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Mytheresa CEO on luxury spending: 'Our basket has gone up'

Mytheresa CEO Michael Kliger joins Yahoo Finance Live to discuss company earnings, consumer demand, luxury spending, and the outlook for profit growth.

Video Transcript

- Shares of online luxury retailer Mytheresa are on the move after better-than-expected earnings. Company saw double-digit growth in the fourth quarter driven by gains in the gross merchandise value of goods. Let's check in with Mytheresa CEO Michael Kliger. Michael, always great to get some time with you. I thought retail was slowing down. How do you explain your results?

MICHAEL KLIGER: Well, two reasons. One is we are online so we benefit from the continuous shift of consumers in luxury moving online. And then we benefited in the last quarter enormously from our customers, our high-end luxury customers, buying for vacation. And it seems they did double and triple vacation. We had an extraordinary business with swimwear, vacation wear, and thus we had plus 18% in the last quarter, which drove a plus 21% GMV for the full fiscal year.

- And so for the growth that you're looking out into the future for-- I mean, what are you what are you hearing from your customers at this point in time? And where are they kind of putting their dollars to work and expecting more value from that experience with Mytheresa?

MICHAEL KLIGER: Thank you for saying at this point in time. We are in quite fluid times, but when we speak to our customers they generally are now ; looking, coming back from vacation, to buying into festive wear, into work wear. I mean, there's really a back-to-business mood in our customer base, which is a special customer base, and there seems to still be a quite significant pent-up demand for social events, for weddings, for bar mitzvahs, you name it. The social calendar seems to be really full until end of this calendar year.

- Michael, are you seeing anything at the margins that shows any kind of change in consumer behavior? In other words, have volumes gone down at all? Are people buying fewer items but maybe they're being more selective about what they're buying? Are they buying-- And I know most of your price points are relatively elevated, but are you seeing any distinguishing based on price on the platform?

MICHAEL KLIGER: We have seen a trend, may seem a bit counterintuitive, but actually our basket has gone up in the last 12 months. Our basket has gone up by more than 5%. Not because of more items but customers tend to buy even more luxury items, more timeless luxury items. So the types of items they buy are at a higher price point. And so we have seen that. And, as often quoted, we have seen inflation in the luxury sector, particularly on bags, without any impact so far on the demand side, but prices have gone up in luxury.

- Michael, we've seen a lot of discounting start to happen in retail. We were just talking to Etsy's CEO Josh Silverman about this. He's seeing more discounting amongst the Sellers on his platform. Do you think that discounting will start to hurt luxury plays into the holiday season?

MICHAEL KLIGER: I mean, discounting is always the outcome of too much stock in the market. And that can be driven by lessening demand. We don't predict this at the moment. And the other thing is too much stock being in the market. And I actually, by what we see, stock available in the market is at a reasonable level. So our current prediction is for fall/winter, for the winter sale starting in December, that we will look at "normal, quote, unquote, discount levels. So unless demand really reduces, we actually don't think we will have a very pronounced discounting winter. Looking at a global level. I mean regionally there are differences.

- This year you had pent-up demand for, I mean, some of the items that would be sold because of so much of the prominence of wedding seasons, weddings that were delayed moving over into 2022. You had the return to office in many facets. You had even more of a concerted return to some campuses if you were seeing purchases there from customers. And so what would the year-over-year comps start to normalize at as you get into next year and some of the forecasts there?

MICHAEL KLIGER: I mean, that depends by geography. So in the US we will sort of lap this back to normality in the next three months. In Asia, we have, particularly in China, we actually have seen for the last 12 months an even more difficult situation as the sort of fortunes of COVID have turned around in that region. While we have come out in that region, I mean, lockdowns have come back, and so you could actually expect there that as they overcome the lockdowns, depending on the speed of vaccination programs in the next six, 12 months, that they will have sort of return to normal.

And in Europe, of course, what we saw in the beginning of this calendar year was clearly the impact of outbreak of war in Ukraine. That has diminished as an effect. I mean, we really had a sort of tough March because sentiment was so negative. We have continuously improved since April, but that trough in demand we will lap, of course, next March. So different developments.

We don't see any diminishing demand in the US. The US has been one of the best luxury goods market for the last almost now 12 months. And so overall, as also evidenced by our guidance of 16% to 22% GMV growth for the coming fiscal year, we are quite optimistic, despite the debatable uncertainties out there.

- All right, survey says right now more hot pink SKUs that might need to come online. Mytheresa CEO Michael Kliger joining us here. Thanks so much for the time.