Birkenstock (BIRK) Q4 2024 Earnings Transcript

Core Insights - The company reported strong fiscal 2024 results, achieving 22% revenue growth in constant currency, exceeding expectations and continuing a decade-long trend of over 20% compounded annual revenue growth [6][17][24] - The company has restructured its reporting segments, merging the Middle East and Africa with Europe to create a new segment called EMEA, while Asia Pacific and India are combined into APAC [4][5] - The company is focused on expanding into under-penetrated product categories and regions, particularly in the APMA region, which saw a 42% growth [6][14] Financial Performance - Fiscal year 2024 total revenue reached over EUR 1.8 billion, up 22% from 2023, with fourth quarter revenues of EUR 456 million, reflecting a 22% growth in constant currency [18][22] - Adjusted EBITDA for the full year was EUR 555 million, with a margin of 30.8%, slightly down from the previous year due to capacity expansion costs [22][24] - The gross profit margin for fiscal 2024 was 58.8%, down 330 basis points from 2023, attributed to production capacity under-absorption and changes in product mix [20][22] Segment Performance - In the Americas, revenue grew by 19%, driven by strong consumer demand and a return to in-person shopping [10][11] - Europe experienced exceptional growth of 21%, with closed-toe products growing at over 2.5 times the rate of sandals [12][13] - The APMA region was the fastest-growing segment, contributing to 12% of overall revenue, with significant opportunities for future growth [14][15] Strategic Initiatives - The company opened 20 new stores globally in fiscal 2024, increasing its total to 67, with plans to expand the store count by 50% in fiscal 2025 [10][46] - Investments in production capacity and new product innovations, such as orthopedic lines and outdoor assortments, are aimed at meeting growing global demand [8][24] - The company maintains a disciplined distribution strategy to ensure brand scarcity and high full-price realization, with over 90% of sales at full price [9][66] Outlook - For fiscal 2025, the company expects revenue growth of 15% to 17%, with balanced contributions from both DTC and B2B channels [24][25] - Gross margin is projected to improve as production efficiency increases, with an EBITDA margin target of 30.8% to 31.3% [25][24] - The company aims to continue expanding its presence in the APMA region while maintaining a balanced growth strategy across all segments [27][61]