Financial Data and Key Metrics Changes - The company reported first quarter revenue of €362 million, representing a 19% growth year-over-year, exceeding the annual guidance of 15% to 17% [28][12] - Gross margin for the quarter was 60.3%, slightly down 70 basis points year-over-year due to a higher B2B mix [30][28] - EBITDA for Q1 was €102 million, up 25% year-over-year, with an EBITDA margin of 28.2%, an increase of 130 basis points year-over-year [31][28] - Adjusted net profit was €33 million, up 99% year-over-year, with earnings per share at €0.18, also up 100% from a year ago [31][28] Business Line Data and Key Metrics Changes - B2B revenue grew by 30% in the first quarter, while DTC revenue increased by 10% [28][12] - DTC share of business was 49%, down 400 basis points from a year ago [29] - Revenue from closed-toe silhouettes grew at over twice the rate of the overall group, accounting for over half of the revenue in the quarter [13][14] Market Data and Key Metrics Changes - The Americas region saw a revenue increase of 16% compared to Q1 2024, with closed-toe products making up nearly two-thirds of the business [18][20] - EMEA delivered growth of 17%, with closed-toe products growing over 2.5 times faster than sandals [20][21] - The APAC region was the fastest-growing segment, with a growth rate of 47%, now representing 13% of total revenue, up from 10.5% a year ago [23][24] Company Strategy and Development Direction - The company aims to balance growth between DTC and B2B channels, with expectations for DTC to slightly outpace B2B in the second half of the year [16][34] - The focus is on expanding into white space opportunities, particularly in closed-toe shoes, owned retail, and the APAC region [39][13] - The company plans to open additional retail stores, aiming to increase the total from 71 to closer to 100 by the end of the fiscal year [132][131] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong consumer demand despite macroeconomic uncertainties, including inflation and potential tariffs [44][43] - The company reiterated its revenue growth forecast of 15% to 17% for the year, with expectations for improved gross profit margins as production efficiency increases [35][34] - Management highlighted the importance of maintaining a healthy stock-to-sales ratio and the strategy of engineered distribution to manage growth [89][90] Other Important Information - The company ended the quarter with cash and cash equivalents of €299 million, down from €356 million at the end of fiscal 2024 [32] - The inventory-to-sales ratio improved to 39%, down from 42% in Q1 2024 [32] Q&A Session Summary Question: Why isn't the company raising the full-year guidance despite a strong Q1? - Management noted that Q1 is the smallest quarter of the year, comprising only 17% of total annual revenue, and cited macroeconomic uncertainties as reasons for maintaining guidance [43][44] Question: What drove the strong B2B growth? - Management indicated that strong sell-through rates and increased shelf space allocation by wholesale partners contributed to the B2B growth [46][47] Question: What are the biggest challenges for the new CFO? - The new CFO highlighted the need to scale systems and infrastructure in line with rapid growth as a key challenge [55] Question: What is the outlook for gross margin in the coming quarters? - Management expects a modest improvement in gross margin in the second half of the year, driven by increased factory utilization [72][73] Question: How is the company addressing potential tariffs? - The company plans to monitor tariffs closely and has historically been able to offset inflationary pressures through pricing adjustments [140][141]
Birkenstock plc(BIRK) - 2025 Q1 - Earnings Call Transcript