Westwing Group SE (WEW.DE) Q3 2026 Earnings Call Transcript

Operator: Good morning, ladies and gentlemen, and welcome to the Westwing Group SE Third Quarter 2026 Earnings Call. The conference will be recorded. [Operator Instructions] Now ladies and gentlemen, let me turn the floor over to your host, Andreas Hoerning.

Andreas Hoerning: Good morning, everyone, and thank you for joining us for our earnings call on the third quarter of 2026. My name is Andreas Hoerning. I'm the CEO of Westwing. I'm hosting the call together with Sebastian Westrich, our CFO. Looking at today's agenda, I will begin by providing key updates on our business for Q3 2026, after which Sebastian will share details of Westwing's financial performance. In the third part of today's agenda, I will provide an overview of the medium-term value creation levers driving the third phase of our 3-step value creation plan. Following the investment highlights, we will be happy to address any questions you may have. We've changed the structure and layout of the presentation slightly and hope you find it useful. Let's start by looking at the current state of Westwing based on some key numbers. We achieved our fifth consecutive quarter of growth with GMV up 7% and revenue up 13% year-over-year. This was supported by a 13% increase in active customers, marking the third consecutive quarter of year-over-year growth in our customer base. Our adjusted EBITDA grew 7% year-over-year, and G&A ratio as a percentage of revenue has been shrinking for 8 consecutive quarters by now, demonstrating the strong operating leverage of our business model. As part of our capital allocation strategy, we invested EUR 9 million in share buybacks year-to-date. And today, we are reiterating our full year 2026 guidance with revenue expected in the upper half of the guided range. Let me move on to a brief overview of the broader market environment in Q3 and its impact on our financial performance. The Home & Living market remains challenging with subdued consumer sentiment, a weak construction sector and, on top of it all, even higher fuel prices in Q3 versus the first half of the year. As a result, consumers continue to postpone investments in their homes or trade down to more affordable products to make their homes more beautiful. For Westwing, this is particularly visible in weaker furniture demand across our established markets, meaning those entered before 2024. At the same time, we continue to see strong growth in other categories such as decoration as well as in newer markets. Weaker furniture demand also weighed on Westwing Collection growth, given its significantly higher exposure to furniture compared with decoration and other lower-priced categories where third-party brands have a higher share at Westwing. On profitability, higher fuel prices drove up container and freight costs, accounting for approximately half of the 4 percentage point year-over-year decline in contribution margin in Q4 -- Q3. Additional pressure came from temporary effects related to our order and warehouse management systems migration as well as ramp-up costs in the U.K. However, we largely offset these impacts through operating leverage in marketing and G&A. Sebastian will talk about all of those effects in more detail. Looking ahead, we expect macroeconomic pressure on margins to persist. To mitigate these effects, we implemented selective price increases and logistics efficiency measures during Q3, with tangible margin improvements already visible in October. Beyond our financial performance, we also made strong progress on strategy in Q3. As part of Phase 3 of our 3-step value creation plan, we achieved several important milestones: the expansion into 5 new countries, our landmark collaboration with Victoria Beckham's fashion house, the opening of our Munich flagship store, and the launch of a new share buyback program. We also further defined the medium-term levers across efficiency, growth, and financials for the third phase of our 3-step value creation plan, which I will talk about in the third agenda point of today's presentation. Back to Q3. Let's discuss in more detail how we progressed on our strategy over the past months. We're happy to report that we are well on track with the execution of the third phase of our plan, scaling with operating leverage. As we continue to grow, disciplined cost management allows us to capture operating leverage while maintaining the capacity to invest throughout the cycle. Let's have a look at 3 growth topics we successfully implemented in Q3, starting with geographic expansion. We launched Estonia, Latvia, and Lithuania in July, followed by Ireland and Bulgaria in September, bringing our footprint to 28 markets. Overall, we are very pleased with the momentum in our expansion markets, meaning those launched since May 2024, which reached 13% of group GMV in Q3 2026. The U.K., our largest expansion market, continues to grow steadily. While its logistics cost ratio remains significantly above group average due to ramp-up costs, we expect this to normalize as volumes scale. Our brand campaign we launched a few weeks ago had a special focus on the U.K. I'll speak about that in a minute. On the next slide, you can see some impressions of the latest addition to our store portfolio, our beautiful new Munich store. It opened in July. The store relocated from its warm-up location to its permanent home on Residenzstrasse, one of Munich's premier shopping streets. Also, this is the first store to feature our enhanced in-store shopping concept designed to deliver an even better customer experience. It also includes an even larger dedicated space for our design service where customers can receive personalized advice on creating more beautiful homes, as shown on the picture on the right. In September, we celebrated the opening with a full-day event, welcoming many of our customers during the day, followed by an exclusive evening gathering with influencers, tastemakers, and celebrities. Overall, the new Munich store is another important step in strengthening our offline presence and supporting our ambition to gain market share in our existing markets. Last but not least, let's take a look at our exclusive collaboration with Victoria Beckham's fashion house. The collection combines Victoria Beckham's distinctive design aesthetic with Westwing's expertise in beautiful living. It features 32 products across tableware, textiles, and decorative accessories, marking her debut in the Home & Living category. It is available exclusively at Westwing in all our 28 markets since October 12. The collaboration is particularly important for our U.K. market entry. Following our launch in February, partnering with one of Britain's fashion and lifestyle icons provides for a strong opportunity to build brand awareness and establish Westwing as a premium home destination. Alongside the U.K., we focused our brand marketing activities on Germany and, to a lesser extent, on France and Poland. However, we expect the collaboration's reach to strengthen awareness and positioning across all our markets. This collaboration supports 2 key growth levers in the third phase of our 3-step plan: gaining market share in existing markets and driving international expansion. It also marks an important milestone in our ambition to establish Westwing as a super brand in design, further strengthening our premium positioning and international brand recognition. I now hand over to Sebastian for details on our financial performance.

Sebastian Westrich: Thank you, Andreas, and good morning, everyone. I'm Sebastian Westrich, the CFO of Westwing. Let me start, as always, with our top-line performance. Q3 marked our fifth consecutive quarter of growth amidst persistent macro headwinds. Following a flat July, GMV growth accelerated throughout the quarter. As Andreas highlighted earlier, our Q3 performance was once again supported by our country expansion initiatives, the continued strength of our recurring sales events, and growth in both the Westwing Collection and our third-party assortment, with Westwing Collection GMV increasing 4% year-over-year and third-party assortment growing 13%. Westwing Collection growth continued to be affected by subdued furniture demand given its high exposure to this category. In contrast, as Andreas mentioned, lower price categories such as decoration, which have a higher share of third-party products, recorded stronger growth. It is also important to highlight the difference between revenue and GMV growth as revenue benefited from an unusually high volume of orders placed in Q2 but shipped only in Q3. This was mostly driven by the migration of our order and warehouse management systems at the end of Q2. With the resulting order backlog fully cleared by the end of Q3, we do not expect this effect to reoccur in Q4. Let us now take a closer look at our top-line performance across the 2 segments. We are pleased to see growth across both segments. DACH revenue increased by 5% year-over-year, while International delivered strong growth of 22%. In the International segment, revenue growth was primarily driven by the continued strong momentum in our expansion countries. Both segments benefited similarly from the shipment of the Q2 order backlog and followed a comparable trajectory throughout Q3 with subdued demand in July, followed by accelerating growth towards the end of the quarter. Moving to our group profitability. We delivered resilient results despite ongoing margin pressure. In Q3, adjusted EBITDA increased by 7% year-over-year, representing an adjusted EBITDA margin of 5.8% compared to 6.1% in Q3 2025. Profitability continues to be impacted by macro-driven headwinds, most notably higher transportation costs driven by increased fuel prices alongside negative one-offs. However, this margin contraction was largely offset by strong operating leverage across both marketing and G&A expenses. Looking at the first 9 months of 2026, adjusted EBITDA rose slightly by 1% year-over-year to EUR 22 million with an adjusted EBITDA margin of 6.2%. Overall, a robust performance despite significant cost inflation. The next slide provides an overview of our P&L performance for the first 9 months and Q3. I will focus on the Q3 developments to be seen on the right-hand side of the slide. Looking at our Q3 P&L development, gross margin decreased by 1.6 percentage points year-over-year to 51.2%, driven by higher container costs, one-offs still connected to our system migrations, and mix effects. The fulfillment ratio worsened by 2.8 percentage points year-over-year to minus 21.6%, primarily reflecting higher freight costs due to the elevated fuel prices, negative one-offs, and ramp-up costs for our U.K. operations. As a result, contribution margin decreased by 4.3 percentage points year-over-year to 29.6%. Turning to our operating expenses. Our marketing ratio improved by 1.4 percentage points year-over-year to minus 12.1%, driven by efficiency gains as well as additional scale effects from the Q2 backlog shipped in Q3. Please keep in mind that the planned cost for our 2026 brand marketing campaign will only show up in the fourth quarter of this year. Our G&A ratio, including other results, improved by 2.6 percentage points year-over-year to 15.4%, continuing to deliver strong operating leverage despite additional G&A costs associated with other our new stores. Consequently, adjusted EBIT margin came in at 2.2%, down 0.4 percentage points compared to the prior year period. G&A ratio remained flat year-over-year at 3.6%. Overall, adjusted EBITDA margin stood at 5.8% in Q3 2026, down 0.3 percentage points compared to 6.1% in Q3 2025. In summary, strong operating leverage helped sustain overall profitability despite significant pressure on our contribution margin. Finally, a brief comment on the adjustments to EBITDA in Q3. As in previous quarters, adjustments were limited to the effects of revaluing share-based compensation programs and the reclassification of sublease income. Together, these effects amounted to approximately EUR 2 million, positively impacting operating profit in our consolidated income statement. In our management P&L shown here, we excluded these positive effects from adjusted EBITDA, meaning that adjusted EBITDA does not reflect this positive impact. Due to the significant contraction in contribution margin, I would like to provide more details about the specific drivers as well as the expected impact duration of each lever. Starting on the left, higher fuel prices were the predominant driver of cost inflation, accounting for more than 50% of the total margin contraction across container costs and outbound logistics. The remainder was attributable to other temporary operational factors and some mix effects. Breaking down the components. Container costs impacted the margin by minus 0.5 percentage points, mostly fuel-driven, but also including some effects from container congestion. Rising container costs affected us as a Home & Living e-commerce company more significantly than, for example, fashion retailers. This is because furniture has a much lower value density. A container filled with fashion products can carry approximately 5 to 10x the merchandise volume of a container filled with chairs. As a result, higher container costs have a disproportionately greater impact on our margins. While we source about 50% of our Westwing Collection from Europe, we remain exposed to higher bunker oil surcharges and rising container freight rates. The next driver in the margin waterfall is higher fuel-related freight costs, which was the largest single driver at minus 1.7 percentage points. Here, too, the lower value density of larger items means that rising fuel prices have a greater relative impact on our transportation costs than in other industry, particularly over longer transport distances. Both effects, the increase in container costs and freight costs, are expected to ease as soon as fuel prices normalize. Knock-on effects from the migration of our order and warehouse management systems reduced contribution margin by 0.9 percentage points. This included, for example, higher freight costs from increased split shipments of multi-item orders. We do not expect these effects to reoccur in Q4 as order backlogs have been cleared, split shipments have returned to target levels, and warehouse efficiency is already above last year's level. U.K. ramp-up costs accounted for minus 0.4 percentage points, which will improve naturally as we scale. Main drivers were fixed costs associated with our third-party operated and not yet fully utilized warehouse in the U.K., as well as freight inefficiencies as current volumes are not yet sufficient to inject shipments from Poland to the U.K. into a more cost-efficient consolidation hub. As U.K. volumes scale, we expect the associated margin impact to gradually decline. Finally, we had mix effects and other factors, most notably a lower Westwing Collection share due to the weakness of the furniture category, representing minus 0.8 percentage points. The impact duration of this bucket is mixed. To actively counter these headwinds, we implemented targeted measures throughout Q3, including selective price adjustments, increased shipping fees, and further structural improvements to our logistics efficiency. Because these countermeasures were phased in progressively during the third quarter, the full positive impact is expected to materialize in Q4. We see encouraging signs with tangible margin improvements already evident in October. To summarize, the Q3 contribution margin contraction was largely driven by temporary factors with material improvements already expected in Q4. As these pressures ease or disappear, our countermeasures will remain in place, providing additional margin upside over the medium term. While we are not satisfied with our contribution margin in Q3, we are very pleased with the strong structural operating leverage embedded in our business, reflected in the consistent increase in quarterly revenue per FTE over the past 4 years. Between 2022 and 2025, structural efficiency gains driven by greater centralization, scalable technology, and operational streamlining increased quarterly revenue per FTE from EUR 45,000 in Q3 2022 to EUR 83,000 in Q3 2025. Moving into 2026, the combination of a return to growth and disciplined cost management further accelerated this development with revenue per FTE reaching EUR 94,000 in Q3 2026, while total headcount remained broadly stable despite additional G&A for expansion initiatives, predominantly for stores. Finally, a brief comment on another indicator of operating leverage not shown on this slide. Our G&A ratio continued to decline for the eighth consecutive quarter, further demonstrating the scalability of our business model. With that, let's move on to profitability at segment level. In the DACH segment, Q3 adjusted EBITDA grew by 4% year-over-year, maintaining a stable adjusted EBITDA margin of 6%. In the International segment, Q3 adjusted EBITDA increased by 9% year-over-year, while adjusted EBITDA margin declined from 6.4% to 5.7%. The International segment experienced this margin contraction primarily due to the temporary ramp-up costs for our U.K. business operations. Taking a look at the first 9 months of 2026, the International segment grew adjusted EBITDA by 15% year-over-year to EUR 11 million with a 6.3% margin, while DACH generated EUR 11 million in adjusted EBITDA at a 6.1% margin. Let us now take a look at our balance sheet. Net working capital improved in Q3 by EUR 1.5 million year-over-year and remained negative at minus EUR 2.7 million. This positive development was primarily driven by higher trade payables, which more than offset our seasonal inventory buildup. Turning to inventory. Net inventory stood at EUR 63 million, representing an increase of EUR 9 million year-over-year in absolute terms. However, relative to last 12-month revenue, inventory increased only slightly by 0.7 percentage points, mainly reflecting higher goods in transit for new product launches and dedicated U.K. stock to support our continued expansion. Overall, inventory levels are developing broadly in line with top-line growth. Moving on to cash. We closed the quarter with a solid net cash position of EUR 63 million at the end of September 2026, slightly down from EUR 68 million at the end of June. In Q3, operating cash flow stood at EUR 2 million, which includes a cash outflow of EUR 0.6 million related to the settlement of employee stock options. Deducting EUR 3 million in investing cash flow, free cash flow came in at minus EUR 0.7 million. IFRS 16 lease payments amounted to EUR 3 million, resulting in a free cash flow after lease payments of minus EUR 3.6 million, in line with the expected seasonal development. Finally, other financing cash flow stood at minus EUR 1 million, which includes EUR 1.5 million related to the continued repurchase of shares. This brings me to our share buyback program. We successfully completed our previous share buyback program in July, repurchasing a total of about 500,000 shares for an aggregate capital of EUR 8 million. Demonstrating the strength of our balance sheet and our continued commitment to returning value to shareholders, we launched a new share buyback program on October 12, which is scheduled to run until March 31, 2027. This new program has a maximum volume of up to EUR 10 million or 640,000 shares. As of November 4, we have already repurchased 95,000 shares, representing a total investment of approximately EUR 1.3 million. Turning now to our full year outlook. We are pleased to confirm our guidance for the full year 2026. We continue to expect full year revenue in the upper half of the range of EUR 470 million to EUR 495 million. And on profitability, we confirm our guidance for adjusted EBITDA in the range of EUR 36 million to EUR 48 million, corresponding to an adjusted EBITDA margin of 7.6 -- 7.7% to 9.7%. With that, I hand back over to Andreas for an update on our 3-step value creation plan.

Andreas Hoerning: Thank you, Sebastian. As promised earlier in the call, let me share a glimpse into how we plan to -- plan to bring the third phase of our 3-step value creation plan fully to life. As a reminder, at the heart of our strategy is our ambition to become the super brand in design, the ultimate aspiration in Home & Living. This means going beyond simply selling products. We want to inspire our customers to design their lives, creating distinctive experiences that connect with design lovers and build lasting relationships with our brand. To achieve this, we combine bold premium aesthetics with accessible exceptional design while continuously raising the bar across every customer touchpoint. Our ambition is to build a brand that stands out, inspires customers, and creates lasting value. For investors, this ambition must translate into sustainable growth, very attractive margins, and strong cash conversion. Our 3-step value creation plan provides the road map to deliver exactly that. Since 2022, we have worked on this plan and successfully turned around the business, built a scalable platform with significant improvements in profitability. In 2025, we entered the third phase of our value creation plan, focused on scaling the business with operating leverage. Throughout 2025 and '26, we made strong progress across our strategic levers with geographic expansion as the key priority. With our footprint now covering almost all of Europe, we have defined our medium-term value creation priorities that will guide our focus over the next few years. What's clear is that the key to success is to sell more of the same, especially more Westwing Collection, with operating leverage and allocate capital in the best way possible. To achieve this, we will be working on the following areas: efficiency to achieve a structurally leaner cost base, growth in core through share gains in European B2C e-commerce, growth beyond the core powered by new engines of growth, and financial levers beyond the P&L. Let's now look at the key levers in those areas. I'll go through the areas one by one and briefly describe the levers. First, on efficiency, we will focus on 3 levers. The largest opportunity is probably the AI-driven transformation of how we work. Over the past few years, we've changed the way we work in areas such as translation, imagery, and coding with strong tangible results in speed, quality, and costs. This will only accelerate across the organization with more experience and advancing technology. A very specific lever for 2027 is the merger of our neighboring warehouses close to Poznan in Poland, which will be carried out mid next year. This will bring low 7-digit annual savings from these plus further operational efficiencies. Overall, and that's the third box in the efficiency column, we plan to realize strong fixed cost leverage while we grow. Moving to the second column, growth in core, which we define as European B2C e-commerce. The forever lever to optimize this is evidently our product assortment. Beyond price points, styles, brands, et cetera, in existing categories, there are still a few white spot categories for us, such as customizable storage furniture with significant cross-selling potential. On brand and community development, our goal is to strengthen the bonds with existing and new customers significantly over the next years. This is part of the overall customer experience where we digitally and operationally want to set the bar higher and make even more customers come back over time. Examples in the digital space would be an AI-powered room planner or personalized interaction across the digital journey. In terms of geographies, growth shall come both from our pre-24 (sic) [ pre-2024 ] and the countries launched over the past years. The emphasis in this last box is on the LatAM as we're currently in a scaling mode as we speak at 13% of group GMV at the moment. Moving to the third column, we also see significant room for growth beyond our core. Firstly, we currently focus heavily on B2C customers, serving B2B customers only opportunistically without sophisticated infrastructure or a proper outbound sales team. With this approach, we've come to 7% of group GMV, but looking at peers, we see that at least doubling that share is possible with limited additional resources. Secondly, we believe we can grow the Westwing Collection faster through listing parts of the assortment on partner channels, increasing the points of sale for our gorgeous products. We already have a few store-in-stores in place, and we want to add further offline and also online channels in the future. As an example, an agentic checkout trial will be going live with Zalando in 2027. The rationale is that while there is always a certain overlap, we are still a very small brand and e-commerce site, and we can benefit from other retailers' customer bases. Thirdly, we believe physical stores have the potential to become a game changer for us. For the next 12 months, our focus lies on creating a clearly profitable blueprint with the existing locations, which we can then roll out to more cities. We shall also work on bringing online and offline closer together for the customer. Fourthly, mid- to long-term, we also see further geographic expansion as a lever for more growth. Moving to the fourth column on value creation beyond the P&L. On the one hand, we aim to further strengthen cash conversion, ensuring that profitable growth translates into strong free cash flow generation. On the other hand, for cash or capital allocation, we have already established 5 guiding principles, which we outlined in previous earnings calls. Share buybacks currently represent the most important initiative. In the future, we might add further financial levers for value creation. Going forward, we will selectively update you on the progress across the levers in efficiency, core and noncore growth, as well as financials. Before we get to Q&A, let me briefly recap the investment highlights. There are 5 reasons we think Westwing is an attractive investment, especially comparing performance and potential to our current market cap. First, we are the one-stop destination for design lovers. Second, we have a strong brand and, with the Westwing Collection, a trusted product brand. Third, the market potential is huge. Fourth, we have high margins and proven operating leverage while we scale. Fifth, we have a strong cash conversion and a great balance sheet. These strengths also allow us to continue investing throughout the cycle even in the presence of the current macro headwinds. Sebastian and I are now happy to take your questions.

Operator: So the first question is from Volker Bosse at Baader Bank.

Volker Bosse: Volker Bosse at Baader Bank. Congrats on the results and especially thanks for the outlook towards 2030 in the presentation. First question would be on the revenue growth, 12.5%, but GMV growth only 7%. Just for my understanding, you said that is back -- due to a backlog. So if we would exclude the backlog from Q2, the sales growth would be then 7%. Is that right? And perhaps in that context, you can also provide details, I mean July was flat. You indicated a weak start into the third quarter, but then August and September has to be tremendously up. So perhaps share your view on the dynamic, which we saw throughout the third quarter. And the second question, you mentioned the partner channel growth and mentioned here at Zalando. Perhaps could you give more details what exactly do you plan to do here with Zalando and how does that work? And yes, last but not least, a word on current trading. I mean we are already in November, how did October progress in this challenging environment? And perhaps last, but not least -- last, but not least, you did not mention or not as much as in previous calls, the physical store expansion, perhaps an update where do we stand and how the physical store expansion program is progressing and how the stores are performing, of course?

Andreas Hoerning: Volker, for your 4 questions, I will be answering the question on partner channel growth and stores, and Sebastian will be taking the question on revenue versus GMV in Q3 and the current trading. So let me start with partner channel growth. So you asked what the plan was with the Zalando collaboration and how it works. So the plan is to list a part of the Westwing Collection portfolio on the Zalando sites and apps. So that means that you can find the Westwing Collection products part of the portfolio on the product listing pages and the product detail pages. And then when you want to -- when a Zalando customer wants to buy that, there's basically 2 phases at the moment. There's a test live where Zalando customers will be redirected to Westwing and do the purchase on Westwing itself. We will then transfer that to something that's easier for customers to handle, and that will be one of the first agentic shopping experiences on large scale in Europe, where Zalando customers will have Zalando purchase a product on their behalf on Westwing, so that the checkout actually goes on the Zalando website. So that's the plan with an agentic checkout to go live likely in 2027, most likely in the first half of the year. In Zalando's recent earnings call and press release, they also mentioned that. How it will work? So agentic checkout means purchasing on behalf. So that means that Zalando buys for the customer from Westwing, but the contract actually is established also between Westwing and the Zalando customer. That's how it works. We will be able to update more on this because this is a very new technology development. We will be able to update more on this in the first half of next year. Then Volker, you had a question on physical store expansion. So I mentioned in the levers until 2030 that store expansion is one of those noncore levers that we are looking into. For the time being, we are not planning to expand our store network, so not for the next approximately 12 months. If there's a fantastic opportunity, then we might actually engage with that. But the plan is actually to work with the existing store portfolio and making them into a perfect blueprint that's a clearly profitable blueprint that we can then roll out to more locations. So we're using the 10 locations starting actually with the Munich store that we just opened that has a new design concept layout, et cetera. We're starting from that, building the blueprint across the stores. And then we know what works best, what doesn't to then roll it out. We will update in due course in the earnings calls in next year. So, Volker does that answer your second and your fourth question?

Volker Bosse: Yes.

Andreas Hoerning: Sebastian, on to you.

Sebastian Westrich: Volker, thanks for your questions and from my side, so first on Q3, the first part of your question was revenue growth compared to GMV growth. And if revenue growth would have been in line with GMV growth without the backlog, it definitely would have been much closer. We always carry some orders from one quarter into another and effects that then can impact the magnitude is the timing also of sales events, so especially mega sales events. If they are very successful and have a high year-over-year growth, then based on these events, also more GMV will be moved into the next quarter. So I would say it would not have been 7%, slightly a bit above, but very much in line with revenue growth. Then the second part of your Q3 question was on the trajectory within the third quarter. As said, we reported already in our August earnings call that July on a group level saw a flat year-over-year development. And we saw then a rebound of growth trajectory broadly across all our markets with an already better August and then a strong September, also driven again by a very successful regular mega sales event, our Westwing Collection days, which we always have in September. Then the second question was on current trading in October. So after the really strong September with a very successful Westwing Collection Day sales event, we saw now a softer start into Q4. But this follows patterns that we have seen already in previous quarters with a very strong growth of big sales events and softer demand before and after. I think this is due to the consumer sentiment and people being more price sensitive. And as the Black Week is the most important and well-known sales event in the year, we expect that the very price-sensitive consumers are already now starting to delay purchases for the Black event now. And given the very, very strong performance of our mega sales event, we remain really confident that also the Black Week sales event this year will be successful.

Volker Bosse: Okay. One follow-up. You mentioned that you already launched price increases and improved logistic efficiencies in order to offset the lower contribution margin somehow. Could you give details on the logistic efficiency measures, which you implemented? I mean price increases is clear straightforward, but what exactly you did on logistics side to countermeasure, so to say here?

Andreas Hoerning: Sebastian, do you want to take that?

Sebastian Westrich: Yes, happy to take that. So one lever that we focused on is to further increase the shipping efficiency, so to reduce the number of shipments per multi-item order. And then we looked into many processes to improve this. We also are further optimizing the use of our new warehouse management system to improve the efficiency in handling the items. And this overall leads to then efficiency increase in warehouse operations, but also in terms of freight efficiency.

Andreas Hoerning: To give you maybe one very concrete example, in the old warehouse management system, we had to scan every single item at inbound, which meant quite some manual work and also delayed inbound process, so just simply a longer time until the items were available on stock for customers to buy them. And in the new warehouse management system, we don't have this requirement anymore. We actually inbound in bulk. So we don't have to scan the individual items. We scan basically the whole inbound once and then it moves to location goes straight through. So that's a significant cost and is also faster, is one of the -- is one of the advantages of our new warehouse management system, one of the reasons why we actually changed the system.

Operator: [Operator Instructions] So there's another question from Volker Bosse at Baader Bank.

Volker Bosse: If there are no further questions on other side, I would like to come up with another one. On U.K., I think that is really an exciting topic. It's a large country, and you spend a lot of efforts in marketing and now also with Victoria Beckham that perfectly fits into the U.K. strategy. Can you provide already here some details on how things are progressing in terms of customers or brand awareness or whatever you -- your KPI shows your progress here in U.K.

Andreas Hoerning: So Volker, I think from -- especially from the brand campaign, that's still ongoing. So that's why we don't have the final numbers on that campaign. We will be able to update you in Q1 on those numbers. What we achieved is through this brand campaign, we already see that we have massive reach for a brand that was virtually unknown in the U.K. beforehand, massive reach, obviously. So we saw, for instance, that the brand searches in the U.K. and in Germany, in Google, for instance, jumped massively in the U.K., of course, from a very low base. But even in Germany, we actually saw multiple times brand searches during the first days of the campaign versus normal times. So it seems to have sparked a lot of interest in us. How much that translates into top line is a question that we can only answer after a few months into the campaign, of course, by actually tracking, we do certain tests that allow us to estimate how much we actually gained on that one. The probably most important figure on U.K. top line is that in October, we reached a 3% share of group GMV with the U.K. top line. So we were in -- so we started in February, obviously, at 0%. In summer, we accelerated into 2%, 2.5% of group top line. And we're now -- in October, we were at 3% of group GMV coming -- stemming from the U.K. And that makes it clearly the largest market of all the expansion markets already. And as we say, we expect significant growth to come from the U.K. also in 2027 and beyond. And that's also the reason why we invest quite a lot into marketing with Victoria Beckham obviously being a fantastic ambassador there and also the reason why we invest into faster delivery times through the U.K.-based warehouse.

Volker Bosse: Yes. Thanks for the reassuring statements and indications. Great. Coming to the own brand mix, I mean Westwing Collection fell from 66% to 64%, it's really marginal and like, of course, explainable in launching new countries, new stores. However, Westwing Collection is a superior provider of margins and differentiation. So how do you think things are progressing here with Westwing Collection? How much decline in Westwing Collection share you would accept, so to say, without putting your margins on risk, so to say.

Andreas Hoerning: Yes, Volker, thank you so much for that question. It's obviously also one that we are looking into quite a lot. But the main finding here is that it's not the country launches, the new country launches that influence the Westwing Collection share negatively. If anything, most of the new countries actually have a higher Westwing Collection share than the pre-24 (sic) [ pre-2024 ] countries. So that's not the driver. The driver is actually the macro point. So Westwing Collection has a much higher share in furniture than, for instance, in decoration. So if you take the sofa category on Westwing, this is nearly 100% Westwing Collection. And if sofas relative to decoration are dampened in demand stemming from the macro factors, then the Westwing Collection share suffers. So that is the reason. It's a macro-driven reason because the Westwing Collection is more prevalent in furniture, a lot more actually than in the categories with smaller absolute price points. That is the reason. So we expect that this is a temporary development. Of course, we're also happy that we are able to grow the third-party assortment very fast, but we believe that Westwing -- Westwing Collection will pick up again once we see furniture sales grow again, and this is obviously connected to the macro environment.

Operator: Right. Since there are no more questions, I hand you over to the Westwing management for closing remarks.

Andreas Hoerning: So as we haven't received any additional questions, we're ending today's earnings call. Thank you for joining, and goodbye.