Mavi Giyim Sanayi ve Ticaret A.S. ($MAVI)

Hello, everyone. Welcome to Mavi webcast regarding the Last Quarter and the Financial Year 2025. Again, a quick reminder. Our financials are reported using IAS 29 financial reporting in hyperinflationary economy. The financial figures in this presentation also have been adjusted according to IAS 29 and are expressed in terms of purchasing power of the Turkish lira as of January 31, 2026. Historical figures for selected key performance indicators is also provided for only information purposes. I would like to remind you that this presentation is being recorded, and we kindly ask you to review the disclaimer and consider all forward-looking statements and comments in accordance. Our CEO, Cüneyt Yavuz, will be presenting the results now, followed by a Q&A session. Please make sure you keep your microphones muted throughout the presentation. I will leave the floor to Cüneyt Yavuz.

Thank you, Duygu. Hello, everyone. Thank you all for joining us in another year-end webcast. 2025 has been a year shaped by a complex macroeconomic environment in Türkiye. Consumer demand has moderated as anti-inflationary policies continue to take effect. In the meantime, competition remains vibrant across both physical retail and online channels. As always, Mavi's focus has remained firmly on what we can control, staying disciplined around our strategic priorities, executing with consistency and maintaining operational agility to navigate a demanding dynamic market. As in every year and meeting, I would like to walk you through the key strategic priorities that guided us throughout 2025. Priorities that remain central to who we are, as a brand, and how we operate as a business. Let's start with our brand positioning and customer acquisition strategy. At Mavi, our strategy continues to be built around strengthening the Mavi brand, while expanding our customer base. We focus on 3 key areas that support this objective, delivering premium product value, reinforcing our denim leadership and increasing our lifestyle brand appeal. First, on the product side, we continue to strengthen our lifestyle product portfolio. Our approach remains very clear, offering the right premium quality products at the right price through diversified collections and our premium lines such as Mavi Edition, Mavi Black, Pro, Mavi Gold and Mavi Icon. We are addressing a broad set of customer segments, while maintaining strong brand consistency. Second, we continue to reinforce our denim-centric positioning. Jeans remains at the heart of our brand and our Jeans Mavi positioning underlines that leadership. We supported positioning through targeted campaigns through promoting our small and men's jean collections, highlighting our trendy new fits, silhouettes and colors, while continuing to innovate in denim with a strong focus on sustainable materials and regenerative costs. Third, we further strengthened our lifestyle brand appeal which plays an important role in attracting new and younger customers. Collaborations such as our collection with KEIN as well as brand campaigns like Mavi For You, help us build a more restrictive and inspirational brand narratives. In addition, the Maviterranean collection continues to support our total look proposition and reinforce our brand story telling. As a result of these initiatives, we continue to strengthen both our brand equity and our customer base. Mavi remains the clear leader in the jeans category in Türkiye with 25% market share, while also maintaining a top 3 position in the overall apparel market. At the same time, our brand continues to resonate strongly with consumers. Today, in Türkiye Mavi, has the highest top of mind jean brand awareness with over 65% score, highlighting the strong emotional connection we have built with our customers. Importantly, our customer acquisition strategy also continued to deliver strong results. In 2025, we welcomed 1.4 million new customers to the Mavi brand, further expanding our reach and reinforcing our relevance across different customer segments. Let me now move to how we continue to elevate the customer shopping experience across all touch points. At Mavi, our approach to deliver a seamless and consistent experience across both physical, retail and digital channels, while continuously strengthening our customer-centric culture. Starting with retail. We have been upgrading our store concept to further elevate the in-store experience and strengthen our brand perception. In 2025, we upgraded 10 stores to our new format and have monitored significant improvements in all store KPIs. At the same time, we have enhanced our organization and field operations model, renewing our Happiest Mavi Customer approach to ensure that customer satisfaction remains at the center of everything we do in our stores. On the digital side, we continue to invest in improving the user experience on mavi.com. Initiatives such as Jean Finder, Product Recommendation Engine, Fit Analytics Size Recommendations and expanded payment options have made the online shopping journey easier and more personalized for our customers. We also expanded our delivery flexibility with the launch of PUDO, parcel local services across more than 1,000 locations in 9 cities. Finally, we continue to strengthen our customer experience culture through a data-driven approach. We systematically measure customer satisfaction across both retail and online channels through Net Promoter Score, customer satisfaction score and customer effort scores or rates, allowing us to continuously improve our processes and service quality. By combining these insights with customer journey mapping across all the touch points, we are able to further enhance the end-to-end customer experience and ensure that we consistently meet and exceed customer expectations. Building on our focus on customer experience, we continue to strengthen our retail, digital and omnichannel capabilities in an integrated way. Starting with retail. We expanded our physical footprint with over 4% detailed space growth, including net 8 new store openings, enhance store expansions in Türkiye. Internationally, we initiated our retail journey in the U.S., opening 11 stores since August 2025, which is an important step in our long-term global growth strategy. On the digital side, Mavi Online continues to grow strongly. Our Mavi app user base reached 5.2 million active users, while mobile remains the dominant channel accounting for 93% of traffic and 84% of online sales. We also expanded our geographic reach online, launching marketplace sales in 5 Eastern European countries, further diversifying our international digital presence beyond the MENA region. Finally, our omnichannel capabilities continue to scale up. In-store online sales grew a nominal 76% year-on-year, and we are now able to fulfill online orders from 341 stores. Altogether, our omnichannel initiatives generated close to TRY 1 billion in incremental revenue, highlighting the strength of our integrated channel strategy. Let me take a couple of minutes to talk about our best-in-class loyalty program, Kartus, which sits at the core of our growth strategy. Today, Kartus has approximately 6.1 million members who have been active over the past year, making it one of the largest and most engaged loyalty programs in the Turkish apparel retail. Kartus is not only a driver of revenue, but also the foundation of our customer insight capabilities. With 83% of our retail sales coming through the Kartus program, we are able to identify and understand the vast majority of our customers and track their behavior across channels. This high level of customer visibility allows us to build very detailed segmentation and personalized engagement strategies. We can segment customers across revenue, channel, category and product dimensions, enabling much more precise life cycle management and engagement. In 2025, we ran more than 300 personalized campaigns, which resulted in 20% growth in customers activated through personalized offers. Other than the key strength of the program is its ability to attract younger customers, which is critical for the long-term health of the brand. Of the new customers acquired in 2025, 70% were under the age of 35 and 41% were under 25, demonstrating Mavi's strong affiliation with younger generations. To further strengthen this positioning, we launched Kartus Genc, a dedicated program targeting the 16 to 24 age segment, offering talent benefits and communication across multiple channels. The program reached 325,000 members as of the end of 2025 and increase the share of young customers and new customer acquisition by 4 percentage points. Finally, we are increasingly using AI-driven predictive models to identify key moments in the customer journey and engage customers proactively. These models allow us to identify future Mass Mavi customers, our most valuable segment, who show roughly twice as frequently as the average customer and accelerate their transition into the loyal customer base. Technology continues to evolve at a very rapid pace. And as Mavi, we are closely following new developments to ensure that we remain at the forefront of the right trends. At the same time, we are building the necessary legal, governance and operational infrastructure to responsibly support future technology adoption. As of today, we can group our current AI and advanced analytics applications across 4 main areas, first, trend detection and forecasting where we use AI to analyze market data, fashion weeks and social media to identify emerging trends and translate them into product insights. Second, accelerating the design process where Generative AI tools have transformed sketches into visuals and support the penetration of technical product packages. Third, operational efficiency and automation where AI supports areas such as product content creation, internal knowledge tools for employees and marketing content production. And finally, predictive customer management where AI models help us better understand customer behavior and engage with customers more proactively throughout their life cycle. Beyond our commercial and technological priorities, we continue to place strong emphasis on people and culture, which we see as a key driver of our long-term continued success. At Mavi, we are proud of our inclusive organizational structure where women represent 60% of our workforce, 53% of management and 50% of our board reflecting our strong commitment to diversity and inclusion. We also invest heavily in leadership development and talent goals through structured programs such as our 9-Box Talent Framework, employee training programs and initiatives like Mavi Young Talent and Mavi NextGen, which help us develop future leaders within the organization. We continue to strengthen our connection with communities and younger generations through community and social impact initiatives, ranging from youth-focused cultural projects to partnership with leading NGOs and social organizations. Together, these efforts reinforce Mavi's position, not only as a strong brand, but also as a brand that resonates deeply with younger generations and the communities we serve. Before moving to our financial results, let me briefly touch on sustainability, which remains a core pillar of Mavi's strong -- Mavi's long-term strategy. We were particularly pleased to receive 2 important global recognitions this year. Mavi was ranked second on TIME and Statista's list of the world's best companies in sustainable growth, leading the apparel industry. In addition, for the first time, Mavi was included in S&P Global Sustainability Yearbook 2026 based on our Corporate Sustainability Assessment performance. Being listed among the leading companies globally in sustainability is a strong validation of the long-term work we have been doing in this area. Reflecting our ongoing investments in emission reduction and renewable energy, our net 0 targets are now approved by science-based target initiative. Our All Blue program also continued to expand in scale, reaching 31% of total revenue and 68% of denim revenue in 2025. This reflects the increasing integration of sustainable products across our core collections. Finally, we continue to expand our circular economy initiatives, including resale partnerships and social impact collaborations that extend product life cycles and reduce waste. Together, these initiatives reinforce our commitment to responsible growth, while strengthening the strong long-term resilience of the Mavi brand. At this point, I would like to sincerely thank our teams for their strong partnership, commitment and consistent execution. With that, let's now move on to review our annual financial results. Consolidated revenues declined 5% year-on-year in 2025 and realized that TRY 47.729 with Türkiye retail and online sales both declining 4%. Our EBITDA margin improved 40 basis points versus last year and reached 18.9%, and our net income realized at TRY 2.058 billion with 4.3% net income margin in 2025. With very strong operational cash generation in the year, our net cash position reached TRY 6.9 million to excess as of the year-end. Here, let me bring to highlight, 3 important announcements regarding shareholder returns. First, we will propose to the general assembly, a cash dividend distribution corresponding to 30% of pre-IAS 29 profit. which is equivalent to 58% of our reported distributable profit, including IAS 29 adjustments. Second, in order to further strengthen our corporate governance practices in line with International Best Standards, our Board of Directors has decided to cancel all shares repurchased today as well as any shares that may be repurchased until the completion of the buyback program. We believe this decision enhances transparency and capital discipline, while ensuring that our capital allocation continues to support long-term shareholder value creation. Moving on to review our channel performance. The softness in demand continued in the last quarter with Türkiye retail revenue, delivering flat results and Türkiye online declining 2%, bringing total Türkiye revenues to 1% decline year-on-year in real Turkish lira terms in the fourth quarter. Total Türkiye sales was down 4% in 2025. International revenue grew 5.9% in constant currency during the fourth quarter, ending the year with a 2.8% contraction year-on-year. The positive performance of North America business was the main driver of growth in the last quarter. Looking into our Türkiye retail business in more detail. In 2025, we opened 14 new stores and closed 6 stores, bringing our total number of all operated retail stores in Türkiye to 360. We also expanded 10 stores, increasing our total selling space to 197,000 square meters with an average store size of 547 square meters. Although, there have been notable delays in our store opening calendar in 2025, we are looking forward to more than bridging this gap in 2026. Expanding and upgrading our store network in Türkiye is an important priority for us. We approach these investments with disciplined capital allocation, focusing on projects with strong feasibility and short payback periods. Encouragingly, the stores opened in recent years continue to perform well and contribute positively to our results. On Slide 16, let me briefly touch on our like-for-like performance in Türkiye. In the fourth quarter, nominal like-for-like sales grew 28.8%, while in near-term sales declined 1.9%, reflecting the continued normalization in consumer demand. Despite this environment, sales volume increased 4.8%, supported by stable traffic. Including the contribution of new square meters, total retail sales volumes grew 6.3% in the quarter. Looking at the full year, like-for-like sales declined 6.7% in the real terms and 2.7% in volume trends, while total Türkiye retail sales volumes remained broadly flat. Basket size grew 33.7% in nominal Turkish lira terms, reflecting our pricing power as well as change in product mix. Moving on to Slide 17 to review category-based developments in Türkiye retail. Category trends were broadly in line with overall performance. Denim sales declined 5%, [ mid-center 85% ] and short 12%. These categories performed particularly weak in the first half of the year, but we witnessed a recovery in all these 3 of these categories since third quarter with positive volume growth in the second half. non-denim bottoms, jackets and accessories were stronger platforming categories, with accessories growing 9%, non-denim bottoms growing 1%. Going forward to review our online sales performance. Global online sales, including wholesale partners accounted for 11.4% of total consolidated revenues in 2025. In Türkiye online sales, consisting solely of direct-to-consumer channels declined 4% year-on-year representing 8% of total sales in 2025. Within this, revenues contracted 10% of marketplaces, while growing 1% on mavi.com. International sales grew 2% in inflation-adjusted Turkish lira terms, driven by the solid 19% growth of wholesale e-commerce operations. International mavi.com sales were also strong with 5.5% growth in constant currency. Overall, online accounted for 36.6% of total international sales. We continue to invest in digital infrastructure and customer experience, maintaining online as a full-price channel with margins comparable to retail, while at the same time ensuring competitiveness. Let's move on to review our consolidated financial results. Regardless of the aforementioned external challenges that on consumer purchasing power and increased promotional activity, we were able to expand our already strong gross margins by 270 basis points in the fourth quarter, and 70 basis points further in full year, realizing 51% in 2025. This result demonstrates the strength of our operational discipline from accurate planning and flexible sourcing to effective the pricing and brand management. Let's now review our EBITDA performance. In the fourth quarter, despite the 110 basis points negative impact of imputed interest rates, our EBITDA margin improved 280 basis points. The operating expense to sales ratio improved 40 basis points in the quarter with the operational leverage contribution. With this quarter's strong performance beyond 2025 with a commendable 18.9% EBITDA margin. Looking into our net income margin performance. The improvement in our operating margins was largely reflected in the profit before tax level. However, net income was significantly impacted by unusually high tax items in the quarter. In particular, the cancellation of inflation accounting in statutory financials resulted in a one-off negative impact of TRY 424 million on net income in Q4, which unfortunately also led to an actual tax cash outflow. Excluding this impact, adjusted net income reached TRY 276 million in the fourth quarter, corresponding to a 2.3% net income margin. For the full year, adjusted net income totaled TRY 2.482 billion, resulting in a 5.2% net income margin. On Slide 23, we will review our operational cash flow and working capital performance. Throughout the year, we continued to manage inventory and working capital with strong discipline, supported by our dynamic product planning a flexible sourcing strategy, which allow us to adapt quickly to demand conditions, while maintaining operational legibility. As a result, consolidated inventory ended the year 12% lower inventory, while Türkiye inventory declined 8% in units compared to the prior year, and importantly consists of entirely fresh new season products. This disciplined inventory management also supported strong cash generation. In the fourth quarter alone, we generated TRY 4.5 billion of operational cash flow, bringing total operational cash generation for the year to TRY 8.6 billion. Moving on to the next slide. In 2025, we invested TRY 2.6 billion in capital expenditures, corresponding to our CapEx to sales ratio of 5.5%. Approximately, 25% of this amount was a one-off investment related to our new Istanbul office headquarters, which moved in July 2025. Around 20% of total CapEx, slightly over $10 million was allocated to our retail investments in the United States. The remaining investments were primarily directed towards store openings, expansions and renovations as well as some R&D initiatives in Türkiye. Our net cash position remains very strong at approximately TRY 6.9 billion. As of year-end 2025 we have no outstanding debt winter. Foreign currency debt reflected in our consolidated financials relates only to our international subsidiaries, which predominantly borrow in their respective local currencies, effectively eliminating foreign exchange risk. Slide 26, a reminder of our targets for the year 2025 and their realizations. As you may recall, we revised our guidance following our second quarter results in September 2025. Our full year results came broadly in line with these updated expectations. While topline performance was slightly below guidance, partly due to the delays in our square meter growth targets, margin realization came in slightly stronger than anticipated. And finally, in the last page, we provide our guidance for the year 2026. Looking ahead to 2026, the ongoing policy measures aimed at bringing inflation under control in Türkiye are expected to continue weigh in on consumer spending. In this environment, our priority will be to stay disciplined around the areas we can influence, while continuing to execute on our long-term strategic roadmap. We see 2026 as a critical year in which we plan to step up our investments in our retail footprint in Türkiye. These investments are intended to strengthen our already prevalent Türkiye market position and grant us for future continued growth. Our focus remains on outperforming the apparel markets, strengthening the emotional connection between our customers and the Mavi brand and delivering consistent results through operational excellence, while laying the groundwork for what we expect to be a stronger trading environment in 2027. Supporting these aspirations, we plan to open net 15 stores, expand 15 stores, and upgrade 30 stores in Türkiye. We will continue our retail journey in the USA by opening 6 more retail stores, all in best-in-class shopping malls and premium locations. With that, we expect 5%, plus or minus 1% consolidated revenue growth and 18% plus or minus 0.5% EBITDA margin on a reported basis, including inflation accounting. We target to maintain our net cash position, and we plan to invest around 6% of revenue on capital expenditures. As always, let me say some final words on the current quarter and the trading environment. Generally, being a soft demand month in February, we have achieved 27% growth in Türkiye retail sales. And the first 2 retail weeks of March show a 74% growth in Türkiye retail with the positive impact of Ramadan Holiday sales. This 74% adjusted for the holiday calendar sales growth probably comes around something like 26%. At this point, I am more than happy to take your questions.

[Operator Instructions] We already have our first question coming from [indiscernible]

Congratulations for the results. I have 3 questions. The first one is as you continue to expand in the U.S., how does store-level metrics, such as payback periods, EBITDA margins and growth performance compared to Turkey operations. Also what is a typical initial CapEx per store in the U.S. And how does it differ from Turkey. I would like to ask similar questions for your upgrade and renewed stores also. And lastly, what is the share of U.S. operations in 2026 guidance?

On a macro level, we plan to come back to you with the U.S. update probably at the end of quarter 2 because I'm just -- this I'm mentioning as a macro picture because by then, we will have opened these stores for quite a few months, and we will have more data coming in. But I will try and answer all the questions that you positioned in terms of EBITDA payback, et cetera. The U.S. payback, in Turkey, typically, we target less than 2 years, and we, at times, come close to a year, sometimes 18 months in terms of payback periods when we open up a new store. The case in the U.S., when we started this -- our strategic roadmap is more in the 3-year vicinity. So it is -- it will take a longer period of time for the paybacks to come in and deliver results. In terms of CapEx, in Türkiye we pay around $700 per square meter in terms of when we make investments. The U.S. is a bit more expensive. It's more like in the to $1,000 to $1,500 CapEx for each and every store. The good news in terms of the total U.S. picture, despite this long time in terms of ROI and CapEx investments and also marketing investments. We are part of True Quality program, which helps us, for the foreseeable couple of years, to get paybacks in terms of some of the CapEx we are investing, half of the marketing investment we are putting in and also we are getting a lot of brand support as we open up new businesses. That's why I want to come back within 6 months to you guys to look at it from a normalized version when the stores are up and running and when we are 15 stores because that's the board decision we made. We put -- we allocated a certain amount of money that we believe that we could handle. And we made a cautious choice to go to, a, shopping malls across the U.S. so that we could have a presence and a better understanding of how and which part of U.S. is responding to the Mavi proposition. Therefore, it's too early to say how things are going. But all I can say is U.S. is an interesting sort of bet on Mavi Türkiye side. We have the cash. We have the history in the U.S. And therefore, we find it important that we had retail normal also that we can translate some of this into our success in the U.S. market. Did I hit all the answers I don't know if I miss something, please do.

Shareholder's revenue.

Share of U.S. revenue, I mean, as you know, 90-plus-percent is Turkey and share of total North America or U.S. is more like 5%. And the other 5% is split up half between Russia and Europe. And there is also a bit of export markets also included, which is Middle East and Georgia, Azerbaijan, et cetera.

One more question. Could you elaborate on your Turkey stores, which upgraded already also.

Upgraded stores, which? I missed the last part.

Like store-based metrics like U.S.

With the upgraded stores, couple of things. First, whenever we come here, taking current stores and trying to grow them in square meters. And if we cannot, for sure, we are, of course, still applying the upgraded version. These stores typically have better product turn, faster product turn. So we are getting a great benefit in terms of total revenue that is being generated. We are also seeing both units per transaction and frequency going up in both of these factors going up as we open up the new stores. Again, I think what is going to be more interesting for all of us is, as you can see, this year, we're putting a lot of push and trying to do a bit of a revenge come back from last year, where we were a little falling behind versus what we have planned for. And that, as I explained, just a while ago, the topline growth, we missed that a bit. So I'm not happy from that perspective. But as a team now, we have geared up and we have really a good game plan. And we have the cash, we have the investment plans, and we have the locations sorted out and agreed with shopping malls. So this year, you'll see a mega push in terms of sort of see it as a new car model coming out. So the whole -- a significant percentage of our sales, revenue-generating stores will have gone through upgrades, refurbishments and/or expansions on new store openings at the bigger square meter. You may recall that we started, just a couple of years ago, we were at 500 square meters. Now we are at 550 on average total square meters, but the last 2 shops, for instance, we opened up one is very senior Park and one in Istanbul forum are more than 1,200 square meters. So it's a mega jump in terms of what we are achieving. And what we're observing is OpEx ratios are coming down. Traffic is going up. Basket size is going up, municipal transactions are going up and also frequency is going up. So all the indicators are very good. And it's also giving our category teams a boost in morale because they also want to expand and capture much more of the wardrobe of the customer. Therefore, we are also excited from that perspective also because we can extend our line expansions, staying true to our casual routes, of course, and our denim heritage, but also expanding the wardrobe so that we can sell and put on offer great products. Thank you.

Ali Akkoyunlu can we have your question now.

Yes, I think you've touched on the issue a little bit. But what I was wondering is, you had good cash flow, especially in the fourth quarter, given the market conditions, good margins. But as you also said, the sales side is a bit softish and yet you are guiding for a 5% real growth for next year. What would be the key catalyst for that sluggish sales trend to turn around?

Because it sometimes gets a bit distracted in the total presentation. We were able to grow our volume last year, roughly 6% in total. And despite not having opened up a lot of stores, we did expand and opened up new stores, which contributes roughly 3%, 4% to our base moving into this year. Also early on in this year, we've opened up quite a few big stores. So we've been really rushing really ahead of the Bayram sales in January or early February to open up these 1,000 to 1,200 square meter stores and refurbishing some of the key stores as fast as we can. So if you look at the total momentum we have and do the math in terms of what KPIs are showing us, indicating us or what we can achieve when we do this transformation. It actually translates into a healthy growth in volume growth for this coming year. The first half of the year will be -- I mean it will be busy, but the second half will be even busier because there are 2 Bayrams. We are also holding off some of the investments because we don't want to close our stores during these high Bayram sales periods and pre, let's say, summer sales coming in. But starting July, once again, there will be another push in terms of opening new stores and expanding and refurbishing a lot of our stores. So when we do the math, looking at base and categories and customer trends, we are feeling quite okay. Some of the sluggishness versus last year, again, in terms of what we guided and what we delivered, we miscount or maybe -- you may recall, we started this year, we will open up roughly 20 stores, and we ended up 8. I mean, so that was sort of a major disaster something that we didn't expect. So from that point of view, we're really unhappy. But I think in the last quarter onwards, we've been really working hard to do, as I mentioned, revenge come back. And I think with the products we have, the portfolio, the marketing CapEx, we are preparing, I think we can deliver this. Of course, there is one comment and we can always discuss about this. But when we finalize all of this budget and got the approval from the Board. This Iranian war has not started. But at this point in time, so far, as some numbers are indicating in terms of pre-Ramadan Holiday sales and the first 6 weeks of the year. Sales are going as per our budget. I'm glad. So we still remain optimistic in terms of what we can deliver. There will be, of course, contribution coming from U.S. and international. Remember, there will be all of a sudden, almost more than 10 stores in the U.S. retail stores. That was not in the race that will also -- it's not major and critical. It's not a big part of our business. But in terms of topline growth, they will also help contribute to the topline growth this year.

We have a question from Melis on the chat screen. I will read it. Can you give some hint about IAS 29 2026 revenue, EBITDA margin and effective tax rate guidance. With respect to annual net addition retail space in Türkiye, can you provide percentage in terms of new stores and store expansion. Regarding recent unrest in the Middle East and global litigation, what is your view on possible impact on your operations? How is consumer environment in Türkiye and U.S. and competitive environment. Can you touch upon working capital management plans in 2026? A lot of questions.

Do you want to handle any of this...

Yes, maybe like the first one is actually about the revenue guidance. We just talked about it actually a little bit. I want to also mention that the assumption for inflation is 25% here. So that also has implications in terms of the onus in Middle East, if it has impact on inflation and inflation in Türkiye, that might also impact our results, of course. But it's important to note that we took 25% of the assumption here. Also with respect to annual net addition to retail space and the thus figures that you see on the screen. These 15 stores openings and expansions, they come to around 10 percentage square meter edition in the whole year. Of course, the revenue impact will be much more visible in 2027, but we should be able to see some of it here in this year.

It's around 20,000 square meters, and we are roughly sub-200,000 square meters at this point in time. So this addition of square meter growth and new store opening is roughly a 10% boost. Of course, as Duygu mentioned, there will be openings and closures and so on, there are periods of loss of sales and refurbishments and moving stores around, et cetera. But this will translate probably on average a 3%, 4% incremental topline growth, coupled with the other 2%, 3% that's coming from the other stores that we opened last year, this 5% should be achievable, just to reiterate what we just talked a second ago. In terms of our business dynamics, you have to understand that in terms of product, product lending, gross margin sort of a bulk of it for the first half of year this is already locked in, meaning you start the process of getting the raw materials, booking capacity, deciding on volume, et cetera. From that perspective, if I look from February 1 towards the end of July, August, we feel as Mavi in terms of our flexibilities open to buys, flashes, et cetera, but the raw material we have in hand that we can manage our gross margin and the product offering, and we remain agile for the consumer. In the second half of the year, it is more than likely that -- and it has happened also a couple of years back, we may see some impact on the logistic costs due to oil cost going up, some energy costs coming in, and that will be our challenge, how we deal with the energy price increases as the cost base is coming up, whether it's the simple electricity or the simple gas delivery, online delivery or redistribution across the many stores. I think Mavi's generally speaking, about position because we are quite efficient. And in terms of our sell-through rates, what we buy, how we distribute our products into the stores, returns, et cetera, we do a pretty good job. But there will definitely be a negative impact coming from there. And we will have to see how much of that we can mitigate in those product mix, gross margin and campaigns. So that's a bit of an uncertain and as Duygu mentioned, we started the year or budgeted 25% inflation. And at this point, this portion of the KPI is a bit of a -- it's clearly under stress. But for us to come in, I mean, at the beginning, early days of the year to change our target is, I think, would be premature. We can talk more when we finalized the first quarter and come together see if things are going better or not because we also don't know whether this conflict will be lasting for a couple of more weeks or become a more regional and entangled war. So let's hope for the prior, and let's hope that it passes by quickly.

Cemal Demirtas has a question, please go ahead.

Sorry, if I repeat the same questions. I miss portion of the presentation. But I would like to ask, it's very early, and it's very cloudy nowadays in terms of the global perspective. But how do you see the impact of those energy increases on your the cost size overall. I know we said it early, but just in terms of the micro things, assuming that things will stabilize maybe at a higher level in terms of the oil price and others. And the procurement side also, does there any these tensions, continuation of these tensions at some level, not as high as the highest level. What would be the impact on your operations going forward?

In terms of overall supply chain sourcing, the tensions and where this is taking place has little impact on our current trading amount. So in terms of where we make our blue jeans, where we produce our t shirts, all the global aspirations in terms of things we move around the shop around, whether it's Vietnam, Bangladesh, China or Egypt, that set up vis-a-vis the current base from a geographical distribution perspective, it's not, let's say, we don't foresee any product supply issues. Coming back to our initial proposition, and this is what we were discussing. The -- of course, the logistics cost, the transportation cost due to energy costs are going to go up. These are typically -- of the total proposition, typically 4%, 5% of the cost structure. So let's assume there's a 100% unexpected hit there. So that makes the 4%, 5% pressure on 3%, 4% gross margin pressure. But then it becomes what product we sell in the product portfolio, how we can also look into product mixes, et cetera. So generally speaking, right now, let's say, in total terms of Mavi's boardroom or management room, we are more in a wait and see mode right now. We are not panicked, We are not stressed out right now at this point in time. When I talk with my sourcing and manufacturing business partners, business is going as per plan with some expectations, of course, pressures coming, probably starting second quarter onwards into the equation. And that's when I will have more insight. I mean, as you mentioned, it's early days and it's cloudy and uncertain. But once we meet that at the end of first quarter, probably there will be more clarity. And I can guide you for what's happening this way or that way. Generally speaking, I think we've had a few conversations with both the international and local investment community. Regardless of all the stresses that are going on currently, our approach for better or worse is to make a step change this year. So our focus and energy is continue to build the brand, do a lot of next-generation type of marketing, segmented communication, product innovation at the same time, physically really expanding our footprint in Türkiye and making a sort of an updated version, upgraded version, a happier and a seamless shopping experience, both from product and service point of view in the Turkish environment. Therefore, we are putting a lot of betting and we're putting a lot of our money into a healthy CapEx. I say healthy because when we look at our returns in Türkiye, it's typically, as I mentioned, less than 2 years, and sometimes coming close to a year. So it's between a year or 2. Even if this deteriorates a bit, it's still a very good return. And for a company like ours, which doesn't have a lot of debt, has the energy has the brand aspiration, it is, I think, the right push that we should be making. And so from that perspective, our momentum internally is very positive, despite the negative. We're cautious, we're smart, we are dealing with the problems. But the environment, the psyche we have in the office, there's is going to be a lot of nice good investments that will ensure continued sustainable growth for Mavi for many years to come. So let's see how that plays out. So a few percentage points of topline growth here or 0.5% margin there pressure is probably less of our concern, I would say, as a company, but more we are in an effort to step up for a continued growth for elevated growth for many years to come. So that's my commitment to you guys to make sure that we become even closer to the customers, give them a better offer, and at the same time, do this through growth, whatever that growth might be within the current apparel industry. Again, as I mentioned, when we started the year, our ambition is to beat the apparel market. And we still believe we can continue to gain share, both in menswear, both in womenswear, we can sell more jeans. There are still more customers that we can acquire and increase wardrobe share. And we will be relentless and we will chase after that as always. Thank you.

And as a follow-up related to your trading update, in February, you grew by 27%. And in your March calculation, how do you make that calculation, 74% in 2 weeks? But when you adjust '26, I wonder how you reached that number. Maybe the calculation, maybe I can ask after the meeting. And related to that, what was the price inflation on your side because it implies 2%, 3%, the real contraction when we go with the 29% year-over-year average CPI increase in the first quarter, let's say, the pricing side or in the first quarter, it looks like we are going to be flattish or lower. When we look with this perspective, we don't have the April figures, but just an indication from the trading update.

The acquisition as follows, when you do the Ramadan calculation, you take weeks, not sort of days. So last year, prior to Bayram 2 weeks versus this 2 weeks. So we do an apple of -- it's not 100% apple-for-apple because seasons are moving. Timing is moving, political incidents like last year, we had some Istanbul issues, et cetera. But regardless of that, as a retail company, we work and do our planning on a 52-week calendar. And when we do -- when the Bayram is coming, we look at the pre-Bayram, during Bayram and after Bayram year-on-year with the similar timelines being moved left and right, 10, 15 days. So I hope that was clear for you. I mean when we did...

Yes. Yes.

Okay. Good. So when it comes to the other part, in terms of flattish growth, et cetera, you have to recall that we are coming out of January into February and March. These 4 to 6 weeks is where we are depleting or selling out the seasonal products. So in terms of revenue versus what we are delivering and into a price point and how the price increases are kicking in, it's a bit deflated. But within that product portfolio vis-a-vis the budget in terms of pricing capability. Do we see a capability by Mavi to take 25% to 30% price increases per ticket items, we do. So -- and -- is the customer when we have the new season products for March, for instance, being placed in the shops, buying those products at those new price, they are also going positive. Over and also, just another point. As you can imagine, we are tracking our prices vis-a-vis the competitors. So we're also seeing if our price point vis-a-vis the competition is competitive and are we following and I think that also seems all green. So in terms of this period where Bayram has moved in a little closer to the year opening a bit more cool period, transitionary period. And in terms of the numbers that we are generating new products coming in at the price point, I mean, taking aside the Iran war or the uncertainty there. Normally, everything else is more or less in line with this 5-plus percent growth that we budgeted for. Iran is an unknown and all these oil prices are unknown, but this is something we will have to discuss, I think, after the first quarter. I find it a bit premature to talk about it right now. So again, one more part, if the traffic and consumer activity continues as the first 6 weeks, we should expect the quarter to come in as per our budget because there is also let's say, the movement of masses that we can track in terms of how people are coming, frequency, shopping habits, basket size, UPTs, et cetera, from that perspective, it is going as per plan so far.

[indiscernible] would you like to go next?

So I have one question. I understand from your statement that you haven't decided whether to use the remaining funds for the share buybacks until the June 10. So could you maybe provide us a perspective about this? How should we think about it in terms of capital allocation, in terms of the valuation, where you see the remaining share buyback will be a profit?

I mean our group is as follows. First, I mean, the principles we have at Mavi. As you know, as you just witnessed, just ahead of a quarter-end announcement, we expect the quiet period and we don't trade. After -- right now, we are again open to trade. So we have now got the results out. We have shared with you the outlook that we want to deliver. Therefore, from here, coming from, let's say, today onwards, we are "in the markets" to stand beside our share price and follow how the market is trending in terms of our shares. So if you ask me, personally, current share prices still low. So is this still a good time from a Mavi's CEO perspective to invest into Mavi buying shares, Yes. But again, our perspective is not one of trading against you it's more supporting the market and signaling the right direction in terms of what we think is a fair price. Therefore, for the rest of the year, we have half of our funds that we have not spent which is around TRY 500 million. And as each quarter and we do the announcements and then we get into the market, and we track with our partners and our board and our committee, buyback committee, to see where the track is going and place orders. When we see the stock softening are going down below a fair value. So I do -- if I were you, I would expect us to continue this, what you saw in the first half, expanding the first half of the program. It's more than likely that we will continue in the same direction. But we will be able to spend everything or not. That's another question. But we will definitely be interested in tracking our shares and supporting our shares and signaling the market when it goes soft. This is what I can talk right now.

Do we have any more questions?

Okay, it seems we are all set. Should you have, as always, any questions for me or the team here at Mavi more than happy to oblige. We look forward to seeing you soon and being in touch. And I would like to take this opportunity to thank you all, and wish you all a very happy, healthy, safe New Year. And all the best. Take care. Bye-bye.