Birkenstock Exceeds Revenue Expectations Due to Price Hikes and Rise in US Demand

On Thursday, Birkenstock beat holiday quarter revenue expectations, with a 22% year-over-year spike, as the company benefited from its marked-up pricing and increase in U.S. demand, according to CNBC.

The newly listed German sandal company is still adapting to the flow of public reporting. It recently disclosed its fiscal 2023 results and 2024 guidance just over a month ago. Reaffirming its commitment, the company announced on Thursday that it maintains its previously issued guidance, anticipating sales between 1.74 billion euros ($1.89 billion) and 1.76 billion euros ($1.91 billion), reflecting an approximate 18% growth.

Contrary to what Wall Street had predicted for the shoemaker in the fiscal first quarter, it did better. According to a survey of analysts by LSEG, which was previously known as Refinitiv, the expected revenue for Birkenstock was 288.7 million euros, but the company achieved 302.9 million euros ($328.5 million), up 22% from 248.5 million euros ($269.4 million) the year before.

It also reported a net loss of 7.15 million euros ($7.75 million) for the last three months of 2023, which is a loss of 4 euro cents per share.

Oliver Reichert, CEO of Birkenstock, has said the company “deliberately engineers its distribution strategy so demand is higher than supply but it’s working to double its production capabilities over the next three years to narrow that gap.”

The chief executive said those investments, as well as other initiatives the company is putting in place to drive growth, are having a “planned” but “temporary” impact on the company’s profits.

Reichert said in a press release, “Our results for the first quarter of 2024 once again demonstrate the resilience of our business model and the strong sustained demand for our products. Given our engineered distribution model, demand continues to outpace supply in all regions, channels and categories.” He added, “In the medium-term, we are confident we will continue to deliver our objectives of a gross profit margin over 60% and an adjusted EBITDA margin in the low thirties percent.”

In October, the shoemaker started trading on the New York Stock Exchange under the name “BIRK,” with a quiet start when it first made its appearance on the public markets, with shares dropping by over 12% on its first day as a public company. Shares have since bounced back and are up more than 5% this year, according to the Wednesday close.