📉 Sales Growth and Profit Challenges
In 2024, Mytheresa reported net sales of €840.9M, reflecting a 9.8% increase compared to the previous year. While this growth beat the luxury industry trend, the company's gross profit margin dropped to 45.7%, down from 49.6% in 2023. This decline in profitability resulted in a 6% decrease in the company’s stock price by market close on September 12, 2024. CEO Michael Kliger explained that an oversupply of products and higher discounting led to lower margins and slower growth in the first half of the year.
📈 Future Sales Projections
Looking ahead, Mytheresa expects sales to grow between 7% and 13% in 2025, with an adjusted EBITDA margin ranging from 3% to 5%. The company's Q4 sales increased by 9.7% year-on-year, with a significant recovery in the second half of the year, showing a growth of 13.8%. The company’s focus remains on rebalancing inventory levels and capturing market share from competitors as the luxury retail market consolidates.
🛍️ Strategic Market Positioning
Despite challenges, Mytheresa aims to strengthen its market position by focusing on high-spending customers. The luxury retailer has seen growth in its top customer base, which now represents 39.2% of its total business. CEO Kliger emphasized the importance of building relationships with big spenders who feel underserved by other luxury retailers. This strategy is evident in the company's VIP events and exclusive collections, which continue to attract top clients.
🇺🇸 Expanding Global Footprint
The U.S. market has become increasingly important for Mytheresa, now accounting for 20% of its annual sales. In 2024, sales in the region grew by 25%, with strong performances in key states like New York and California. Europe remains another target market, where Q4 sales grew 7.2%. Mytheresa is also investing in China, though CEO Kliger cautions that recovery there will take more time. The company is optimistic about its global growth prospects, driven by its focus on customer satisfaction and unique VIP experiences.
Can Mytheresa maintain its sales growth despite falling profit margins?
