Financial Data and Key Metrics Changes - The company achieved a revenue growth of 23% year-over-year, reaching EUR481 million in the second quarter of fiscal 2024, marking the highest revenue level for this quarter in the company's history [41][72] - Adjusted EBITDA was EUR162 million, up 7% compared to the same quarter last year, with an adjusted EBITDA margin of 33.7%, down 470 basis points from the prior year [31][72] - Adjusted net profit increased by 3% to EUR77 million, with adjusted EPS remaining flat at EUR0.41 due to higher general and administrative costs [31][72] Business Line Data and Key Metrics Changes - Revenue from the top-five core silhouettes grew over 20%, indicating strong performance in the classic product lines [26][41] - The DTC channel grew by 32% year-over-year, while B2B revenue increased by 20%, demonstrating robust demand across both channels [25][72] - Closed-toe silhouettes saw a penetration increase of over 25%, up 900 basis points from the prior year, with significant growth in premium offerings [26][28] Market Data and Key Metrics Changes - The Americas region experienced a revenue increase of 21%, with DTC growth outpacing B2B growth [44][72] - APMA was the fastest-growing segment, with a revenue growth of 42%, driven by both volume and ASP increases [46][72] - In Europe, revenue grew by 21%, significantly outperforming the overall retail market, with closed-toe silhouettes growing over 80% [28][72] Company Strategy and Development Direction - The company is focused on expanding its membership program, which has seen a 40% growth, to enhance customer loyalty and engagement [41][96] - The strategy includes disciplined distribution and a focus on premium products to drive ASP growth, with a commitment to maintaining brand equity [50][72] - The company is raising its fiscal 2024 revenue growth forecast to 20% on a constant-currency basis, reflecting confidence in sustained demand [24][50] Management's Comments on Operating Environment and Future Outlook - Management noted that despite a challenging consumer environment, the brand's strength is reflected in strong sales and demand across all segments [30][41] - The company is optimistic about the second half of the year, with no current indicators suggesting a slowdown in growth [77][96] - Future pricing strategies will be evaluated to offset inflationary pressures while maintaining consumer demand [67][103] Other Important Information - The company opened six new retail stores in the second quarter, bringing the total to 57, with strong performance from new locations [25][81] - Inventory levels were at EUR651 million, approximately 40% of revenue, down from 44% in the previous year, indicating effective inventory management [73][72] - The company is investing in production capacity expansion, with capital expenditures totaling EUR17 million in the second quarter [73][72] Q&A Session Summary Question: Can you elaborate on the brand's continued global momentum? - Management expressed confidence in maintaining a revenue growth forecast of around 20% for the full year, consistent with a long-term growth trend [77] Question: How is the sandal business performing since the end of the quarter? - The sandal business has shown strong momentum, with significant sell-through rates and a transition towards premium products [59] Question: What is the outlook for gross margins and production facility optimization? - Management indicated that 2024 is a transition year, with expectations for improved margin absorption starting in 2025 as production facilities become more efficient [86][72]

| --- | --- | --- | |-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | 1,609 | | 1,299 | | | | | | 483 | | 502 | 02 | --- | --- | --- | |----------------------------------------|-----------|-------| | Operating Cash Flow | FY23 \n57 | FY24 | | t/o: Funds from operations | 149 | | | t/o: Changes in working capital | (91) | | | Investing Cash Flow | (25) | | | Financing Cash Flow | (29) | | | t/o: Net IPO proceeds | — | | | t/o: Repayment of loans and borrowings | (2) | | | t/o: Cash interest ...

Investors interested in stocks from the Shoes and Retail Apparel sector have probably already heard of Skechers (SKX) and Birkenstock (BIRK) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earning ...

Financial Data and Key Metrics - Revenue for Q1 2024 was EUR 303 million, up 26% YoY, driven by growth across all segments and channels [9] - DTC revenue grew by 30% YoY, contributing to 53% of total revenue, while B2B revenue increased by 22% [9] - Adjusted EBITDA was EUR 81 million, up 12% YoY, with an adjusted EBITDA margin of 26.9%, impacted by capacity expansion and unfavorable currency translation [27] - Gross profit margin was 61%, down 70 basis points YoY, due to capacity expansion and currency effects [87] - Cash and cash equivalents stood at EUR 169 million, with inventory buildup in preparation for spring-summer 2024 wholesale shipments [28] Business Line Performance - DTC channel penetration increased further, with approximately half of revenues generated from membership program members [5] - B2B revenue growth was driven by expansion in categories like closed-toe silhouettes, with significant growth in existing partner stores [15][45] - Closed-toe silhouettes, including clogs, contributed more than half of total revenue in the APMA region [8] - The professional product category delivered the second-highest growth rate in terms of value and units [94] Market Performance - Americas revenue grew by 19%, driven by strong DTC performance and increased penetration in existing B2B channels [5][15] - Europe revenue increased by 33%, with strong sell-out performance during the holiday season and successful price adjustments [16][120] - APMA was the fastest-growing segment, with revenue growth of 51%, driven by DTC and digital channel expansion [8][52] Company Strategy and Industry Competition - The company is doubling its production capacity in Germany and Portugal over the next three years to meet growing demand [46] - Strategic focus on premium products and DTC channels, with a goal to maintain a gross profit margin over 60% and an adjusted EBITDA margin in the low 30s mid-term [30][112] - Expansion into new categories like closed-toe footwear and professional products is driving growth and diversifying revenue streams [92][94] Management Commentary on Operating Environment and Future Outlook - Management remains confident in the company's ability to sustain strong performance through 2024 and beyond, despite temporary margin compression from capacity expansion [14][30] - The company is successfully recovering inflation through selective price increases and optimizing channel and product mix [87][112] - The shift towards intentional purchasing by consumers is benefiting the brand, with high levels of full-price realization across all distribution points [4][95] Other Important Information - The company repaid EUR 525 million of debt, reducing net leverage to 2.6% as of December 31, 2023 [98] - Capital expenditures of EUR 80 million were primarily related to production capacity expansion [98] - The company launched new products in expansionary categories, including a professional line at the A+A trade fair, which received strong demand [94] Q&A Session Summary Question: Impact of inflation and capacity utilization [21] - The company is managing inflation through selective price increases and is on track with capacity expansion, which is expected to impact margins temporarily [30][112] Question: Closed-toe footwear performance and mix [22][42] - Closed-toe silhouettes now exceed sandals in revenue share, with clogs, boots, and sneakers driving growth [22][64] - The Boston clog remains a top performer, but other closed-toe products like the Highwood and Prescott boots are also exceeding expectations [102] Question: Gross margin and inventory levels [35][69] - Gross margin is expected to be lower in Q2 due to seasonality and higher wholesale share, but the company remains confident in its full-year guidance [58][71] - Inventory levels are in line with historical patterns, with a focus on preparing for spring-summer wholesale shipments [28][109] Question: Growth trajectory in APMA region [51] - The APMA region is experiencing strong growth, with price increases well-received and no negative consumer impact [52] - The company is expanding its DTC and B2B presence in the region, with a focus on Greater China, Japan, and Southeast Asia [52] Question: ASP growth and premium product shift [34][115] - ASP growth is expected to be in the mid- to high-single digits, driven by premium products and channel mix [115] - The shift towards premium products, including closed-toe footwear, is contributing to higher ASPs [92][115] Question: European market performance [119] - Europe has completed its transformation plan, with strong sell-out performance and successful price adjustments [119][120] - The company is well-positioned in the European market, with full-price realization superior to the market [120]

Birkenstock traded flat in the US premarket on Thursday as earnings slumped despite the sandal maker beating revenue guidance over the festive period. Revenues jumped 26% year-on-year to €303 million, beating out Wall Street predictions of just over €288 million, largely a result of both higher prices and increased demand in the States. However, earnings per share came in at €0.04, below analyst expectations of €0.09 as the group’s gross profit margin slipped 70 basis points to 61%. Birkenstock said the fal ...

Revenue Performance - Revenue for the three months ended December 31, 2023, was €302.9 million, representing a 22% increase year-over-year and a 26% increase on a constant currency basis[53]. - Revenue growth by region included 19% in the Americas, 33% in Europe, and 51% in the APMA segment on a constant currency basis[53]. - Revenue increased by €54.4 million, or 22%, to €302.9 million for the three months ended December 31, 2023, compared to €248.5 million in 2022, with strong demand across all product categories and segments[78]. - Revenue from the B2B channel rose by €22.6 million, or 19%, to €140.4 million, driven by strong growth across all regions[81]. - Revenue from the DTC channel increased by €31.2 million, or 24%, to €160.7 million, attributed to growth in APMA and higher average order values[81]. - Revenue for the Americas segment increased by €21.7 million, or 14%, to €181.5 million, driven by strong sales in the DTC channel[95]. - Revenue for the APMA segment increased by €12.6 million, or 47%, to €39.5 million, supported by new retail store openings and strong online sales[95]. Profitability Metrics - Gross profit margin was 61.0%, a slight decrease from 61.7% due to unfavorable currency translation and temporary under-absorption from ongoing capacity expansion[53]. - Adjusted EBITDA grew by 12% from €72.4 million to €81.4 million, with an adjusted EBITDA margin of 26.9%, down from 29.1%[53]. - Adjusted profit before tax was €32.6 million, an increase from €26.9 million, with an adjusted profit before tax margin of 10.8%[64]. - Adjusted net profit for the three months ended December 31, 2023, was €16.7 million, down from €26.5 million in 2022, reflecting a margin decrease from 10.7% to 5.5%[66]. - Profit from operations for the three months ended December 31, 2023, was €35.6 million, a substantial increase of 150% compared to €14.2 million in 2022[77]. - Net loss for the three months ended December 31, 2023 decreased by €2.0 million, or 22%, to €7.2 million, with a net loss margin of 2.4%[90]. - Adjusted earnings per share for the quarter were €0.09, down from €0.15 in 2022, reflecting the overall decline in profitability[69]. Expenses and Cost Management - Cost of sales rose by 24% to €118.1 million, up from €95.2 million in the same period last year, contributing to a gross profit of €184.9 million, a 21% increase[77]. - Selling and distribution expenses increased by 20% to €103.5 million, while general administrative expenses surged by 55% to €34.4 million[77]. - Selling and distribution expenses rose by €17.4 million, or 20%, to €103.5 million, primarily due to higher fulfillment costs associated with increased DTC penetration[84]. - General administration expenses increased by €12.3 million, or 55%, to €34.4 million, driven by one-time IPO costs and increased personnel expenses[86]. Cash Flow and Financing - Cash flows used in operating activities for Q4 2023 were €45.4 million, an improvement from €53.2 million in Q4 2022[99]. - Cash flows used in investing activities decreased to €8.6 million from €25.9 million year-over-year, due to reduced capital expenditures[101]. - Cash flows used in financing activities increased significantly to €119.8 million, driven by loan repayments of €522.5 million[101]. - Total cash and cash equivalents decreased by €173.8 million in Q4 2023 compared to a decrease of €128.3 million in Q4 2022[99]. - As of December 31, 2023, total loans and borrowings amounted to €1,316.2 million, down from €1,853.0 million as of September 30, 2023[102]. - The company made early repayments of €100.0 million on its Vendor Loan and $450.0 million on its USD TLB Facility during Q4 2023[101]. - Interest payable as of December 31, 2023, was €20.4 million, down from €30.0 million as of September 30, 2023[102]. Strategic Initiatives - The company completed its IPO in October 2023, raising $473.6 million, which was used to repay €100 million of a Vendor Loan and $450 million of borrowings under the USD TLB Facility[52]. - The company operates a multi-channel distribution strategy, optimizing growth and profitability through both DTC and B2B channels[50]. - The company maintains a selective wholesale strategy, creating scarcity in the market and obtaining favorable economic terms on wholesale distribution[52]. - The company anticipates continued growth driven by expanding its DTC and B2B channels, alongside ongoing product innovation and market expansion strategies[78]. - The company is focused on executing its direct-to-consumer growth strategy and expanding retail stores, while managing competition and consumer preferences[106]. Market Risks and Forward-Looking Statements - The company faces market risks including foreign currency risk, interest rate risk, and credit risk, which could impact financial performance[101]. - Forward-looking statements indicate potential risks including economic conditions, supply chain disruptions, and regulatory matters that could affect future performance[106].

Birkenstock on Thursday beat holiday quarter revenue expectations, reporting a 26% year-on-year jump, as the German sandal company benefited from higher pricing and rising U.S. demand.Here's how the shoemaker did in its first fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:Earnings per share: 4 euro cents vs. 9 euro cents expectedRevenue: 303 million euros vs. 288.7 million euros expected.The newly public shoemaker, which sta ...

Investors are always looking for stocks that are poised to beat at earnings season and Birkenstock Holding plc (BIRK) may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.That is because Birkenstock Holding is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is ...

A few hours before writing this, I got an email letting me know packages had arrived at my door. It’s a recurring theme at our house and probably yours too. Increasingly, Americans are throwing in the towel on brick-and-mortar retail and ordering everything online. And as investors, that makes it worth considering what companies might be hidden gem e-commerce stocks. The task is harder than you might think. Finding e-commerce companies isn’t hard. Nearly every company today is e-commerce. They have to be. B ...

Ethan SwopeAllbirds (BIRD) is out, Birkenstock (NYSE:BIRK) is in. Though investors have a bad taste in their mouths from the near-failure of the San Francisco-based wool shoemaker, Birkenstock is in another category entirely. German-made and a bastion of quality and endurance for over 200 years, Birkenstock went public at the tail end of last year at $46 per share. After initially falling to the low $40s, the stock is rallying again this year in sympathy with the broader markets - and in my view, it's w ...