Birkenstock's Fiscal Q4: A Strong Finish to a Record Year

Birkenstock Holding PLC (BIRK) has reported a robust fiscal fourth quarter, capping off a year of impressive growth and profitability. The sandal maker's strong performance was driven by double-digit revenue growth across all segments, a strategic shift in channel mix, and a focus on direct-to-consumer (DTC) and business-to-business (B2B) expansion.

Birkenstock's fiscal Q4 earnings snapshot reveals a 22% increase in revenue on a constant currency basis, ahead of projected constant currency growth of 20%. This growth was fueled by strong double-digit revenue growth across all segments, including 19% in the Americas, 21% in Europe, and 42% in APMA on a constant currency basis. The Americas and Europe contributed significantly to this growth, while APMA's impressive 42% growth highlights the potential for further expansion in the Asia-Pacific region.

The company's focus on DTC and B2B expansion has also paid off, with DTC revenue growing by 21% and B2B revenue by 23% on a constant currency basis. This growth has contributed to the company's overall revenue increase and an adjusted EBITDA margin of 30.8%, above the targeted range of 30-30.5%. Birkenstock's strategic focus on these channels has enabled it to expand profitably into new markets and attract new customers.

Birkenstock's shift in channel mix, particularly the increase in closed-toe products, has significantly contributed to its revenue growth and profitability. In fiscal 2024, closed-toe revenue grew over twice the group average, with its share of business reaching approximately one-third. This strategic move has not only expanded Birkenstock's product offerings but also attracted new customers, driving double-digit revenue growth across all segments.

Despite a temporary impact on gross profit margin due to production capacity expansion and channel mix shift, Birkenstock's adjusted EBITDA margin for fiscal 2024 reached 30.8%, exceeding its targeted range of 30-30.5%. This demonstrates that the shift in channel mix has been a profitable strategy for Birkenstock, enhancing its revenue growth and profitability.

Looking ahead, Birkenstock has set a revenue growth target of 15-17% in constant currency for the fiscal year ending September 30, 2025. The company also aims to improve its gross profit margin as new production facilities reach full utilization, moving closer to its long-term target of 60%. With a strong finish to fiscal 2024 and a clear roadmap for future growth, Birkenstock is well-positioned to continue its impressive run as a public company.

In conclusion, Birkenstock's fiscal Q4 earnings snapshot highlights the company's strong performance across all segments, driven by a strategic focus on DTC and B2B expansion, a shift in channel mix, and a commitment to profitable growth. As the company looks to the future, investors can expect Birkenstock to continue capitalizing on its global appeal and innovative product offerings to drive further success.