MYT Netherlands Parent B.V. (MYTE) Q3 2021 Earnings Call Transcript

MYT Netherlands Parent B.V. (MYTE -0.52%)
Q3 2021 Earnings Call
May 18, 2021, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the Mytheresa third-quarter fiscal 2021 earnings conference call. [Operator instructions] It is now my pleasure to introduce your host for today, Martin Beer, Mytheresa's chief financial officer. Thank you, sir. Please go ahead.

Martin Beer -- Chief Financial Officer

Thank you, operator and welcome, everyone to Mytheresa's investor conference call for the third quarter of fiscal-year 2021. With me today is our CEO, Michael Kliger. Before we begin, we would like to remind you that our discussions today will include forward-looking statements. Any comments we make about expectations are forward-looking statements and are subject to risks and uncertainties, including the risks and uncertainties described in our quarterly report.

Many factors could cause actual results to differ materially. We are in no duty to update forward-looking statements. In addition, we will refer to certain financial measures not reported in accordance with IFRS on this call. You can find reconciliations of these non-IFRS financial measures in our earnings press release, which is available on our investor relations website at investors.mytheresa.com.

I will now turn the call over to Michael.

Michael Kliger -- Chief Executive Officer

Thank you, Martin. Also, from my side a very warm welcome to all of you, and thank you for joining our call today. I am delighted to share with you that the third quarter of fiscal-year 2021 was one of the strongest quarters we ever had, both in terms of financial as well as operational performance. We again achieved many records across all areas of our business.

We clearly continued to benefit from the shift in consumer shopping behavior toward digital, which shaped the strong results of the third quarter. Even taking into account the lower comparables of Q3 and fiscal-year 2020, the accelerated growth is evidenced by the two-year growth rate of 66% in the third quarter versus the two-year growth rate of 60% for the second quarter of fiscal-year 2021. While we continue to benefit from store closures in many markets as well as better deliveries versus last year in March, we also saw the positive effects of a rapidly improving consumer sentiment as customers begin to prepare for post-pandemic occasions such as social events and vacations. Let me start my strategic review by clearly stating that our positioning as a curated multi-brand luxury platform gives us both strategically and financially, a fantastic position to capitalize, both on the short-term as well as long-term growth opportunities in our market.

Our success continues to be based on a sharp luxury customer focus, strong brand partnerships and a focused profit-making business model. Strategically, the most important driver for our business is the continued shift of consumer demand from off-line to online, also in luxury, which has been significantly accelerated over the last 12 months. We believe this trend will continue, maybe at a slower pace in the post-pandemic world but it will continue. In fact, a recent research by McKinsey stated that there is little reversal to traditional off-line retail expected in fashion.

The second most important driver for our business is the strong appeal and desire by customers for multi-brand offers. Recent Alexa rankings show the popularity in terms of traffic and site duration of multi-brand offers in luxury. Furthermore, we believe that our focus on a highly curated multi-brand offer attuned to the big spending wardrobe-building customer segments will continue to provide us with the best customer base, which is very difficult to attract with a pure mono-brand offer. Finally, we believe that our focus on profit-making business model is perfectly aligned for any future developments.

We have consistently delivered stable gross margins on the basis of a high full-price share and very little dependency on promotional activities. The majority of our cost base is fully variable, and we continue to prove our ability to reduce customer acquisition costs. This, put together, allows us to scale rapidly with solid profitability. Now, let me call out some of the business highlights of this past quarter for you.

First of all, we continue to make significant progress in our global expansion. We grew across all geographies with plus 47% in net sales compared to Q3 of fiscal-year 2020, but I want to highlight the outstanding growth in the United States with a 76% increase in net sales over the previous year period. The United States had a share of 13% of group net sales in Q3 of fiscal-year 2021, and we believe that there is still significant headwinds. We have recently announced the appointment of Heather Kaminetsky as new president of North America for Mytheresa as of June 1, 2021.

Heather will build out her team in the United States to increase our brand awareness and our local accessibility for customers. Second, we have significantly expanded our LTM active customer base by 34% year over year to 621,000. This was again fueled by exceptional new customer growth. We actually beat our record of first-time buyers in Q3 of fiscal-year 2021, surpassing the Q2 number of over 100,000.

We have always stressed that the quality of new customers acquired is, for us, the most important indicator for healthy growth and there was some debate whether the new cohorts are of lesser quality. We are thus very satisfied to report that all cohorts of new customers acquired in Q2 of fiscal-year 2021 show the same or even better repurchase rates by up to 20% in the third quarter compared to the Q2 cohorts of fiscal-year 2020 and their behavior in Q3 of fiscal-year 2020. Furthermore, not only did we significantly acquire high quality of new customers, we also saw a significant uptick in the average spend per customers, with our top customers achieving a 10% increase in average spend year over year in Q3 of fiscal-year 2021. Third, we have always stressed that we rely and invest in outstanding brand relationships.

We were again honored with outstanding support and trust from our brand partners in Q3 of fiscal-year 2021. We launched exclusive collections and styles as well as executed three launches with brands such as Burberry, Bottega Veneta, Marine Serre x Jimmy Choo, Simone Rocha, Totême, The Attico and Loewe. The capsule collection of Marine Serre x Jimmy Choo was the very first time we brought together two designers to create exclusive product for Mytheresa. Finally, we also want to mention that we launched Dior Eyewear on our website in Q3 and ran a highly covered campaign called We Love Italy, together with the Italian Trade Agency, showcasing the design and craftsmanship of Italian luxury brands.

While we were not able to execute any physical events in Q3, we nevertheless held digital events with the designers of Roger Vivier, Johanna Ortiz, Simone Rocha and Repossi for our top customers. Fourth, we demonstrated again, in the third quarter, the consistency of our operations and performance. We maintained business continuity across all operations with a focus in health and well-being of all Mytheresa employees as top priority during the third wave of the pandemic in Germany and across Europe. This highly correlates with the significant increase in customer satisfaction measured internally with a Net Promoter Score of 86% in Q3 of fiscal-year 2021.

We further decreased our customer acquisition costs, achieved stable average order value and declining return rates from our womenswear department. And all our cost margin ratios showed strong stability, if not even further improvements. Also, we demonstrated again our ability to achieve rapid growth with little reliance on promotional activities as evidenced by our stable operational gross margin in contrast to some of our competitors. With all the above, it should come as no surprise that we are very confident to continue to benefit in the fourth quarter from the ongoing shift to online, improving customer sentiment and much improved deliveries versus the fourth quarter and fiscal-year 2020.

And now, I hand over to Martin to discuss the financial results and guidance in detail.

Martin Beer -- Chief Financial Officer

Thank you, Michael. I will now review the financial results for the fiscal third quarter and I'll provide additional detail on some of the key topics previously mentioned. Unless otherwise stated, all numbers refer to euro. As Michael highlighted, we are very pleased with our performance during the third quarter clearly above expectations where we delivered strong net sales growth due to robust new customer growth and strong existing customer core performance.

With our proven business model, we could scale significantly in the third quarter without any compromise on the quality of our profits. During the third quarter, net sales increased by 53 million or 47.5% year over year to 164.8 million. We continued to see strong customer engagement and retention as our active customers, who shopped with us in the last 12 months, grew by 34.1% to 621,000, and our total orders shipped in the last 12 months increased by 32.3% to 1,384,000. Cost of sales increased by 30.6 million or 49.5% compared to the prior-year period, driven by our strong growth in total orders shipped.

As a percent of net sales, cost of sales increased slightly at 56.1% in the third quarter compared to 55.3% a year ago. Gross profit of 72.4 million. It was an increase of 22.4 million or 44.9% year over year. Gross profit margin of 43.9% declined slightly compared to the prior-year period of 44.7%.

Gross profit margin in Q3 was slightly below previous year due to seasonal shifts between quarters. For the full fiscal year, a stable gross profit margin is expected. Shipping and payment costs grew by 6.1 million to 19.3 million, driven by an increase in total orders shipped. As a percentage of net sales, shipping and payment costs in this quarter remained stable at 11.7% despite continuing internationalization.

We continue to drive efficiency in our marketing spend. In the third quarter, marketing expenses increased by 36.4% to 22.1 million. As a percentage of net sales, marketing expenses decreased to 13.4% from 14.5% in the prior-year period. Some of these increased marketing efficiencies are driven by the tailwinds from the COVID pandemic as well as restrictions on public events and campaign productions.

We are hopeful to execute more marketing events and campaigns in the remaining fiscal year and next year. Selling, general and administrative expenses grew by 60 million to 80 million, predominantly driven by onetime granted share-based compensation expenses for new granted awards related to the IPO. We adjusted a net effect of 56.6 million in relation to these onetime granted share-based compensation expenses as we do not consider them to be indicative of our core operating performance and as they relate to the IPO transaction. Excluding this adjustment and 3.3 million IPO preparation and transaction costs, SG&A expenses as a percent of net sales decreased for the three months ended March 31, 2021, from 15.9% to 12.3% due to weak top-line performance in Q3 fiscal-year 2020 and despite ramp-up of public company costs.

Adjusted EBITDA was 11.1 million as compared to 3.1 million in the prior-year quarter. This is driven by an exceptional strong top line, marketing cost efficiencies and SG&A cost leverage. The adjusted EBITDA margin expanded by 400 basis points to 6.8% of net sales. Adjusted EBITDA in this quarter only excludes the onetime granted share-based compensation of 56.5 million and 3.3 million IPO preparation and transaction costs.

Depreciation and amortization expenses were constant compared to the prior-year period at 2 million. Adjusted operating income grew by 7.9 million to 9.1 million. Adjusted net income was 4.5 million as compared to an adjusted net loss of 0.1 million in the prior-year period. Including the onetime granted share-based compensation expenses, the IPO preparation and transaction costs and finance expenses on shareholder loans and therefore, unadjusted, we incurred a net loss of 50 million as compared to a net loss of 6.7 million in the prior-year period.

We continue to focus on delivering profitable growth, which remains clearly visible in our very simple and transparent P&L with only minor and easily comprehensible adjustments. We've always operated a high-growth and profitable business model. EBITDA, adjusted EBITDA, adjusted operating income and adjusted net income are non-IFRS measures. Moving to the cash flow statement.

During the nine months ended March 31, 2021, operating activities used 39.8 million in cash and cash equivalents, primarily driven by a 63.4 million increase in inventories and a 10.5 million decrease in trade and other payables as well as 3.9 million decrease in other liabilities, and a 2.5 million increase in other assets. The increase in inventories is in line with our exceptional sales growth and is in anticipation of continued strong sales, while trade and other payables decreased as a result of payment timing for inventory purchases. In terms of liquidity, we ended the quarter in a strong financial position with cash and cash equivalents of 56 million and total unused availability under the revolving credit facilities of 90 million as of March 31, 2021. In Q3 of the fiscal-year 2021, we also used the 283.2 million net proceeds from the IPO to fully repay our shareholder loans of 171.8 million and are now completely debt-free.

Turning now to our expectations for the current fiscal year ending June 30, 2021. While we believe we have been benefiting on the top and bottom lines from COVID-related tailwinds due to store closures and restrictions in several regions of the world, we see very positive trends on new customer quality and existing customer cohort behavior as well as positive effects from earlier fall, winter '21 deliveries. In our fiscal Q4, we expect these trends to stay strong. Therefore, we raised our full fiscal-year '21 net sales expectation to a range of 600 million to 605 million.

This translates into a year-over-year growth of 33% to 35%. Regarding adjusted EBITDA, we expect to finish the full fiscal-year '21 between 55 million and 59 million and therefore, at an adjusted EBITDA margin between 9.1% and 9.8%. We believe that the fundamental shift in the market to an increasing online share of luxury shopping will continue, maybe on a slower growth rate. For the longer term, we thus are sticking to our targets of low to mid-20s net sales growth and stable adjusted EBITDA margins of around 7% to 9%.

I will now turn the call back over to Michael for his concluding remarks.

Michael Kliger -- Chief Executive Officer

Thank you, Martin. We are truly delighted with the strong third-quarter earnings report, which was above our expectations. We see ourselves perfectly positioned to take advantage of the short-term opportunities in the market. That is the strong shift to digital and the better deliveries by brand partners.

We have thus raised our guidance for the full fiscal-year 2021. But we also continue to see ourselves perfectly positioned to take advantage of the long-term opportunity in the market. We believe that the positive trend toward multi-brand digital platform will continue, maybe at a lower pace, but it will continue in the post-pandemic world and therefore, we continue to see strong growth ahead of us with 22% to 25% per annum and with a stable EBITDA margin. And with that, I'd like to ask the operator to open up for your questions.

Questions & Answers:

Operator

[Operator instructions] Your first question comes from Kimberly Greenberger from Morgan Stanley. Your line is open.

Kimberly Greenberger -- Morgan Stanley -- Analyst

OK, thank you so much. Fantastic quarter. Congratulations. I think this is your debut quarter.

Obviously, we got the December quarter earlier, but really really nice results here. I wanted to ask about what you're seeing here in the fourth quarter in markets that are reopening or that are fully open. For example, I think the U.K. shops have now been open for about five weeks.

Is there a read that you can extract there from the way that you're seeing spending shift? If luxury spending, for example, is going back to the shops, how is your business performing in that market? I'm just wondering, as you're sort of watching your pre-open, if you can give us any color on how your business is ebbing and flowing through that.

Michael Kliger -- Chief Executive Officer

Sure, Kimberly. Happy to do so. As just commented, what we have seen over the last couple of weeks and particularly also already in Q3 is that, on the one hand, the shift to digital, there seems to be a permanent shift in behavior. So while we may not see that acceleration going forward and see the shift to digital at a lower pace, I think we believe the overall judgment is the shift to online is a permanent shift in consumer behavior.

And the second element of what we saw and see at the moment is that -- so if there was always the positives about pent-up demand, there is significant pent-up demand for event clothing, vacation clothing, bridal clothing and I believe the whole sector is profiting from that. So stores benefiting from that as they open but also us. And so what we currently view and therefore, what we extrapolate as from the behavior of Q3 and to our fiscal-year guidance, which end in June that this shift to online, but also this positive consumer sentiment is clearly also driving our Q4.

Kimberly Greenberger -- Morgan Stanley -- Analyst

That is really, really encouraging. Just a quick follow-up on that. Do you feel like your inventory is well positioned for the reopening -- for the pent-up demand that you're seeing? Or are you able to chase into any styles? And then, as we think about sort of medium-term growth over the next one or two years, should we look at the, let's say, 60% two-year stack growth that you saw, for example in fiscal second quarter and think about that as a good guidepost for the upcoming year? Or I'm not sure if you have any sort of color, preliminarily, that you would like to share with us on how you're thinking about revenue growth in the upcoming year as you're lapping what has just been an absolutely astounding year this year.

Michael Kliger -- Chief Executive Officer

Will try my best, Kimberly, still we are very much deep into the current fiscal year as we still have a couple of weeks to go. Regarding chasing inventory, that's too late in our high-end luxury world. Inventory has to be secured much more in advance. But nevertheless, we feel we're very well prepared for those shifts because we always continue to buy without an assumption that we will never come back.

We always -- for winter buy coming in, our teams were buying on the basis of we will be back into a world where social events will take place, where weddings will take place. So we continue to buy with that attitude, of course, not being able to predict precisely when the vaccination rates will be of sufficient level. But we feel well prepared for this rebalancing, back to high heels, to dresses and so we should be able to take advantage and benefit from this renewed spending on those categories. Going forward, our best view is that the last 12 months have really created a new base, a new base because we pushed a bit the fast-forward button in terms of online share growth.

And so this is -- we don't predict a reversal. We predict that we will go from that base onwards with a healthy growth rate of mid-20s as the medium-term view. Next 12 months, that we will maybe still have impacts of COVID, hopefully not. In worst case, yes.

But the long-term view is absolutely rock solid, mid-20s, 22%, 25% growth every year with strong profitability. We are absolutely confident to deliver that.

Kimberly Greenberger -- Morgan Stanley -- Analyst

Fantastic and good luck here.

Operator

And your next question will come from Matt Boss from J.P. Morgan. Your line is open.

Matt Boss -- J.P. Morgan -- Analyst

Thanks and congrats on a nice quarter.

Michael Kliger -- Chief Executive Officer

Thank you.

Matt Boss -- J.P. Morgan -- Analyst

So maybe as a follow-up on the top line. Michael, could you maybe just elaborate or speak to drivers that you believe fueled the 600 basis points two-year stacked improvement relative to last quarter? And that's despite brick-and-mortar reopening. And then, I guess with that, just as we look forward, have you seen any notable step-downs in the stacked growth rate, 4Q to date, that would support the lower implied two-year stack in the fourth quarter that you've embedded in the guidance? Just maybe any puts and takes that you've embedded in that fourth-quarter revenue forecast I think would be helpful.

Michael Kliger -- Chief Executive Officer

Sure. I mean the pandemic still makes predictions a very tough job, but as always, we want to be transparent in our thinking, at least. I'm not claiming we know exactly how the future plays out. So the strong growth of Q3 really showed that, in addition to another record number of new customers, we also saw a significant uptick in average spend of existing customers, which was an additional element that drove the extra performance of 66% as a two-year growth rate.

In that, we really tie back to the improving sentiment and the clear expectation of being back in the public, be it vacations, be it bridals and so forth. So that's something, which we clearly expect to continue that as even more vaccination rates happen that this positive view on needs and occasions to buy clothing is definitely a trend that will continue to be so. The drive or the positive driver of new customers coming to online, we still assume that there is a component of tailwind in this as closures and lockdowns are relaxing, but maybe some customer segments certainly feel a bit shy of going back into stores and department stores. So there is probably still a component where we could and should expect a bit of a lower rate of increase in online share than what we have seen, as I called it, fast forward over the last two years.

But it is a trend to stay. It is a base to start from. So we continue to believe we will see significant uptick in spend. We continue to believe we will acquire significant new amounts of new customers, maybe at a lower rate compared to what we did to 12%.

And therefore, what we are predicting is a super strong Q4 in terms of our full year guidance which is of course an implied guidance also in Q4, but at a slightly lower pace.

Matt Boss -- J.P. Morgan -- Analyst

Great. And then, maybe just a follow-up on the gross margin. Martin, could you just break down drivers of gross margin in the third quarter? And just any puts and takes or how best to think about the development of gross margin in the fourth quarter?

Martin Beer -- Chief Financial Officer

Yeah. Sure. Sure, Matt. The gross margin is a bit slower completely due to seasonal shifts between the quarters also related to IFRS.

We have on the 9-month development, our 20 basis points below the previous year figures. And as I said in the call in the preceding section that we clearly target and expect toward at least a fully stable gross margin for the full fiscal year.

Matt Boss -- J.P. Morgan -- Analyst

Great. Best of luck.

Operator

And your next question will come from Oliver Chen from Cowen. Your line is open.

Oliver Chen -- Cowen and Company -- Analyst

Hi. Thank you. Michael, the U.S. opportunity sounds pretty substantial.

What are your thoughts on what's ahead with local access and what could be very positive for you? Also, if you could update us on the pipeline ahead for China and key priorities there in terms of strategy and how it may or may not be different from your existing approach to marketing and awareness and distribution? Thank you.

Michael Kliger -- Chief Executive Officer

Thanks, Oliver. Sure. I fully agree. We do see a significant potential in the U.S.

with our current share of 13% in the total group net sales. We firmly believe there's significant headroom. And therefore, as explained in previous calls, we are increasing the investment in terms of adding resources to the U.S. market.

We have announced recently the appointment of Heather as the new president of Mytheresa North America. And in her leadership role, one of her core task is to increase the number of local personal shoppers being available to our local customers, orchestrating and organizing brand awareness campaigns, orchestrating and organizing customer events on the ground in the U.S. We continue to see very good traction with customers that buy, very high satisfaction rates of customers that buy. So the bottleneck is really bringing customers for the first time onto the platform and that's what she and her team will focus on.

And as she starts on June 1, I mean she will already join a running and a high-velocity ship, but we firmly believe and we are very excited that we've been able to secure that she can make this even faster. And this is always what we stressed. This is about a global product, but it also really requires customer intimacy, customer proximity in terms of services, in terms of having someone in your same time zone that you can reach out, particularly for our top customers, as you're aware of how important those are. And we will already in this calendar year really ratch up the speed of putting resources and events on to the ground.

Of course, also having now the opportunity to organize those. So it's really a perfect timing as the pandemic retreats and there is continuous relaxation of how you can organize such events. The opportunity in China, we always stressed, is at least as big as our opportunity in the U.S., in North America. Of course, the challenges or the requirements for this market are very different.

It's a completely separated ecosystem in terms of technology, in terms of legislation. We have to clearly state that our brand awareness is probably even lower in this market, which makes the opportunity even bigger. In terms of really putting resources on the ground, we are, of course, still hampered by the very strong restrictions of travel into Mainland China. We hope that also, there, the relaxation will take place.

Current guidance by officials is more beginning of next calendar year than earlier. And so the route of increasing our local business is mimicking the same. And while we haven't anything to announce on partnerships, we, of course, continue to invest. So just last week, we had a very successful VIC event organized in Beijing because, of course, these events are already possible in Mainland China.

So we are working hard on brand awareness, we are working hard on establishing tighter and more intimate customer relationships. The timing for putting more resources on the ground is a bit later than what we do currently for the U.S.

Oliver Chen -- Cowen and Company -- Analyst

OK. And Martin, the customer acquisition cost momentum has been quite impressive. As we model this longer term, what do you see happening there particularly as you think about events and how this may evolve over time? Thank you.

Martin Beer -- Chief Financial Officer

Yeah, Oliver. I mean this is clearly in line with what we've seen in the past quarters. So we've seen decreasing online marketing costs in relation to the customer acquisition cost. So improving marketing efficiency there without compromising on the quality of the customer that we are attracting.

But also, as said in the previous calls, we want to reinvest those online marketing cost efficiencies into other marketing activities, especially in increasing the brand awareness in regions where we're underpenetrated, for example, U.S. or other regions and therefore, we guide toward a more stable marketing cost ratio. And we've seen here in this quarter and when we guide for the full fiscal year, a decreasing marketing cost ratio, but this is driven as, I mean, in the past quarters and also in what we see in the last weeks, the opportunity to do physical events, which are inherent also in our business model that we desperately need to do to be even more effective on the customer acquisition. We will continue and increase that ratio.

So the overall guidance is to reinvest the online marketing cost efficiencies into brand awareness campaigns and therefore, guide toward a stable marketing cost ratio.

Oliver Chen -- Cowen and Company -- Analyst

Very helpful. Thanks. Great quarter. Best regards.

Operator

And your next question will come from Michael Binetti from Credit Suisse. Your line is open.

Michael Binetti -- Credit Suisse -- Analyst

Hey, guys. Congrats on a nice quarter. So I want to ask about margins. Continue the questions here on margins.

I'm curious, as you're guiding for the high end in the fourth quarter of almost 10% EBITDA margins, but you're saying 7% to 9% is still the rate long term to think about. Is that the right rate to think about for next year? And if so, is there some kind of reinvestment that you're -- it seems like there might be some discrete reinvestment that you'd be able to speak about today if you're guiding this year to 9.9% at the high end of your guidance but 7% to 9% is still the right range for next year? And then I have a follow-up, please.

Michael Kliger -- Chief Executive Officer

Martin, you want to take that?

Martin Beer -- Chief Financial Officer

Yeah, definitely. I will kick it off and then you can add. I mean there's two effects, obviously, in this fiscal year that lead to adjusted EBITDA margin, exactly as you said, on the top end of 9.8%. And first of all, it's coming back to the marketing cost ratio, where we have not been able -- not being able to invest as much in brand awareness campaigns that we would like to have done.

And so we will -- in the next quarters and years, we'll want to increase that ratio to increase brands in markets where we're underpenetrated to capture, and this is the core essence, to capture top-line growth in the strongly developing market, to attract and retain the right customers for us. And the second is obviously a ramp-up of public company costs that we didn't see in this quarter, which we'll continue to see in the corporate government setup and SOX compliance setup and all those public company costs that we expect to have with the following quarters. So there's nothing to worry about regarding our EBITDA margin. But obviously, the 9.8% on the top end of our guidance for the full fiscal year is also a bit driven by COVID, by the special situation of this year.

So the overall trend that we target is the 7% to 9% adjusted EBITDA margin. Obviously, we want to continue to grow profitably and to continue the strong -- you have this diligence growth and be very professional about our unique business model growing on a profitable basis. But we also want to focus on attracting the right customers, of growing on the top line, capturing share in this highly trusted market. And that's why we kept the midterm guidance of 7% to 9% adjusted EBITDA margin also to give us flexibility on the following quarters.

Michael Binetti -- Credit Suisse -- Analyst

I guess as a follow-up on the commentary about the new cohorts, that was very interesting to hear -- exciting to hear. You said the new customers acquired are showing repurchase rates up to -- up 20% relative to prior cohorts. As we think about customer growth in the near term, in the fourth quarter, obviously, you've got 1-year and two-year rates that are well above where I think you thought you'd be at this point in your conservative modeling, but since you already have three of the four quarters that influenced the fourth-quarter active customer rate, can you just tell us, is that something you expect to decelerate in the fourth quarter? And if so, could you marry that with the new cohorts coming in at much higher frequency? I'm trying to think about what metrics might slow and the puts and takes within the revenue guidance in the two-year stack that Matt asked about earlier slowing in the fourth quarter please.

Michael Kliger -- Chief Executive Officer

Sure. Absolutely valid and insightful questions. The performance of better repurchase rate, we believe, will continue. We truly believe we have acquired a strong quality of new customers.

The area where we are taking a bit more conservative view is the amount of new customers coming in. And so that is in your modeling, if you look at Q4 and if you take the implied two-year growth rate, that is where we are a bit more on the conservative side because we have seen in Q2 and Q3 massive influx of new customers and we believe part of that is driven by lockdown store closures. The good news -- and this is the best news to us, is that all those customers that came in have at least the same quality of money, even better. And as you rightfully said, there is this ongoing effect of all the cohorts driving business next year and the year after.

So that will remain. We took a bit more conservative view on how many new customers will come in, in this last quarter. And therefore, the two-year growth rate is still in line with the full fiscal year but is not matching the exceptional and extraordinary results of Q3.

Michael Binetti -- Credit Suisse -- Analyst

OK, thank you very much.

Operator

And your next question will come from Flavio Cereda from Jefferies. Your line is open.

Flavio Cereda -- Jefferies -- Analyst

Hi. Hello. Good afternoon, Michael, Martin. So three quick questions for me.

Number one, regarding the U.S. As you mentioned in the release, you talked about further investments in the U.S., and you touched on it in answering previous questions. Do you have -- now that you've hired somebody as well, do you have a better idea, better visibility that you can share with us? At what stage do you get critical mass in the U.S., whereby you need to have a local hub as opposed to shipping out to Europe because you -- I'm assuming you can't be far from that today? Second question I had was, in the end, in Q3, which was, of course, exceptional, as we were hoping it would be. You -- in the end, you sell what you previously bought.

So I was just wondering, was there a stage in the quarter perhaps earlier in the quarter where you had to replenish perhaps more aggressively than you expected with some brands? Maybe with some best-sellers in particular to basically keep up with demand? And number three, quick question. In terms of menswear, how is menswear ramping up relative to your expectations? Thank you.

Michael Kliger -- Chief Executive Officer

So quick answer to your three questions. Number one, local hub is on the road map, but nothing for the next 12 months. So we will, of course, announce if we're getting closer to that. But we're not as close as you may think in terms of setting up an additional hub in the U.S.

So this is still further out, but it is on the road map. Number two, the -- sorry, let me start with three, the ability to replan, the pandemic has created very unique opportunities because, as you know, replanning -- replenishing during the season is usually very difficult, particularly if you're interested in best-sellers because everyone is interested in best-sellers. The pandemic had some unusual effects because while a lot of the online channels were going very well, of course, retail channels suffered. And so there was an imbalance in stock availability, and we were able to get hold of additional merchandise in channels that did not perform as well for the brands.

So this allowed us -- because as you rightfully say, in our model, in the current model, you can only sell what you bought. And so we were able -- also thanks to our exceptional brand relationships, to stock up and feed the demands that we were exposed to. And sorry, your third question, just remind me.

Flavio Cereda -- Jefferies -- Analyst

Menswear. Menswear, how that's ramping up?

Michael Kliger -- Chief Executive Officer

Menswear. Menswear, we are extremely happy with the ongoing performance. I mean we shared with you that at the end of the first calendar year, we were 10%, and we continue to see very strong growth. And so we continue to expect and believe that -- also for kidswear, actually, that the share of these businesses in our total business will continue to increase.

Flavio Cereda -- Jefferies -- Analyst

Super. Great. Thank you very much.

Operator

[Operator instructions] The next question comes from Alexandra Steiger from UBS. Your line is open.

Alexandra Steiger -- UBS -- Analyst

Thank you very much for taking my questions and congrats on the great quarter. So as a follow-up to Michael's question earlier, you had very strong growth in the top customer segment with plus 28% year over year. Could you maybe unpack some of the drivers and also share some of like the initiatives you're focused on to attract more top customers and also drive revenue per top customer? And then second, any updated thoughts on further category expansion as we noticed that there is a beauty pop-up on your site right now? Thank you so much.

Michael Kliger -- Chief Executive Officer

Thank you, Alexandra and good to see that you follow our website closely here. On the first part, the -- if I unpack the strong performance of our top customers, we clearly see that they have a much wider range of spending opportunities. I mean this is a customer that did not suffer financially over the last 12 months. But of course, the occasions and the reasons to buy wardrobe were somewhat more limited than usual.

And as the opportunities to go on vacation, as the opportunities for invitations for events are coming, are expected by these customers as they look ahead of the year, we see that they start again to buy also in categories that they a bit neglected. And that is one key driver of the very strong performance of average spend per top customer. And so this is really driven by improvement in consumer sentiment. One key component, of course, of our top customer relationships are the personal shoppers.

And also there, we have an ongoing plan to increase the footprint. I mean the U.S., of course, also a target for that. That is one of the levers for those top customers that want that relationship. We always see it's very beneficial to fulfill their needs, to make them happy and customer satisfaction clearly drives business.

And the third component is we were able, as stated in Q3, to do virtual events. We had the designers like Roger Vivier, I mean, in the case of Gherardo, we have Johanna Ortiz. And so we did provide as good as possible, a ticket to this amazing industry, but we are looking forward to really organizing events. Our pipeline is really filling up.

I mean we have announced recently that we are a supporter of the Centre Pompidou in Paris, which is giving its last exhibition before a longer closure for refurbishment and then people have opportunities there in Paris to invite top customers. And clearly, at least based on the current view -- we have to be careful, but based on the current view, we are looking ahead for a September Fashion Week cycle in New York, London, Milan, Paris that should have physical events again, should have physical shows. So we are also ramping up for that. In terms of new categories, we are always ongoingly review opportunities.

And as you rightfully said, we have launched a pop-up. Recently, we're in collaboration with Estée Lauder, presenting some of the high-end skin care products of La Mer, but also products from Kilian. And this is just efforts to understand, will the customer accept this? Because our whole logic of category expansion is always driven by the customer needs to give us the right to do this. This is not based on the spreadsheet, and this is understanding there's huge revenue to be gained, no.

It all starts, in our case, with the customers. And if customers say, yes, Mytheresa, you have a right to play in this category, then we will pursue it. And this is exactly what those pop-ups, these test balloons are serving to really understand what our customer is looking for when they shop on Mytheresa. We definitely believe there are many more opportunities in the wider luxury lifestyle, but there's been a concrete decision on adding a new category at the moment.

Operator

[Operator signoff]

Duration: 56 minutes

Call participants:

Martin Beer -- Chief Financial Officer

Michael Kliger -- Chief Executive Officer

Kimberly Greenberger -- Morgan Stanley -- Analyst

Matt Boss -- J.P. Morgan -- Analyst

Oliver Chen -- Cowen and Company -- Analyst

Michael Binetti -- Credit Suisse -- Analyst

Flavio Cereda -- Jefferies -- Analyst

Alexandra Steiger -- UBS -- Analyst

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