Birkenstock Beats Revenue Targets
The company warned that 2024 margins would likely see a "modest headwind" due to costs associated with ramping up and expanding the business.
Birkenstock kicked off its first quarter on the public markets with strong sales results, but a muted profit outlook for 2024.
Shares of the German sandal company were down more than 10 percent in premarket trading after the company, which debuted on the New York Stock Exchange in October, warned that 2024 margins would likely see a “modest headwind” due to costs associated with ramping up and expanding the business.
For the fiscal year that ended on Sept. 30 the company's revenues were 1.49 billion euros (or $1.62 billion at current exchange), up 20 percent from the same period the prior year. Net profit was 75 million euros, down from 187 million euros the prior year. Earnings per share were 0.41 euros, down from 1.02 euros the prior year.
For the fourth quarter, sales were up 16 percent to 374.54 million euros (or $407.7 million at current exchange), which beat analysts' expectations of $390.98 million. Adjusted profit per share was 0.14 euros, which missed estimates.
Birkenstock chief executive officer Oliver Reichert said in a statement that 2023 was the “most successful year” in the company's 250-year history.
“For fiscal year 2024 we are confident to further grow our business by tapping significant addressable geographic, category extension and distribution white space, remaining strongly committed to delivering uncompromising premium quality to our customers and undeterred by the broader macroeconomic backdrop,” Reichert added.
For fiscal year 2023, sales in the Americas were up 21 percent, Europe was up 18 percent and Asia Pacific, Middle East and Africa (APMA) was up 24 percent. Birkenstock also increased its direct-to-consumer penetration by 200 basis points to 40 percent.
Looking ahead, Birkenstock expects 2024 revenues of between 1.74 billion euros to 1.76 billion euros, which would represent growth between 17 percent and 18 percent compared to 2023.
The company added that it plans to invest 150 million euros into expanding its store presence and production capacity in 2024.