LONDON — A toxic brew of rising interest rates, stubborn inflation and heightened promotional activity by its peers forced Mytheresa to warn its profits and sales growth will slow significantly in fiscal 2023.
The company said on Wednesday that despite the slowdown, sales will continue to grow in fiscal 2023, and the company will be profitable.
Shares plunged after the statement, falling 8.4 percent to $6.62 in late morning trading on the New York Stock Exchange. They ended the day down 15 percent at $6.15.
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In an unscheduled statement on Wednesday, Mytheresa said gross merchandise value in the 12 months to June 30 will grow 13 to 15 percent, landing between 845 million euros and 860 million euros.
That compares with a previous GMV projection of 865 million euros to 910 million euros, representing 16 percent to 22 percent growth.
Net sales growth for fiscal 2023 will now range from 750 million euros to 765 million euros, representing 9 percent to 11 percent growth.
Previously, net sales were set to range from 755 million to 800 million euros, with 10 percent to 16 percent growth.
In addition, adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, will be in the range of 34 million euros to 43 million euros. The adjusted EBITDA margin will now range between 4.5 percent and 5.5 percent.
That compares with an EBITDA projection earlier this year of 68 million euros to 76 million euros, and an adjusted margin of 9 percent to 9.5 percent.
Michael Kliger, chief executive officer of Mytheresa, said that despite the near-term headwinds, “which we regard as transitory, we remain confident in our strategy and mid and long-term goals. We will deliver profitable growth for the full fiscal year 2023 regardless of persisting macro headwinds and increasing promotional intensity in some geographies. This speaks to our unique positioning and resilient business model.”
The company added those macro-headwinds “continue to affect consumer sentiment,” and that “recent concerns over the financial sector, persistent inflationary pressures and increased promotional intensity by other players” are putting pressure on gross margins.
As reported in February, Mytheresa had already seen sales growth slow in the second fiscal quarter as “aspirational, occasional” customers put the stops on spending during the key holiday period, against a backdrop of higher inflation and economic uncertainty.
GMV growth in the second quarter was 7.8 percent compared with 20.8 percent in the first quarter. At the time, the company had confirmed its previous guidance for fiscal 2023, although it said those numbers would be at the “lower end of the given range” for both the top and bottom line.
At the time, Kliger argued that Mytheresa has shown “excellent financial strength and resilience” against a backdrop of economic and geopolitical challenges. “That sets Mytheresa apart from other digital platforms in the same period,” he added.
On Wednesday, Mytheresa also revealed its preliminary third-quarter figures, which are set to be reported in full on May 10.
In the third quarter ended March 31, Mytheresa expects to report GMV in the range of 218 million euros to 221 million euros, while net sales will fall between 196 million euros and 199 million euros.
Adjusted EBITDA for the three months will range from 2 million euros to 4 million euros.
It’s been a week of international marketing for Mytheresa, which on Wednesday unveiled the four exclusive capsule collections from its debut China Designer Program, part of a big push in the region.
The program, which was announced last fall, is meant to highlight a new generation of talent, and reflect Mytheresa’s ambitions in China and the Asia Pacific region.
Asia Pacific, which includes China, South Korea and Australia, represents 25 percent of the business.
In fiscal 2022, the company named Steven Xu president, China and APAC, and opened new offices in Shanghai. Mainland China GMV growth in that year rose by 22.5 percent despite regional COVID-19 lockdowns.
Earlier this week, during a trip to Dubai, Kliger said he believes that Mytheresa can double its business in the Middle East by putting a focus on high-end customers in Saudi Arabia.
“Today the region is 4 percent of our business. But when I speak about it, people say, ‘But it should be double,’ and I agree. For our brand partners, like the Cartiers and Van Cleefs, this region has always been a big focus,” Kliger told WWD.