Birkenstock (BIRK), the German footwear company listed on the New York Stock Exchange last year, reported fiscal fourth-quarter revenue of €456 million ($478.4 million), a 22% increase that surpassed analyst expectations. Adjusted earnings per share came in at €0.29, topping estimates of €0.26. The company’s stock climbed 5.6% to $59.22, marking a 22% gain year-to-date as Birkenstock continues to recover profitability after a challenging year.
The company’s gross margin for the fiscal year ended September 30 fell to 58.8% from 62.1%, impacted by production capacity expansion and higher wholesale revenue, which generally carries lower margins. However, Birkenstock forecasts margin improvements in fiscal 2025, driven by increased use of new production facilities and targeted price adjustments. The company expects 15% to 17% revenue growth in constant currency for the upcoming fiscal year, supported by robust wholesale and retail channels.
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Market Overview
- Birkenstock’s Q4 revenue grew 22% to €456 million, beating expectations.
- Net income reached €52.5 million, with adjusted EPS of €0.29 surpassing forecasts.
- Shares rose 5.6% to $59.22 and are up 22% year-to-date.
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Key Points
- Gross margin fell to 58.8% in FY 2024 due to capacity expansion and wholesale growth.
- Birkenstock targets 15%-17% revenue growth and improved margins in FY 2025.
- The company is expanding into orthopedic, professional, and closed-toe footwear categories.
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Looking Ahead
- Higher production efficiency is expected to drive margin recovery in FY 2025.
- New retail store openings will support revenue and brand visibility.
- Analysts remain optimistic about the brand’s growth trajectory and profitability.
- Birkenstock’s Q4 revenue growth of 22% and adjusted EPS of €0.29 beating expectations highlight strong operational performance and brand resilience.
- The company’s forecast of 15%-17% revenue growth in FY 2025 demonstrates confidence in its wholesale and retail channels, supported by product diversification.
- Margin recovery in FY 2025, driven by higher production efficiency and targeted price adjustments, positions Birkenstock for improved profitability.
- Expansion into orthopedic, professional, and closed-toe footwear categories opens new revenue streams and enhances its competitive positioning.
- New retail store openings will boost brand visibility and support long-term growth in key markets.
- The decline in gross margin to 58.8% from 62.1% reflects challenges in managing production costs and wholesale expansion, which could pressure profitability further.
- Higher wholesale revenue, while driving growth, carries lower margins, potentially limiting overall earnings improvement despite revenue gains.
- Economic uncertainties and fluctuating consumer demand could impact Birkenstock’s ability to achieve its ambitious FY 2025 growth targets.
- Rising competition in the global footwear market may challenge Birkenstock’s efforts to expand into new categories like orthopedic and professional footwear.
- Operational risks associated with scaling production capacity could delay margin recovery and strain resources in the near term.
Birkenstock’s strong Q4 performance highlights its resilience and brand strength as it navigates margin pressures and expands production capabilities. The company’s balanced wholesale and retail strategy, coupled with targeted product diversification, positions it for sustained growth in fiscal 2025.
With a focus on improving operational efficiency and expanding its market reach, Birkenstock aims to solidify its position as a leader in the global footwear market. The coming fiscal year will be pivotal in determining how well the company balances growth with profitability.
