LUXE (LUXE) Q1 2026: MyTheresa Drives 12% Growth as Transformation Cuts SG&A by 15 Million
LUXE’s first quarter marked a decisive pivot, with MyTheresa’s double-digit expansion offsetting deliberate contraction in off-price and a disciplined SG&A cost reset across all segments. The group’s transformation plan is actively reshaping its cost base and portfolio, with the Outnet divestiture and new leadership accelerating operational focus. Guidance holds steady as LUXE leans into its digital luxury core and signals further profitability gains through ongoing execution.
Summary
- MyTheresa Outperformance: Premium segment growth and margin expansion reinforce LUXE’s digital luxury positioning.
- Transformation Momentum: SG&A reduction and Outnet divestiture streamline cost structure and sharpen segment focus.
- Profitability Pathway: Management reiterates break-even and margin targets as operational execution drives sequential improvement.
Performance Analysis
MyTheresa, LUXE’s flagship full-price luxury platform, delivered standout results with net sales up 12.2% and gross margin expanding 70 basis points, driven by a 10.2% increase in top customer base and 15% higher average spend per top customer. The U.S. market, now 23% of segment sales, grew nearly 22%, underlining successful penetration into a critical geography. Europe (ex-Germany) also posted robust 14.1% growth, reflecting broad-based demand strength among high-value clientele.
In contrast, Net-A-Porter and Mr. Porter remain in commercial turnaround mode, with net sales down 10.8% as legacy underinvestment in merchandise weighed on top-line. However, key quality metrics—such as a 15.5% increase in average order value and a 130 basis point gross margin improvement—signal healthier business fundamentals. The off-price YOOX business saw a 16.5% sales decline due to an intentional focus on profitable core markets and the exit of unprofitable channels, but gross margin rose 400 basis points as destocking and mix shift took effect.
- Cost Discipline Emerges: SG&A expenses across the group fell by 15 million euros in ex-YNAF segments, demonstrating early traction in the transformation plan.
- Cash Burn Seasonality: Operating cash flow was negative, reflecting inventory buildup and one-time restructuring, but normalized cash burn was contained at 40 million euros.
- Balance Sheet Strength: LUXE ended the quarter with 460 million euros in cash and minimal bank debt, supporting ongoing transformation investments.
Group net sales declined 4.2% year-over-year, reflecting the deliberate contraction in off-price and legacy luxury, yet the quality of revenue and profitability metrics improved, especially in the premium MyTheresa segment. The Outnet divestiture will further clarify segment reporting and cost allocation in future quarters.
Executive Commentary
"We are extremely pleased with the outstanding results in the first quarter of fiscal year 2026. The ongoing and even accelerating momentum in the previous quarters demonstrates the strength of our business model, which focuses on wardrobe building, big spending, luxury customers."
Michael Plieger, Chief Executive Officer
"It is quite noteworthy that already in Q1, so July, August, September, just a couple of months after closing, we were able to decrease SG&A costs by minus 15 million if you combine the two ex-YNAF segments of the quarter in comparison to the prior year quarter. We are obviously front-loading a lot of pain, a lot of adjustments that we need to do."
Martin Beer, Chief Financial Officer
Strategic Positioning
1. MyTheresa as Digital Luxury Engine
MyTheresa, LUXE’s digital-first luxury retail platform, is the group’s anchor for profitable growth, leveraging exclusive brand partnerships, high-impact campaigns, and premium customer experiences. The segment’s focus on full-price selling and wardrobe-building for high-spending clients has created a virtuous cycle: luxury brands grant exclusives, top customers spend more, and gross margins expand. The U.S. market is a particular area of strength, now representing nearly a quarter of segment sales.
2. Net-A-Porter and Mr. Porter Turnaround
Legacy luxury banners Net-A-Porter and Mr. Porter are in the early stages of a commercial and operational reset, with new leadership prioritizing full-price sales, editorial inspiration, and brand discovery. While top-line remains pressured by prior underinvestment, improved customer spend and gross margin indicate the turnaround is taking hold. The goal is to return to growth in the second half and reach MyTheresa-like profitability (7-9% EBITDA margin) over the medium term.
3. Off-Price Rationalization and Outnet Divestiture
LUXE is significantly reducing complexity and cost by divesting the Outnet and refocusing YOOX on its most profitable geographies and customer cohorts. The sale, expected to close in Q1 2026, will eliminate low-margin, high-complexity operations, allowing management to direct resources toward core luxury segments. The off-price business is now managed for margin rather than growth, with SG&A and fulfillment models tailored to lower average order values.
4. Transformation Plan Execution
The group’s transformation plan is delivering early results in SG&A reduction, inventory optimization, and platform integration. New reporting structures, unified finance, and targeted cost center accountability are laying the groundwork for sustainable profitability. Management is clear that improvements will be sequential, not front-loaded, with a focus on continuous operational and commercial enhancement.
5. Capital Allocation and Balance Sheet Health
LUXE’s strong liquidity and low leverage enable it to fund transformation initiatives and absorb near-term operating cash burn. The company expects cash outflows related to restructuring and inventory to moderate as the year progresses, with break-even targeted within 24 to 30 months. Access to additional revolving credit facilities provides further flexibility.
Key Considerations
LUXE’s Q1 reflects a company in active portfolio and operational transition, balancing growth in digital luxury with decisive action to streamline its cost base and exit legacy distractions. The transformation plan is front-loading pain to position the group for sustainable, high-quality growth.
Key Considerations:
- Premium Segment Drives Value: MyTheresa’s growth and margin gains validate the group’s focus on high-value, full-price luxury customers.
- Turnaround Still in Early Innings: Net-A-Porter and Mr. Porter show improved metrics but remain loss-making, with break-even targeted for FY27.
- Off-Price Complexity Unwinding: The Outnet divestiture and YOOX reset will clarify segment economics and reduce operational drag.
- SG&A Efficiency Key to Margin Expansion: Early SG&A reductions are promising, but further cost discipline and IT integration are critical for medium-term targets.
- Geographic Diversification Accelerates: U.S. and Europe (ex-Germany) are now the main growth engines, while Asia remains subdued but stable.
Risks
Execution risk remains high as LUXE navigates simultaneous turnarounds, complex divestitures, and integration of new leadership teams. Macroeconomic softness, especially in discretionary luxury, and potential delays in realizing SG&A savings could pressure margins. The U.S. tariff environment and ongoing restructuring costs introduce further uncertainty, while legacy banners must prove they can return to growth and profitability as planned.
Forward Outlook
For Q2, LUXE guided to:
- Continued double-digit growth at MyTheresa, with margin discipline maintained
- Net-A-Porter and Mr. Porter stabilizing in H1 and returning to growth in H2
For full-year 2026, management maintained guidance:
- Group GMV of 2.4 to 2.7 billion euros
- Adjusted EBITDA margin in the range of minus 2% to plus 1%
Management emphasized ongoing transformation as the key performance driver:
- SG&A cost ratio reduction remains the primary lever for margin improvement
- Outnet sale and back-end disentanglement to accelerate cost and focus benefits
Takeaways
LUXE’s Q1 demonstrates that disciplined execution and portfolio focus are beginning to pay off, with MyTheresa’s premium positioning offsetting legacy drag and transformation costs.
- Quality Over Quantity: Revenue mix is improving as low-margin, high-complexity businesses are exited and premium segments expand.
- Transformation on Track: Early SG&A and gross margin gains support management’s confidence in medium-term profitability goals.
- Watch for Turnaround Proof Points: Investors should monitor Net-A-Porter and Mr. Porter’s ability to return to growth and the pace of SG&A leverage in coming quarters.
Conclusion
LUXE’s first quarter validates its transformation strategy, with MyTheresa’s growth and cost discipline setting a benchmark for legacy banners to follow. The group’s pivot away from off-price complexity and toward premium digital luxury is clear, but successful execution across all segments remains crucial for sustained value creation.
Industry Read-Through
LUXE’s results underscore a broader industry pivot toward digital, full-price luxury retail, with customer experience, exclusivity, and cost discipline as key differentiators. The Outnet divestiture and focus on premium customers highlight a sector-wide move away from low-margin, high-complexity channels. Competitors in both luxury ecommerce and off-price should expect continued consolidation and rising barriers to profitable scale, especially as macro softness persists and digital-native models outpace legacy platforms in both growth and margin resilience.