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01/11 08:03
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Birkenstock's earnings call highlights strong financial performance with 22% revenue growth and improved EBITDA, despite some margin decline due to expansion. The company maintains optimistic guidance and strategic growth plans, including market penetration in APMA and expansion in the closed-toe category. The Q&A section supports positive sentiment with balanced growth expectations and strong momentum in specific segments. The focus on debt reduction and shareholder value further enhances the outlook. Despite competitive pressures and regulatory challenges, the overall sentiment is positive, likely leading to a stock price increase of 2% to 8%.
Fourth Quarter Revenue EUR 456 million, growth of 22% in constant currency, accelerating from third quarter's growth of 90%.
Fiscal Year Revenue Over EUR 1.8 billion, up 22% from 2023, ahead of expected growth of 20%.
B2B Revenue Growth (Fiscal Year) Up 23%.
DTC Revenue Growth (Fiscal Year) Up 21%.
Fourth Quarter Gross Profit Margin 59%, with a decline of 190 basis points year-over-year due to expected under-absorption impact from new production capacity, increase in B2B share, and FX impact.
Fiscal Year Gross Profit Margin 58.8%, down 330 basis points from 2023, with 150 basis points decline due to temporary under-absorption costs from added production capacity.
Fourth Quarter Adjusted EBITDA EUR 125 million, up 31% year-over-year, with a margin of 27.4%, up 190 basis points year-over-year.
Fiscal Year Adjusted EBITDA EUR 555 million, up 15% from 2023, with an EBITDA margin of 30.8%, down 160 basis points year-over-year.
Fourth Quarter Adjusted Net Profit EUR 55 million, up 180% year-over-year, with adjusted EPS of EUR 0.29, up 107%.
Fiscal Year Adjusted Net Profit EUR 240 million, up 16% from 2023, with EPS of EUR 1.28, increased 30% year-over-year.
Cash and Cash Equivalents (End of Fiscal Year) EUR 356 million, up from EUR 344 million at the end of fiscal 2023.
Operating Cash Flow (Fiscal Year) EUR 429 million, up 20% year-over-year.
Inventory to Sales Ratio (Fiscal Year) 35%, down from 40% in 2023.
Capital Expenditures (Fiscal Year) EUR 74 million.
Net Leverage (End of Fiscal Year) 1.8x, below the stated target of 2.0x.
New Product Launches: Launched new orthopedic innovations including the blue footbed for sneakers and relaunch of the fully certified Birki Air 2.0.
Closed-Toe Silhouettes Growth: Revenue from closed-toe silhouettes grew at over twice the rate of the overall group, now accounting for about 1/3 of the business.
Water-Ready Outdoor Assortment: Expanded the water-ready outdoor assortment, targeting tropical conditions.
Market Expansion in APMA: APMA business grew at 42%, nearly double the pace of the overall business, with 13 new retail stores added.
Retail Expansion in Europe: Opened 3 new stores in Europe, including the first store in Paris, with plans for more in 2025.
DTC Growth: DTC business grew 21%, with a penetration of approximately 40%.
Production Capacity Increase: Invested in new Pasewalk factory and expanded production capacity in Görlitz and Arouca to meet growing demand.
Operational Efficiency: Increased pairs sold by 14% while maintaining disciplined distribution to ensure strong full price realization.
Segment Reporting Change: Changed segment reporting structure to merge Middle East and Africa with Europe, creating EMEA segment.
Focus on Brand Awareness: Increased brand awareness by an average of 400 basis points in key markets since transformation began in 2022.
Competitive Pressures: The company is experiencing strong demand for its products, but there is a need to manage distribution carefully to maintain brand health and full price realization. The competitive landscape is characterized by a bifurcation where many products are heavily promoted, but Birkenstock's products are selling through at full price.
Regulatory Issues: No specific regulatory issues were mentioned, but the company acknowledges the potential impact of political situations on growth strategies, particularly in the APMA region.
Supply Chain Challenges: The company is expanding production capacity to meet growing demand, which has led to temporary under-absorption costs impacting gross margins. The transition to new production facilities is expected to improve efficiency and utilization in the future.
Economic Factors: The company is observing a selective consumer spending environment, which necessitates a disciplined approach to distribution and pricing strategies to maintain profitability.
Market Expansion Risks: The company is expanding into under-penetrated markets, particularly in the APMA region, which presents both opportunities and risks associated with brand awareness and market acceptance.
Financial Performance Risks: The company has set a revenue growth target of 15% to 17% for fiscal 2025, which is lower than the previous decade's growth rates. This reflects a more cautious approach to growth amid changing market dynamics.
Revenue Growth: Fiscal 2024 revenue growth was 22% in constant currency, extending a decade-long track record of over 20% compounded annual revenue growth.
Adjusted EBITDA Margin: The adjusted EBITDA margin for fiscal 2024 was 30.8%, exceeding expectations.
Store Expansion: Opened 20 new stores globally in fiscal 2024, with plans to increase the store fleet by 50% in fiscal 2025.
Product Category Growth: Closed-toe silhouettes grew at over twice the rate of the overall group, now representing about one-third of the business.
APMA Region Growth: The APMA region grew by 42%, nearly doubling the pace of the overall business.
Membership Growth: Membership base grew by over 30% to over 8 million loyal members.
Revenue Guidance: Expecting revenue growth of 15% to 17% for fiscal 2025.
EBITDA Margin Guidance: Projected EBITDA margin for fiscal 2025 is between 30.8% and 31.3%.
Capital Expenditures: Planned capital expenditures of approximately EUR 80 million in fiscal 2025.
Debt Reduction: Target leverage ratio for the end of fiscal 2025 is approximately 1.5x.
Gross Margin Improvement: Expecting gross margin to improve year-over-year as production efficiency increases.
Shareholder Return Plan: Birkenstock plans to use excess cash to continue reducing outstanding debt, with a target leverage ratio of approximately 1.5x by the end of fiscal 2025. The company generated EUR 429 million in operating cash flow during 2024, indicating strong cash generation capabilities. Additionally, they plan to invest approximately EUR 80 million in capital expenditures in 2025, primarily related to production capacity and retail store expansion.
The earnings call reveals strong financial performance with high revenue growth expectations and robust demand across regions. Positive indicators include a strong APAC growth forecast, strategic store expansion, and B2B outpacing DTC growth. Despite some FX and tariff challenges, the company is mitigating these through strategic pricing and production efficiencies. The Q&A session supports these positives, highlighting strong consumer demand and confidence in sustaining growth. Although there are some uncertainties in production capacity, the overall sentiment remains positive, suggesting a likely 2% to 8% stock price increase.
Birkenstock's earnings call reveals strong financial performance with record revenue growth, optimistic guidance, and successful product expansion. Although there are capacity constraints and tariff impacts, the company is mitigating these through strategic investments and strong inventory management. The positive market response to price adjustments and expansion plans further supports a positive sentiment. Despite some management evasiveness on specifics, the overall outlook, including strong DTC and B2B growth, suggests a positive stock price movement in the near term.
The earnings call presented strong financial performance with a 23% increase in adjusted EBITDA and a 33% rise in net profit. Despite macroeconomic uncertainties, management expressed confidence in offsetting tariff impacts and maintaining strong demand. The Q&A highlighted positive trends in consumer demand and store expansion. The company is on track to meet CapEx targets and reduce debt. While there was some ambiguity in responses about demand management, overall financial health and strategic plans suggest a positive outlook for stock price movement.
Birkenstock's earnings call highlights strong financial performance with 22% revenue growth and improved EBITDA, despite some margin decline due to expansion. The company maintains optimistic guidance and strategic growth plans, including market penetration in APMA and expansion in the closed-toe category. The Q&A section supports positive sentiment with balanced growth expectations and strong momentum in specific segments. The focus on debt reduction and shareholder value further enhances the outlook. Despite competitive pressures and regulatory challenges, the overall sentiment is positive, likely leading to a stock price increase of 2% to 8%.
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