BalkansCat We wrote an article shortly after Birkenstock Holding plc (NYSE:BIRK) went public where we shared our skepticism about the company's valuation. There is no doubt that they own a valuable brand for which many consumers are willing to pay a premium, but that was already reflected in the share price and then some. Whiles shares are trading at a slightly higher price today, they have significantly underperformed the S&P 500 Index (SPY) on a total retum basis. The company also just disappointed invest ...

Core Viewpoint - Birkenstock shares fell over 15% after the company reported quarterly profits that missed expectations due to a global expansion plan impacting margins [1][2]. Financial Performance - The company reported an adjusted profit per share of 54 cents, below the expected 58 cents [1]. - Revenue was $624.6 million, a 19% increase year-over-year, but slightly below estimates of $625.6 million [2]. - Gross profit margin decreased by 220 basis points to 59.5% in the third quarter due to production expansion efforts [4]. Strategic Initiatives - Birkenstock is focusing on rapid international expansion, opening stores in markets like India and Japan to enhance sales [3][5]. - The company is investing in new manufacturing channels and updating existing facilities, including a new plant in Pasewalk, Germany [3][4]. - CEO Oliver Reichert noted a shift towards in-store purchases, prompting the company to expand its retail presence [2]. Market Position - Despite the earnings miss, Birkenstock continues to gain market share at major retailers such as Nordstrom and Foot Locker, driven by strong demand for its products [5]. - The company maintained its annual sales and profit forecasts, indicating confidence in its growth strategy [5].

Even after 250 years in business, this company is still setting records. Shares of shoe company Birkenstock (BIRK -16.84%) got knocked down on Thursday after the company reported financial results for its fiscal third quarter of 2024. Most headlines say that the company missed estimates from analysts, but I think this is a weak explanation for what's happening today, as I'll explain. Regardless of the reason why, Birkenstock stock was still down a hefty 16% as of 1 p.m. ET. Birkenstock is right on schedule ...

Financial Data and Key Metrics Changes - Birkenstock achieved a record quarterly revenue of EUR 565 million, reflecting a 19% growth year-over-year on a constant currency basis [18][19] - Gross profit margin for Q3 was 59.5%, down 220 basis points compared to the previous year, primarily due to a shift in mix from D2C to B2B [19] - Adjusted EBITDA for the quarter was EUR 186 million, marking a 15% increase year-over-year, with an adjusted EBITDA margin of 33% [20][21] Business Line Data and Key Metrics Changes - B2B business grew by 23% in constant currency, while D2C business saw a growth of 14% [18][19] - Revenue from closed-toe silhouettes grew more than double the rate of the overall brand, with revenue share increasing by 400 basis points year-over-year [10] - The membership program grew by 36% year-over-year, reaching 6.9 million members, who spend over 25% more per transaction than non-members [9] Market Data and Key Metrics Changes - Revenue in the Americas increased by 15%, with B2B channel growth particularly strong, especially in department stores [11][12] - Europe experienced a 19% growth, with strong performance in countries where Birkenstock replaced distributors with its own distribution [14] - The APMA region was the fastest-growing segment, with a revenue increase of 41%, driven largely by DTC channel growth [16] Company Strategy and Development Direction - The company is focused on expanding into identified white space opportunities, including closed-toe silhouettes and owned retail [6][9] - Birkenstock aims to maintain a disciplined approach to distribution, ensuring supply remains comfortably under demand [9] - The company is committed to achieving a net leverage ratio of 2x by the end of the year and plans to use free cash flow to reduce debt [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's strength and consumer demand, noting that there has been no observed softness in consumer spending [27] - The company confirmed its fiscal year 2024 guidance for total revenue growth of 20% and an adjusted EBITDA margin of 30% to 30.5% [25] - Management highlighted the importance of in-person shopping for the brand, as consumers prefer to see and touch the product [27] Other Important Information - The company opened seven new stores in Q3, bringing the total to 64 owned retail stores worldwide [9] - Cash and cash equivalents increased to EUR 404 million, with total cash flow for the quarter reaching EUR 229 million, up 93% year-over-year [21][22] - Capital expenditures totaled EUR 15 million in Q3, with expectations to remain below EUR 100 million for the fiscal year [22] Q&A Session Summary Question: Insights on unit sales and ASP performance - Management confirmed strong unit sales and an increase in like-for-like ASP, attributing revenue growth to a higher B2B mix [26][27] Question: Future cash use and leverage reduction - Management indicated plans to continue reducing leverage and investing in business expansion while maintaining a strong cash position [31][32] Question: Trends in US consumer demand - Management noted increasing consumer demand for the brand, emphasizing intentional purchasing behavior despite macroeconomic challenges [33] Question: Sell-through performance in B2B business - Management highlighted strong sell-through rates across regions, with traffic to the DTC website remaining robust [34][35] Question: Factory capacity and production constraints - Management confirmed ongoing capacity expansion, with no current constraints on meeting demand [37][38] Question: Current demand trends globally - Management expressed confidence in strong global demand, with positive signals from wholesale partners across categories [40][41] Question: Pricing actions for 2025 products - Management reported encouraging sell-throughs for new product introductions and noted that price increases have not negatively impacted consumer demand [48][51]

About this content About Jamie Ashcroft Jamie Ashcroft, the News Editor for Proactive UK, has developed an impressive career in financial journalism, focusing on the small-cap sector for over fourteen years. Before joining the Proactive team, he was a stockbroker during the global financial crisis, a role that complemented his educational background - a firstclass degree in Business and Economics and qualifications in software design and development. As one of the early external hires at Proactive in 2009, ...

EX-10.1 2 birk_ex101.htm TERM AND REVOLVING FACILITIES AGREEMENT EXHIBIT 10.1 EXECUTION VERSION Dated 28 May 2024 TERM AND REVOLVING FACILITIES AGREEMENT BIRKENSTOCK LIMITED PARTNER S.À R.L. (as the Company) provided by COMMERZBANK AKTIENGESELLSCHAFT BNP PARIBAS S.A. NIEDERLASSUNG DEUTSCHLAND ING BANK, A BRANCH OF ING-DIBA AG LANDESBANK HESSEN-THÜRINGEN GIROZENTRALE LANDESBANK BADEN-WÜRTTEMBERG, NEW YORK BRANCH LANDESBANK BADEN-WÜRTTEMBERG JPMORGAN CHASE BANK, N.A., LONDON BRANCH DZ BANK AG DEUTSCHE ZENTRAL ...

For those looking to find strong Consumer Discretionary stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Birkenstock (BIRK) been one of those stocks this year? By taking a look at the stock's year-to-date performance in comparison to its Consumer Discretionary peers, we might be able to answer that question. Birkenstock is one of 281 individual stocks in the Consumer Discretionary sector. Collectively, these companies sit at #10 in the Zacks Sector Rank. The ...

To access the entirety of the free report, click here. Another stock that caught our eye is Texas Instruments Incorporated (NASDAQ:TXN), whom in the first quarter of 2024, broke and closed above their 2022-2023 highs, an area which marked resistance around $185-188 and corresponded with the +10 percent year-todate level. In May, a brief close above the round-number $200 mark, which corresponds to the stock's 2021 high, led to a consolidation. This has continued, as the 10-week and 50-day moving averages pla ...

According to our latest data, BIRK has moved about 15.5% on a year-to-date basis. Meanwhile, the Consumer Discretionary sector has returned an average of -2.7% on a year-to-date basis. This means that Birkenstock is outperforming the sector as a whole this year. For those looking to find strong Consumer Discretionary stocks, it is prudent to search for companies in the group that are outperforming their peers. Birkenstock (BIRK) is a stock that can certainly grab the attention of many investors, but do its ...

Though Birkenstock stock is fresh off its worst weekly loss since going public in October 2023, it's still up 11.7% over the last six months. The equity hit an all-time high of $61.83 on June 20, and the $54 level has acted as a floor for the subsequent pullback. In the short-term, BIRK boasts a 15.2% quarter-to-date lead. Shares of footwear retailer Birkenstock Holding PLC (NYSE:BIRK) are 3.9% higher at $56.51 at last glance, following a pair of bull notes. UBS upgraded BIRK to "buy" from "neutral," with a ...