Birkenstock Reports Strong Fourth-Quarter Results

By Juveria Tabassum

Reuters – Birkenstock beat market expectations for fourth-quarter results on Wednesday, driven by robust full-price sales of the German footwear maker's pricey sandals in the U.S. and Asia.

With fresh styles becoming a priority for consumers, particularly in its largest market in the Americas, Birkenstock (NYSE:BIRK)'s sandals and closed-toe clogs have drawn new customers.

The company's average selling prices across its product range rose by 8% in fiscal 2024, partly due to higher sales of clogs. Birkenstock noted that closed-toe styles now comprise about a third of its business.

Birkenstock reported fourth-quarter revenue of 455.8 million euros ($478.27 million), surpassing the average analyst estimate of 439.2 million euros, according to data from LSEG.

"The expansion of ranges into more closed-toe silhouettes has helped boost revenue, given that they offer multi-season wear," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Birkenstock's shares experienced volatility in premarket trading, ultimately down slightly. The company forecast fiscal 2025 revenue growth below market expectations.

Despite cooling inflation, shoppers have approached non-essential purchases cautiously, carefully comparing prices, a trend seen during the ongoing holiday season. This caution has resulted in some softness in retailers' expectations in the U.S. for 2025.

Birkenstock has invested in expanding its store presence in markets like Japan and China, as well as increasing its manufacturing capacity this year to meet global demand.

While this has led to a 330-basis point drop in gross margins in fiscal 2024, Birkenstock indicated a recovery in margins for fiscal 2025 as output increases from its new production facilities.

The company forecasts fiscal 2025 revenue growth between 15% and 17%, compared to estimates of 17.5% growth.

On an adjusted basis, Birkenstock earned 0.29 euro per share, beating estimates of 0.26 euro.

($1 = 0.9530 euros)