MYTE

Publicly traded companies mentioned herein: Cie Financiere Richemont SA (CFR SW), Farfetch Ltd (FTCH), MYT Netherlands Parent BV (MYTE)

Highlights

The presenter is long shares of MYT Netherlands Parent BV (MYTE), which operates Mytheresa, an online wholesaler of luxury clothing and apparel. The company was formerly a subsidiary of Neiman Marcus and went public in January 2021 at a $2.2B valuation. The IPO was part of the Neiman Marcus bankruptcy proceedings, and a large portion of the proceeds were used to pay creditors. MYTE skews to women’s clothing and accessories but recently expanded into men’s and children’s categories, and its geographic mix is 61% Europe (Germany represents 32% of its European business), 12% US, and 27% rest of the world (with no countries besides Germany and the US accounting for >10% of total sales). In MYTE’s late February Q2’21 Investor Presentation (FY2021 ends June 30, 2021), management guided to 26% – 29% revenue growth for FY2021 and a low- to mid-20% long-term revenue CAGR. He sees upside to this long-term growth guidance mainly due to the luxury fashion online penetration opportunity, as well as opportunities to grow in China and gain market share in the US. On his numbers, the stock is trading at <2x EV/Sales 2 years out and he sees potential for the ~$27 share price to double in the next 12 months based on strong topline growth, margin expansion, and a potential rerating.