Birkenstock (BIRK) Q3 2024 Earnings Transcript

Core Insights - The company achieved the highest quarterly revenue in its history, with a 19% revenue growth in constant currency, driven by strong demand across all segments and channels [5][20][27] - The B2B business grew by 23%, while the D2C business saw a 14% increase, indicating a robust performance compared to peers [6][21] - The company maintains a disciplined distribution model to keep supply under demand, ensuring healthy margins and reducing risk [7][8][27] Financial Performance - Third quarter fiscal 2024 revenue was EUR 565 million, reflecting a 19% growth year-over-year on a constant currency basis [20] - Adjusted EBITDA for the quarter reached EUR 186 million, marking a 15% increase from the previous year, with an adjusted EBITDA margin of 33% [22][23] - Gross profit margin was 59.5%, down 220 basis points year-over-year, primarily due to a shift in sales mix from DTC to B2B [21] Market Trends - There is a noticeable shift towards in-person shopping, benefiting the B2B business, which accounted for over 90% of growth from existing retail partners [6][11] - Closed-toe silhouettes, including clogs, have seen significant sales growth, with revenue share increasing by 400 basis points year-over-year [9] - The company continues to expand its retail footprint, adding seven new stores in the third quarter, bringing the total to 64 [8][12] Regional Performance - In the Americas, revenue grew by 15%, with B2B channels particularly strong, especially in department stores [10][14] - Europe also saw a 19% growth, with strong performance in countries where the company replaced distributors with its own distribution [13][15] - The APMA region experienced a remarkable 41% revenue growth, driven by both DTC and B2B channels [16][18] Consumer Engagement - The membership program grew by 36% year-over-year, with members spending over 25% more per transaction than non-members [8] - The company is focusing on educating consumers about the Birkenstock footbed, enhancing brand awareness and market share [28] - Full price realization remained strong at 95%, indicating effective pricing strategies and consumer demand [10][34]