terms of global press and social media reach was a three-day experience in Portofino in partnership with Dolce & Gabbana to celebrate the launch of the 84 piece exclusive capsule collection. The three days included a private cocktail reception by Domenico Dolce and Stefano Gabbana at their home in Portofino, as well as a 1 hour fashion show for the capsule collection, collect staged at the famous Piazzetta in Portofino for celebrities, customers, and press, exclusively created for Mytheresa by the two designers. Please see our Investor Presentation for more details on events in the fourth quarter 2023. A big focus for our brand building efforts, as evidenced by the number of events we hosted there, continues to be the United States, which is a key market to drive growth for Mytheresa. In order to engage and build personal relationships with high net worth customers, we hosted our first ever five-week pop-up in partnership with Flamingo Estate in East Hampton in the months of July. We converted the former auto body repair shop into a summer body shop offering a highly curated selection of merchandise as well as hosting over 15 events in the location with partners such as Oscar de la Renta, Dr. Dr. Barbara Sturm, Lewis Miller, The Hamptons Magazine, as well as featuring Porsche and Ferrari cars. In total, we welcomed over 3,200 registered selected guests over five weeks. Please see our Investor Presentation for more details on the pop-up in East Hampton. Third, the fourth quarter saw again several key milestones for our business that will drive significant future growth, service improvement, and profitability for Mytheresa. As announced in the last earnings call in April, we successfully concluded a multi-year project to upgrade our complete e-commerce technology stack. We migrated all our websites, apps, content management systems, merchandising, and product information systems to a new service-based and highly scalable platform that is managed by us directly and will allow us to improve speed, flexibility, personalization, regionalization and cost of IT development. The transition to the new platform was achieved with minimal disruption to our business, which is a testament to our excellent in-house technology capabilities, as anyone can tell, that has gone through a similar large-scale technology upgrade process. Over the coming months, we will more and more leverage our new technology platform for growth and margin improvements. With our Bucherer partnership, we not only entered another luxury category in the fourth quarter, offering certified pre-owned watches, but also onboarded another company successfully to our curated platform model, CPM. This time even with inventory sitting in the stores of a partner. In addition, we continued to operate successfully seven fashion brands on the CPM. Another huge milestone for the company was achieved with the opening of our new distribution center at Leipzig Airport. I'm happy to announce today that the construction has been completed and that we started test operations in the new facility already in August. As of Monday, September 4, we have actually started shipping customer orders from this site. We will ramp up now the operations over the coming months. Just as a reminder, the new facility with its 55,000 square meter of building space will not only provide ample capacity for the future growth of our business, but it will also dramatically improve customer service, thanks to its unique location and direct adjacency to the international airfreight hub of DHL. We will benefit from significantly later cut-off times for international deliveries, additional flight options to the United States, and faster return processing from customs destinations. Already in the second half of fiscal year 2024, we should see the positive impact of the new facility on our business. All the milestones mentioned will further increase the high cost variability in our business model. Martin will provide in a moment more details on our cost management, despite some inflationary cost pressures, and how all this translated into our strong bottom line results for the fourth quarter of fiscal year 2023 and the full fiscal year 2023. With all the above, it should come as no surprise that we are extremely pleased with our excellent performance in the fourth quarter of fiscal year 2023 and the full 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. This also drives our strong confidence in our medium-term growth trajectory and profitability levels, despite the short-term uncertainties in the current environment. And now, I hand over to Martin to discuss the financial results in detail.

Thank you, Michael. We are extremely pleased with our excellent performance throughout the fourth quarter and our full fiscal year ‘23, ending in June ‘23, with top-line growth, exceeding market expectations, and additional beats and consensus regarding our profitability. We continue to grow strongly in all regions of the world, outperforming the market. We successfully continued our path of capturing market share in a consolidating market. Our profitable top-line growth is a clear sign of our superior business model and market positioning even in very difficult times like now. We'll continue to focus on profitable double-digit growth, which we believe clearly sets us apart from others, and to boost our highly valuable top customer base, which loves our exclusive and inspiring multi-brand offering. I will now speak to the financial results of the fourth quarter and full fiscal year ‘23, end of June 30, 2023, and will provide additional details on certain key developments during the quarter and the full fiscal year. Unless otherwise stated, all numbers refer to Euro. In the fourth quarter of fiscal ‘23, running from April to June, GMV increased by double-digits, 13%, to EUR222.2 million (ph) as compared to the prior year period of EUR196.7 million. With this strong growth, we clearly beat market expectations, delivering again superior growth above peers. Also, at constant currency, GMV grew by an impressive 12.1%. Our growth continues to be driven by expanding our highly valuable top customer base. The number of top customers grew 24% in the quarter and their average spent increased as well by plus 4% of GMV per top customer. For the full fiscal year ‘23, GMV grew by 14.5% to EUR855.8 million as compared to EUR747.3 million in the prior year. This is also above expectations. For the full fiscal year, we grew our top customer base by 25%. In addition, we also saw a strong increase of GMV per top customer by 4.3% on average. In the last three years, we were able to grow our top customer base by 136%, which now generates 38.5% of our total revenues. In fiscal year ‘23, we grew our total customer base by 9.6% and achieved a higher performance per customer as reflected by the 4.7% growth in GMV per customer. Our average order value increased by EUR28 per shipment delivered to a record high of EUR654. The continuous increase in AOE in the past quarters and years clearly improves order economics and reflects our successful focus on full price selling and operating in the sweet spot of high-end luxury. Total order shipped during the last 12 months increased by 14%, breaking the 2 million mark for the first time. Our superior positioning, which is especially attractive to our top customers is also visible in our performance in the U.S. Despite being a highly competitive market, the number of our top customers in the U.S. grew by 64% during the last quarter. The number of first-time buyers in the U.S. grew by 44%. The U.S. in total grew by 41% GMV in the quarter, and now makes up 19% of our business. We are expanding our leadership position worldwide and are continuing to grow in Europe and other parts of the world. It is important to note that due to our full price focus, asset-like business model, and strict cost management, we enjoy similar profitability margins worldwide and benefit from capturing growth opportunities in any region of the world. We are committed to delivering consistent and robust growth, which is unique in the industry. Our high-end and inspiration-focused positioning, attracting primarily top customers pays off and shields us from slowdown effects of aspirational customers. As we face very challenging and uncertain macroeconomic times, we remain cautiously optimistic for the full fiscal year 2024, which runs until June 24, and expect GMV growth of 8% to 13%. We also delivered net sales performance above expectations. For the full fiscal year, net sales were at EUR768.6 million, an 11.4% increase from EUR689.8 million in the prior year. As a reminder, we expect ongoing deviations in growth rates of GMV and net sales as different brands operate either under the wholesale model or the CPM. This is because the individual performance of a brand in the overall luxury market may differ each quarter and season, independent of the brand operating with us under the wholesale model of the CPM. At net sales, we only book the commission fee of our CPM revenues. During the quarter from April to June, net sales increased by 16.5% to EUR203.8 million as compared to EUR174.8 million in the prior year period. The higher growth rate in net sales is due to several wholesale brands performing better than some individual CPM brands. Remember, performance of a wholesale brand is to 100% reflected in GMV and 100% in net sales. Performance of a CPM brand is 100% reflected in GMV, but only its commission rate is reflected in net sales. Therefore, above average strength of several wholesale brands results in net sales growing even faster than GMV. Going forward, we expect that those growth differences between GMV and net sales will not be significant. And therefore, for the full fiscal year ‘24, we also expect net sales growth in the range of 8% to 13%, similar to the GMV growth. As of Q4 of fiscal year ‘23, we have seven major fashion brands operating seamlessly under the CPM. We provide full flexibility to our brand partners and can offer both models in our collaboration efforts and expect that one or two brands will switch from the wholesale model to CPM each fiscal year. Gross profit during the quarter and for the full fiscal year was above market expectations at EUR99.9 million and EUR382.6 million respectively, growing at 7.8% for the full fiscal year. The continuously high gross profit margin of 49% during the quarter saw a stable gap in operating gross profit margin of 320 basis points versus last year, which we explained already in the quarter before. If you compare the achieved gross profit to GMV for this and last year's quarter and exclude technical effects in the margin calculation, which I will explain later. The operative gross profit margin slippage was around 330 basis points. This is exactly in line with our forecast and guidance. And it indicates that the effects of the heavy promotional environment are now stable and manageable. We expect this effect to significantly narrow towards the end of calendar year ‘23. Already in the current quarter, we see a decrease in the margin gap. An additional around 200 basis points gross profit margin decrease compared to the reported gross profit margin of last year is a more technical result, based on net sales growing stronger than GMV as outlined before. As the reported gross profit margin is in relation to net sales, it showed a decline of 520 basis points. This is due to several wholesale brands growing even stronger than some individual CPM brands and therefore net sales was growing faster than GMV. Therefore, the CPM share for this quarter is not comparable to the same period last year. Comparing the gross profit to GMV gives you a fairer view on the margin development. Here, we saw the 330 basis points margin slippage, which is stable and was expected, as noted in our last earnings call. At the end of the day, the absolute gross profit achieved in the quarter, which was at EUR99.9 million, outperformed expectations. As there will be performance differences of individual brands operating under the wholesale model of the CPM, the reported gross profit margin will be affected from this mathematically in certain quarters. Our focus remains on growing the absolute gross profit figure and for fiscal year ‘24 we expect gross profit to also grow 8% to 13% in line with top line growth. For the full fiscal year ‘23, gross profit grew by 7.8% to EUR382.6 million above expectations. The gross profit margin is at an industry leading level of 49.8%. Our focus on full price selling combined with our high end positioning remains unchanged. The shipping and payment cost ratio in Q4 remains stable at 13.9% compared to the prior quarter. This is a remarkable success considering we continue to broaden our customer base worldwide and experience cost pressures. Our net sales share outside Europe increased from 41% to 44%. The stability and the cost ratio mirrors our successful implementation of further cost efficiencies while improving our high-performing worldwide customer payment and duty setup. For the full fiscal year ‘23, the shipping and payment cost ratio increased slightly by 30 basis points to 13.4%. Mytheresa is able to deliver double-digit top line growth rates, which is unique for our industry and in this environment. We are investing in capturing market share and growing our top customer base. In Q4, we continued our marketing efforts as we saw successful, high potential new customer acquisition and top customer attention. During Q4, marketing expenses rose by EUR5.6 million, reaching EUR32.1 million, which led to 100 basis points increase in the marketing cost ratio. The increase is also due to a shift effect of customer events held as it is comparing against the low comp in the prior year quarter. For the full fiscal year, marketing expenses were EUR112 million with an almost stable marketing cost ratio of 13.1%, 20 basis points increased from 12.9% in the prior year period. Once again, we were able to keep the marketing cost ratio stable. We continue our successful approach in increasing top customer marketing efforts and events while being efficient with online marketing activities geared towards first time buyers. Our flexible business model allows us to quickly modify our approach, especially looking at our over EUR100 million marketing spent, if the macroeconomic environment were to change dramatically. Adjusted selling, general and administrative expenses only grew marginally by EUR2.2 million to EUR28.3 million during the fourth quarter. Adjusted S&A as a percentage of GMV decreased significantly down by 60 basis points to 12.7% as compared to 13.3% in the prior year quarter, despite cost pressures in the market. We are diligently looking at cost efficiencies and cost leverage in all departments and we'll ensure that Mytheresa continues its overall profitable growth path even in unique times like now. Looking at the full fiscal year, adjusted SG&A expenses rose by EUR18.8 million to EUR112.2 million with a slight increase of 60 basis points in the S&A expense ratio to 13.1%. In Q4, fiscal year ‘23, adjusted EBITDA was EUR7.4 million above market expectations with an adjusted EBITDA margin of 3.6%. For the full fiscal year, adjusted EBITDA was at EUR41.1 million, representing an adjusted EBITDA margin of 5.3%. Our consistent track record of reporting positive adjusted EBITDA exemplifies the robustness and resilience of our business model. We consistently deliver outstanding industry-leading performance, both in terms of top and bottom line results, setting a unique benchmark in the industry. There are no structural barriers in our business model or market positioning to prevent us from achieving the profitability levels we experienced in the last years over the medium term. For fiscal year ‘24, given the current macroeconomic uncertainties and the extraordinary promotional environment, we prudently guide towards an EBITDA margin of 3% to 5%. As in the past, we are confident to strike the right balance between strong growth and above market profitability. Our end-to-end profitability throughout the P&L continues to be visible at both the adjusted operating income and adjusted net income levels. In fiscal year ‘23, adjusted operating income amounted to EUR29.4 million with an adjusted operating income margin of 3.8%. Adjusted net income amounted to EUR20.3 million, resulting in an adjusted net income margin of 2.6%. In Q4 of fiscal year ‘23, we had a positive operating cash flow of EUR28 million and a positive free cash flow of EUR24 million. This is above previous year levels and was achieved despite the continuous ramp up of our new logistic center in Leipzig, of which more than 75% of CapEx has been paid. We finished the fiscal year with no bank debt, no utilization of the EUR60 million working capital revolver, and EUR13 million cash on hand. This gives us a solid financial strength compared to other players in the industry. Because of our cash and balance sheet strength, we're managing our inventory levels for profit maximization. We're not forced into short-term cash generation as some other players in industry, which will create manifold issues for them in the medium term. Our overarching focus is to attract and retain the right customer cohorts with focus on full price, being mindful of brand relationships and preventing undue inventory aging. With this approach and our enacted measures, we expect to return to normal levels of days inventory outstanding of around 260 days from the current 302 days in the medium term. The current inventory position does not create any concerns for us because, first, the June level is elevated due to earlier deliveries compared to last year. We have 800 basis points, or EUR20 million of earlier fall/winter deliveries compared to last year. Second, previous year is influenced by merchandise buyback programs with CPM brands and therefore there was a unique stock reduction in last year. And third, 80% of our inventory covers the current and upcoming seasons. With our full price and high-end positioning and luxury, we are able to achieve the targeted sales rates over a much longer period than peers. As a reminder, we usually achieve a sales [indiscernible] of 95% over 21 months. Please also bear in mind that unlike others, we're successfully achieved and continue to target double-digit growth rates, enabling us to clear out additional merchandise. In addition, we operate at an industry-leading gross profit margin of around 50% and reported a gross profit margin slippage of only 170 basis points last fiscal year. We ended the 12-month period of fiscal year ‘23 in a strong financial position with cash and cash equivalence of EUR30.1 million, no bank debt, and a total unused availability under the role of in credit facilities of EUR60 million as of June 30, ‘23. We have fully paid inventory in our warehouse and the remaining CapEx of the Leipzig warehouse is only around EUR8 million to EUR10 million in fiscal year ‘24. In addition to our high free cash flow conversion in our business model with double-digit growth rates, we have a favorable cash cycle with our CPM partners, as we only pay them weeks after we receive the payment from the customer and we bear no inventory risk in the CPM model. We are therefore in a great position to fuel our double-digit top line growth and are able to adjust short-term if the macroeconomic situation were to change dramatically. We are proud of our continued profitable growth story, even in a very difficult market environment like now. We believe that for the full calendar year 2023, macroeconomic uncertainties will continue for sure. We're thus cautiously optimistic for fiscal year ‘24 and are guiding GMV and net sales growth between 8% to 13%, gross profit growth between 8% to 13%, and an adjusted EBITDA margin between 3% and 5%. As seen in prior years, please remember that our quarterly performance varies due to seasonality. Q1 and Q3 of our fiscal year are the weaker quarters, whereas Q2 and Q4 are usually stronger. But this year, in addition, we expect a much stronger H2 versus H1 performance. Michael already talked about leveraging our new technology platform for growth and margin improvements. The benefits of our new tech stack in terms of improved speed, flexibility, personalization, regionalization, and cost of IT development will drive performance in H2. Furthermore, in H2 of fiscal year 2024, we will also start to fully benefit from our new distribution center in Leipzig in direct adjacency to the international airfreight hub of DHL in terms of speed of delivery and processing efficiencies. Finally, we're also aware that with a Spring/Summer ’24 season, the amount of ordered inventory by many players was significantly reduced, which will reduce the promotional margin pressure in H2. Therefore, we expect for H2 a top line growth acceleration of 600 basis points to 800 basis points over H1 compared to last year figures, and an adjusted EBITDA margin improvement of 50 basis points to 150 basis points from H1 to H2. H2 will therefore be clearly on the upper end of our guided ranges for fiscal year ‘24. Given the above and due to the current macro headwinds, heavy promotional environment and still early stages of our new infrastructures, we expect our Q1 top line performance below the guided range, only slightly above prior year. In the same way, we also expect adjusted EBITDA to be marginally negative in Q1. This is already reflected in our full year guidance for fiscal year ‘24. We remain very confident for the medium and long-term outlook for our business. We are currently gaining market share. We have just completed two major infrastructure milestones. We will thus benefit over proportionally and more quickly, when the luxury market leaves behind the current economic challenges, which it usually does very fast. Our market position is getting stronger every month. During this fiscal year and beyond, you will see a fortification of our leadership position in multi-brand luxury, building the most successful luxury powerhouse for the top luxury customers and the top luxury brands. I will now turn the call back over to Michael for his concluding remarks.

Thank you, Martin. We are very pleased with our fourth quarter and full fiscal year 2023 earnings results. We see ourselves well-positioned to achieve our fiscal year 2024 guided targets despite challenging macro environment. We will continue to benefit from the ongoing shift to online luxury spent, increasing importance of the big spending customer segment and the desire by brand partners to work with only the best digital platforms in the market. We are confident that Mytheresa offers high value customers the best multi-brand digital shopping experience there is. And with that, I ask the operator to open the line for your questions.

Thank you. We ask that you limit yourself to one question and one follow-up, please. [Operator Instructions] Your first question comes from the line of Matthew Boss of JP Morgan. Your line is open.

Great. Thanks. So, Michael, could you elaborate on drivers of the regional strengths that you saw in the U.S. and speak to notable demand trends that you've seen so far in the first quarter by region that build to your outlook for slight growth?

Thank you, Matt. Yeah. Our growth in the U.S. was quite extraordinary and we clearly see that our global strategy of focusing on high net worth individuals and big wardrobe spenders is paying off also in this market as cited by the -- over 60% increase of top customers by Martin. We have increased our presence in the market. We have now personal shoppers in the market. We are present with events. We are present with styling suites. And as often mentioned, this may sound more like a grassroot, but it is a very targeted communal approach. And when you do the right event in Arkansas, in Aspen, in North Carolina, in Miami, in LA, in San Francisco, it pays off. In addition, of course, with bigger events like the one we did for five weeks in the Hamptons. I mean, this is what drives this high end of the market. In regard to Q1, it is evident that the other big trend that has been discussed for a while, the endless vacation trend is also affecting a player like us. People on vacation are not buying as much online. And August was a global vacation months, not only for U.S. consumers traveling abroad, but also Chinese consumers starting to travel abroad, at least in Asia and somewhat in Europe. So we continue to see the slowness of aspirational consumers, no change that, and with the big or endless vacations now ending, we also see the returns of the high big spenders. But the market is clearly driven by a lot of uncertainties. I mean you are in a better position, but I just named the real estate market in China, the ongoing inflation in Europe, which may require ongoing interest rates increases, the upcoming election in the U.S. So while our core consumer is absolutely resilient, as proven by a quota where we grew, where others shrank, we are cautious for the outlook and we want to rather surprise positively than negatively going forward.

Thanks. And then Martin, on the cadence of the year, could you just help walk through considerations for top line and gross profit margin embedded in your full year outlook as we break down the first half versus the second half of the year?

Yeah, Matt. Happy to do so, because there's some overlaying effects that I called out. I mean, first of all, if you look at the past years, and that will also happen in this fiscal year ‘24, Q1 and Q3 are usually the weaker quarter, driven by a lower gross profit margin and lower EBITDA margin, resulting in a lower gross profit and lower EBITDA margin. And Q2 and Q4 are usually the stronger quarters. But this year, also as an overlay, we expect H2 to be much stronger than H1, given the factors that our two infrastructure projects are really kicking in. April, May, we fully migrated to our new IT platform with minimal disruptions. And then September, we are now ramping up our completely new warehouse at the Leipzig Airport, which will also give us a lot of customer benefits and operational efficiencies. And as we talked about before, the Spring/Summer ‘24, buying that we see in the market is a complete different level than Spring/Summer ‘23 or fall into ‘23 to a certain extent where. So we are much more optimistic for H2 and that's why we also – and then expect that our top line growth levels are higher in H2, 600 basis points to 800 basis points, stronger growth in H2 than H1 and also the bottom line. And therefore, it was important for us, also given the endless location, logic, and other factors that we're seeing in the current quarter to call out that Q1 will be a weak quarter. Top line growth in line with I mean on the same level as previous year, and EBITDA, adjusted EBITDA marginally negative. And so Q2, October, November, December of this calendar year, our Q2 fiscal year will then be stronger, but still influenced by the -- what we expect still heavy promotional environment. And then Q3 and Q4 starting in January, given all the information above is then really kicking in and is then the start for us to then coming back to top and bottom line performance that we used to experience.

Thanks for the color. Best of luck.

Your next question comes from line of Oliver Chen of Cowen. Your line is open.

Hi. Thanks a lot. On your comments on the aspirational consumer, what percentage mix is this approximately and how do you see this evolving? And on the context regarding the extraordinary promotional environment, how are you embedding merchandise margins and promotions versus last year? A lot of this may be out of your control, how competitors who are less well capitalized may respond. So wanted to understand those risk factors. You have a lot of great momentum in the U.S., DC, the distribution center in the U.S. seems like a nice opportunity to elevate the customer service and speed. Just wondering how that may fit into your roadmap as well? Thank you.

Thank you, Oliver. On your first question, I mean, our full top customers that have fully developed to top customer status account for 40% of our business. But of course in the remaining 60, we have also a lot of top customer potential based on our quite good, even though not 100% reliable targeting, but they have been fully developed. So it's our top customer share is over 40% because we have each season, each month we acquire new cohorts. The aspirational customer share difficult to guess, but we were out there already with numbers that between 25% and 35% are probably customers that buy only once or twice. This slowdown, how long will it continue on the aspirational customer? It's hard to gauge. I think we are in a cycle here, in a fashion cycle, overlaid with a strong economic cycle, maybe also different by geography. There are some assumptions that the U.S. may actually be sooner out of that cycle. But the main message to remember is because of our focus on the high end, and not just for the last 12 months, for years this has been our approach, we can mitigate the slowness in that one customer segment with strong growth because otherwise we would not be able to deliver double-digit growth and also we would not be able to deliver 40% increase in the U.S., which is the market that probably has seen the strongest reversal of aspirational consumers. In terms of the margin pressure promotional intensity, yes, we are expecting that the fall/winter season, that the Christmas season will be again very promotional heavy. We do not believe that there was a lot of inventory correction fall/winter ‘23 yet. We expect that more for Spring/Summer ‘24. This is also one of the drivers that Martin referred to why we clearly see H2 being stronger than H1. And our tactic for that has always been we need to focus on the full price. We need to do sale as profit-wise guided, makes sense, we want to attract the right customer, not a promo intensive customer, and so why we also feel the pressure of the higher promotion intensity as explained by Martin. We can work with that pressure as we've done the last two quarters and will continue to do so for the remainder of this calendar year. And then, hopefully, we see a better environment and we are then in a perfect position because of the continued investments that we can afford with our financial position in technology and in distribution center. And to your last point, you're absolutely right. With this new distribution center in Leipzig, hopefully fully up and running by H2 of this fiscal year. We continue on our always outlined roadmap that in addition to warehousing in Germany. We will over the course of growth set up regional distribution centers and given that the U.S. has become the strongest driver for growth, the U.S. is the prime candidate for regional distribution centers.

Your next question comes from the line of Kunal Madhukar of UBS. Your line is open.

Hi. Thanks for taking my question. A quick one on the rest of the year. Wanted to understand, and maybe into fiscal ‘24, wanted to understand what your purchases are likely to be, because sales would be constrained by your strategy of being full price, being brand friendly. So if sales remains low, help me understand how we should think about inventory trends for fiscal ‘24 and how the purchase strategy kind of plays into that.

Martin, do you want to respond? Martin? Otherwise, I do.

Sorry, yeah. Sorry, I was on mute. Sorry about that. Obviously, happy to answer, Kunal. I mean, as stated last quarter, we have looked early at fall/winter ‘23 purchase commitments and adjusted where appropriate. I mean, right now, over 90% of fall/winter ‘23 has already been delivered. So we have a clear view on fall/winter deliveries and the -- I talked about that, the Spring/Summer ‘24 purchase commitments have been adjusted even stronger. And we also expect that from other players that they had reduced their Spring/Summer ‘24 purchase commitment significantly. And that is why we expect the promotional pressure in ‘24 to be significantly lower. And as I called out, yes, our days inventory outstanding are elevated at 302 days instead of our targeted 260 days. And we are managing to achieve that number again in the medium term. And we are very confident that this will enable us to pursue and remain constant focused on our strategy, as Michael called out, full price driven and attracting and retaining the right customer cohorts.

Great, thanks. And then as we look at the growth in the second half, and you called out top line growth in the 600 to 800 bips incremental over H2 of ‘23. So each, we get the 1Q, and 2Q the comp is so much easier. You should naturally see some acceleration from Q1 levels. But the comps in the second half are slightly tougher. What gives you the visibility or the confidence to be able to kind of talk about 600 to 800 bips growth acceleration versus...

Yeah, Kunal. Happy to answer that. The 600 basis points to 800 basis points growth acceleration was in relation to H1. So it was not that I'm targeting to surpass the H2 fiscal year ‘23 growth in H2 fiscal year ‘24, but if I look at H1 of fiscal year ‘24, and then obviously during the course of fiscal year ‘24, then obviously the top line growth will accelerate, so H2 compared to H1 over the prior year period. And that is, you can solve that equation, especially looking at our past performance. We are a double-digit growth company. What is holding us back is the current and in our perspective, short term with a short term focus, the effects that have a short term focus driven by access inventory in the market that is especially focused on calendar year ‘23 and then ’24 -- calendar year ‘24 starting with January, it will have a different perspective on the inventory in addition to the benefits of the two infrastructure topics that we completed and are now ramping up and will have full benefits in H2, fiscal year ‘24.

Got it. Thank you so much.

Thank you.

Your next question comes from the line of Blake Anderson of Jefferies. Your line is open.

Hi. Good morning. I wanted to ask on gross margin, apologies, if I missed it, but did you say how much margin expansion or contraction you're anticipating for gross margin next year? And then if you could talk about the gross margin expectations in Q1 as well, and maybe the trajectory, just looking for a little bit more color on that line item?

Yeah, I'm happy to do so. Gross profit overall and I -- in length talked about the gross margin definition and the influence obviously on the denominator, I mean on the gross on the GMV versus net sales effect, so gross margin may differ. But the overall logic of the gross profit of the absolute gross profit is that we guide that the gross profit growth -- absolute gross public growth is fully in line with our top line growth. This is the first and utmost important topic. And in Q1, if I guide towards a marginally negative EBITDA. EBITDA is always very much driven in our business model by the gross profit margin, so to say, or the absolute gross profit. So also in Q1, we expect a gross profit margin slippage that will lead to that marginally negative EBITDA. So gross profit is then in line with top line growth and deviations throughout the quarters that I called out just now. So it will fluctuate given also the seasonality of what I said about Q1 and Q3 being lower and Q2 and Q4 being stronger also on the gross profit margin side and the adjusted EBITDA margin.

Got it. And are you guiding an all-by region? Just wondering, how much you expect the U.S. region to -- the momentum there to continue next year, how that might be factored into your GMV expectations?

We're not guiding on certain regions, but we don't anticipate any dramatic changes. I mean, so as Michael called out, the U.S. will continue and has been in the last quarters and years a top growth region. China being spotty and a bit unclear how that will come back to normal levels. We are strong in Europe and we'll also see and target there double-digit growth rates. So the overall logic that we've seen in Q4 in fiscal year ‘23 is expected to continue more or less. Right now, the U.S. is very strong, but on the overall we don't see an immediate shift in what we have been seeing in the last quarters.

Your next question comes from a line of Abhinav Sinha of Societe Generale. Your line is open.

Yeah. Hi. Thanks for taking my question. Just one thing on the gross profit and on the inventory. So on the gross profit, you said that by calendar 1H ‘24, you expect the promotional activity to subsidize. So why do you guide a stable margin and not an expansion? So that's the first one. And second is on the inventory, I see that it was a more than EUR100 million drag on your cash flow. So how should we look at the inventory for 2024? So will it be back to the normal EUR250 million to EUR300 million level or any color on that will be very helpful. Thanks.

Yeah. Hi, Abhinav. Happy to take that. Can you hear me?

Yeah.

Yeah. Okay, sorry. On the inventory side, yes, I mean, we are being mindful of managing our inventory levels, not driven by short-term cash focus, but really thinking about attracting or retaining the right customer cohorts, thinking about brand relationships, but also obviously preventing undue inventory aging. And that implies that this will not change dramatically short-term. So we have elevated inventory levels, best measured in inventory days outstanding, 302 days, and we'll have to come back 260 days. We also called out that the inventory level that you point to is elevated because of early deliveries. So that will leverage out to the end of the season, but also that the prior year was obviously influenced by merchandise buyback programs and a unique stock reduction. Because if you look at the cash flow statement of last year, there was – I mean, despite the strong growth that we had last year, we had a positive cash inflow on inventory, so less inventory. So obviously there is a previous year effect in the growth of the inventory levels, if you just look at the share growth. And also bear in mind, yeah, 80% of the inventory is current upcoming seasons. And with our full price approach and high-end positioning, we are able to achieve sell-through rates over – healthy sell through rates over a much longer period, usually 95% over 21 months. So the inventory levels will continue to stay elevated. We are not managing that quarter-to-quarter but more on a medium-term outlook in a healthy way that is healthy for our positioning and our business model without hurting the P&L or our positioning.

Okay.

And on the gross profit margin there, I mean, we have to see how the gross profit margin will evolve in H2. So a clear guidance is, I called out in H1. But H2 is obviously also on the gross profit margin side better than H1. And we are very confident on seeing a positive trend there. How it will play out, we have to see. We are definitely standing true to our high end positioning, to our full price focus. And that is key in everything what we do.

Okay. And just to be sure, on the EBITDA, you said the 2H ‘24 will be 50 basis points to 150 basis points higher than 1H ‘24. Is that the correct understanding?

Exactly.

All right. Yeah. Sure. Thanks. Thanks, Martin.

Thank you.

And your last question comes from the line of Yawen Gao of CICC. Your line is open.

Thanks for taking my question. So my question is on AOV. Obviously, we achieve a very high AOV in fiscal ‘23, despite the promotional pressure. And I believe this was mainly due to the strong performance of the top customers. And also, they are increasing share of the [indiscernible] but in the future, maybe like say next year, as the micro environment turns around and other customers, including the aspirational customers come back, and also [Technical Difficulty] then more and more market share, the sales could maybe more balanced between the top customers and the others, therefore, which level of AOVs will expect over the long term? Just could you share any ballpark numbers with us and how will this impact our margin? Thank you.

Thank you for that. Yes, in principle, you have a correct argument, aspirational customers coming back will in the industry probably lower the AOV again. In our logic, number one, aspirational customer, we are unfortunately not, we're still some seasons maybe away from that. So our fiscal year ‘24 is not expecting sudden return of all our aspirational customers. And the continuous increase of our AOV has also been a reflection of our continuous focus of our whole assortment on the top end customer in terms of additional categories and additional more expensive items. So I think the trend of increasing AOV is our long-term objective in increasing our share of top end customers. Big return from aspiration customers may lower, slow down the increase, but we don't see a reversal coming. And in terms of margin, as we don't see a big, lower AOV in the next years, I don't see any impact of AOV or unit economics on our margin. On the contrary, with the huge investments in technology and the huge investments in infrastructure like the warehouse, we will actually continue to create more efficiencies, independent of AOV just by being much more productive in operating our business.

Got it. Thank you.

There are no further questions at this time. We thank you for participating in today's call. This concludes today's conference call. You may now disconnect.