Michael Kliger: Happy to take that. So, I mean, the logic of improvements in H2 on spring-summer is – spring-summer ’24 was the season that was bought when the slowdown in demand was present. Up to now, fall-winter ’23 was still bought back in October, November last year when it was not crystal clear where the market was heading. Spring-summer ’24, it was crystal clear where the market was heading. And we know that many platforms, many retailers, also because of cash constraints, took a much more conservative approach to spring-summer ’24. So while it is not easy to predict the demand for spring-summer ’24 given the uncertainties that Martin was talking to. It is crystal clear that there will be less merchandise in the market.
There will be less spring-summer ’24 merchandise in the market, which is a driver for more disciplined, more focus on full price instead of promotions. And your second question, of course, our ongoing efforts to a) focus on the top end, top customers b) focus on capsules, exclusive collections, focus on ready-to-wear. All of these efforts are exactly to allow us to compete not on price, not on discount, but to compete on units, on exclusivity, and combine that with superior service for our best customers. That is the approach that has allowed us to grow in the market where most people rank, has allowed us to still deliver solid results and not fall into big financial losses. But the current situation needs to be seen as the worst market conditions since 2008, 2009.
So this is really a test and we believe the numbers we are posting right now, the numbers we are guiding, are full evidence of the resilience of the business model. And the tough conditions out there, unprecedented at least for the last 10 years will or are a test for business models, and we believe our created multi-brand business model is performing much, much better than other business models, which are much more focused on aspirational customers, much more focused on endless aisle product choice. And that’s very important at the moment to understand that difference in business model, that difference in customer base we are focusing on, that difference in how we approach merchandising a product choice because that is the key differentiator that is the armor against the promotional intensity that is out there.
Oliver Chen: Happy holidays. Best regards. Thank you.
Operator: Your next question comes from the line of Ashley Helgans from Jefferies. Please go ahead.
Blake Anderson: Hi. Good morning. It’s Blake on for Ashley. I wanted to first ask about the US strength. You saw a top customer spend up there very nicely, around 56%. I was wondering if you could unpack the key drivers of this and then how you view that rate throughout the rest of the year, are those drivers sustainable?
Michael Kliger: I mean we do believe these drivers are sustainable, so we do believe we can continue to grow double-digit in US. As we have done for almost five, six quarters now consistently, the drivers for that is coming back to, we have a different go-to-market approach. We offer things others don’t, or at least don’t focus on. We have a very curated offer. We’re focusing very much on the high end. You look for product on our website. You’re not confused, distracted by products at very low price points with brands that are not in your [indiscernible]. We are very much focusing on inspiration and we offer products which last just in this quarter. I mean, we had exclusive product with Brunello Cucinelli, one of the best performing brands.
We had exclusive product with Loro Piana, one of the best performing brands. We offer our customers uniqueness, and that is what seems to resonate very well with the US consumer. And we will continue to do that and will, of course, continue to build market presence. This four-week presence was a pop-up in East Hampton for a multi-brand retailer gave us a unique access to high-end customers. We clearly see that this resulted in acquiring new customers and getting into new customer cohorts. And as of next week, we will start again with experiential pop-up, the Holiday House in LA, again, something very unique, something that underlines our focus on emotional inspiration created offers and we will continue exactly on that track with our great US team with our great personal shoppers based in the US.
We do see that this can be sustained against the US competitors.
Blake Anderson: That’s helpful. And then a model question. I know you mentioned you expect positive EBITDA margin in the second quarter. Did you say where you think gross margins could shake out in Q2 as well?
Martin Beer: We don’t guide for gross margin in the immediate quarter and we usually don’t also give quarterly guidance, but in this exceptional situation we wanted to at least lead you a bit to the next quarters, how they evolve, especially while the second half of fiscal year ’24 is driven by a significant improvement in the gross profit margin due to what Michael referred to given the different buy in the spring-summer ’24 season.
Blake Anderson: Got it. Thank you very much.
Operator: Your next question comes from the line of Kunal Madhukar from UBS. Please go ahead.
Kunal Madhukar: Hi. Thanks for taking my questions. One, when we’re talking about the top customers, can you talk about what percentage of GMV do the top customers represent and how is that different from fiscal 1Q’23? And then in terms of AOV, how was AOV for top customers versus AOV for non-top customers? How did that kind of perform on a year-over-year basis?
