Financial Data and Key Metrics Changes - Birkenstock reported a strong fiscal 2024 with a revenue growth of 22% in constant currency, achieving over EUR 1.8 billion in total revenue, surpassing the expected growth of 20% [12][32] - Adjusted EBITDA margin for fiscal 2024 was 30.8%, exceeding expectations, while adjusted net profit for the fourth quarter was EUR 55 million, up 180% year-over-year [13][39] - Gross profit margin for the fourth quarter was 59%, with a full-year gross profit margin of 58.8%, down 330 basis points from the previous year [36][38] Business Line Data and Key Metrics Changes - Revenue from closed-toe silhouettes grew at over twice the rate of the overall group, accounting for about one-third of the business [13][14] - The APMA business segment grew by 42%, nearly doubling the pace of the overall business, while own retail revenue grew over two times the overall business growth [14][27] - The wholesale business increased by 23% in fiscal 2024, with over 90% of growth coming from existing doors [16][17] Market Data and Key Metrics Changes - Revenue in the Americas increased by 19% compared to fiscal 2023, with a notable return to in-person shopping [20][21] - Europe experienced exceptional growth of 21%, driven by improved distribution quality and increased brand awareness [22][24] - The APMA region, while still only 12% of overall revenue, is seen as a significant growth opportunity, with 13 new retail stores added [27][28] Company Strategy and Development Direction - The company aims to balance growth between B2B and DTC channels, with a focus on expanding into under-penetrated product categories and regions [12][18] - Birkenstock plans to open 50% more stores in fiscal 2025, with a disciplined approach to location selection [86] - The company is committed to maintaining brand health and full-price realization while tapping into white space markets, particularly in the APMA region [47][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue growth of 15% to 17% in fiscal 2025, supported by strong holiday season performance [51][52] - The company anticipates improvements in gross margin as production efficiency increases, targeting a gross margin closer to 60% [43][44] - Management highlighted the importance of disciplined distribution and brand strength, which has allowed them to maintain high full-price realization rates [46][125] Other Important Information - The company will change its segment reporting structure starting in fiscal 2025, merging the Middle East and Africa with Europe to create a new EMEA segment [8][9] - Birkenstock's cash and cash equivalents were EUR 356 million as of September 30, 2024, with a net leverage ratio of 1.8x, below the target of 2.0x [40][42] Q&A Session Summary Question: What is the rationale behind the 15% to 17% growth guidance? - Management believes this pace is appropriate for long-term health, with strong demand expected to continue [51][52] Question: How are DTC and B2B performing in Q1? - DTC is expected to grow, particularly with new store openings, while B2B remains strong with existing partners [55][56] Question: What is the outlook for gross margin in 2025? - Management expects a modest improvement in gross margin, with a clearer trend emerging in the latter half of the year [63][70] Question: How is the closed-toe category performing? - Closed-toe offerings are growing significantly, with expectations for increased share in the future [91][96] Question: What are the growth plans for the APMA region? - The company plans to grow the APMA region at double the speed of mature markets, with a focus on balanced growth across all areas [113][114]
Birkenstock plc(BIRK) - 2024 Q4 - Earnings Call Transcript