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Birkenstock beat market expectations for fourth-quarter results on robust demand for its pricey footwear and forecast a recovery in margins in fiscal 2025, sending the company’s shares up 7 percent on Wednesday.
With fresh styles becoming a priority for consumers, Birkenstock’s sandals and closed-toe clogs have drawn new customers both at its own stores and at retailers.
The company bypassed steep discounting trends evident during the holiday shopping season, which Birkenstock executives said was off to a strong start globally.
“The expansion of ranges into more closed-toe silhouette has helped boost revenue, given that they offer multi-season wear,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.
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Germany-based Birkenstock’s average selling prices across its product range were up 8 percent in fiscal 2024, in part due to higher sales of clogs, the company said, adding that closed-toe styles now made up about a third of its business.
The company has invested in expanding its global store presence and increasing manufacturing capacity this year to meet demand.
While it led to a 330-basis point drop in gross margins in fiscal 2024, Birkenstock forecast a recovery in margins in fiscal 2025 as it ramps up production from new facilities.
The company reported fourth-quarter revenue of €455.8 million ($478.27 million), compared with the average analyst estimate of €439.2 million, according to data compiled by LSEG.
However, Birkenstock’s forecast for fiscal 2025 revenue to increase between 15 percent and 17 percent was below estimates of 17.5 percent growth.
“It would appear with this incredibly healthy growth, the company is choosing to adopt a conservative approach that they expect to be able to meet and beat,” BMO Capital Markets analyst Simeon Siegel said.
On an adjusted basis, Birkenstock earned €0.29 per share beating estimates of €0.26.
By Juveria Tabassum and Helen Reid
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