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01/11 08:00
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Revenue €574 million, up 19% year-over-year; driven by double-digit volume increase and continued ASP growth.
Gross Margin 57.7%, up 140 basis points year-over-year; improved absorption of costs from a new manufacturing facility contributed about 50 basis points.
Selling and Distribution Expenditures €127 million, 22% of revenue, down 150 basis points year-over-year; mainly due to reclassification of expenses into G&A.
General Administration Expenses €32 million, 5.6% of revenue, up 150 basis points year-over-year; increase due to reclassification and higher IT expenses.
Adjusted EBITDA €200 million, up 23% year-over-year; margin of 34.8%, up 110 basis points year-over-year, primarily due to improved gross profit margin.
Adjusted Net Profit €103 million, up 33% year-over-year; adjusted EPS was €0.55, up from €0.41 a year ago.
Cash Flows Used in Operating Activities €18 million, down from €68 million year-over-year; decrease due to timing of tax payments.
Cash and Cash Equivalents €235 million at the end of the quarter.
Inventory to Sales Ratio 36%, down from 40% in Q2 2024.
Days Sales Outstanding (DSO) 46, in line with 44 a year ago.
Capital Expenditures Approximately €21 million; on track to meet CapEx targets of around €80 million for the year.
Net Leverage 1.8x as of March 31, 2025, down from 1.9x at the end of Q1.
Closed-toe Silhouettes Growth: Revenue from closed-toe silhouettes grew at twice the rate of the overall group and increased share of business by 400 basis points.
New Store Openings: We opened three new owned retail stores in India, Japan, and China, bringing the total number of stores in the APAC region to 30.
Membership Growth: Our membership base reached over 10 million loyal members, up over 25% year-over-year.
Revenue Growth in APAC: The APAC region was the fastest-growing segment in the quarter, growing by 30%.
Revenue Growth in Americas: Revenue in the Americas was up 23% in reported currency and 20% in constant currency.
Revenue Growth in EMEA: EMEA delivered double-digit growth of 12%.
Production Capacity Increase: The manufacturing capacity added over the past two years has allowed us to increase production to meet demand.
Inventory Management: We improved our inventory to sales ratio to 36%, down from 40% in Q2 2024.
Retail Expansion Strategy: We are on track to reach 100 owned stores by the end of this fiscal year, having added six new doors during the second quarter.
Pricing Strategy: For a full offset of tariff impact, we would need only a low single-digit price increase globally.
Economic Factors: The company acknowledges the unpredictable global context as a stress test for business resilience, indicating potential economic volatility.
Tariff Risks: Birkenstock is less exposed to tariffs due to 100% of production and 96% of materials sourced from Europe. However, they anticipate potential impacts from tariffs and have taken actions to mitigate these effects.
Foreign Exchange Risks: Recent depreciation of the dollar is expected to create headwinds for reported growth and margins in the latter half of the fiscal year.
Supply Chain Challenges: Despite controlling 95% of production in Germany and 100% in Europe, the company remains vigilant about supply chain disruptions that could affect operations.
Competitive Pressures: The company expects a shift in consumer behavior due to tariffs, which may favor brands like Birkenstock that maintain strong brand equity and pricing integrity.
Revenue Growth: In Q2 2025, Birkenstock reported a record €574 million in revenues, up 19% year-over-year, exceeding the annual guidance of 15% to 17%.
Retail Expansion: The company is on track to reach 100 owned stores by the end of the fiscal year, having opened six new stores in Q2.
Closed-Toe Silhouettes: Revenue from closed-toe silhouettes grew at twice the rate of the overall group, indicating strong demand and market share growth.
DTC Growth: DTC channel growth was driven by investments in online and owned retail stores, with a membership base reaching over 10 million.
APAC Growth: The APAC region grew by 30%, with significant contributions from new retail stores and strategic partnerships.
Revenue Guidance: Birkenstock expects to be at the high end of its constant currency revenue growth guidance of 15% to 17% for fiscal 2025.
Adjusted EBITDA Margin: The company now expects an adjusted EBITDA margin of 31.3% to 31.8%, 50 basis points above previous guidance.
Adjusted EBITDA Target: The adjusted EBITDA target is set in the range of €660 million to €670 million, reflecting a year-over-year increase of 19% to 21%.
CapEx Guidance: Birkenstock is on track to meet its CapEx targets of around €80 million for the year.
Net Leverage: As of March 31, 2025, net leverage was 1.8x, down from 1.9x at the end of Q1.
Shareholder Return Plan: Birkenstock is focused on driving steady long-term growth and shareholder returns through its engineered distribution strategy, strong brand equity, and pricing power.
Adjusted EBITDA Target: The company expects an adjusted EBITDA target in the range of €660 million to €670 million, up 19% to 21% year-over-year.
Capital Expenditures: Birkenstock is on track to meet its CapEx targets of around €80 million for the year, which includes investments in production capacity and retail.
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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