Birkenstock's Q4 2024 Earnings: A Closer Look at Revenue Growth and Adjusted EBITDA Margin

Birkenstock Holding plc (NYSE: BIRK) recently announced its Q4 2024 earnings, showcasing impressive revenue growth and an improved adjusted EBITDA margin. The company's strong performance was driven by robust demand across all segments, channels, and categories, with the Americas, Europe, and APMA regions all contributing to this growth. This article delves into the key drivers behind Birkenstock's revenue growth and the role of cost-cutting measures and operational efficiencies in its adjusted EBITDA margin growth.

Birkenstock's revenue growth across segments and channels significantly outpaced industry peers. The company reported fiscal 2024 revenue growth of 21% on a reported and 22% on a constant currency basis, ahead of its guidance of 20%. In comparison, the global footwear market is projected to grow at a CAGR of 4.5% from 2021 to 2028 (Fortune Business Insights). Birkenstock's growth rate demonstrates its competitive advantage in the market.

The Americas, Europe, and APMA regions all contributed to Birkenstock's impressive revenue growth. Constant currency revenue increases of 21%, 19%, and 38% respectively, indicate strong consumer demand and wholesale support across these regions. Additionally, the company's DTC and B2B revenue growth played a significant role, with constant currency increases of 18% and 26% respectively. Closed-toe products also saw revenue growth over twice the group average, with the share of business increasing to approximately one-third.



Birkenstock's expansion into new product categories and markets has significantly contributed to its adjusted EBITDA margin. The company reported an adjusted EBITDA margin of 30.8% in Q4 2024, exceeding its targeted range of 30-30.5%. This strong performance can be attributed to the company's successful entry into the white-space opportunities it identified during its IPO, including the expansion of its footwear offerings and the introduction of new product categories such as sleep systems and natural cosmetics.

Cost-cutting measures and operational efficiencies have also played a crucial role in Birkenstock's adjusted EBITDA margin growth. The company reported an adjusted EBITDA margin of 27.4% in Q4 2024, up 190 basis points from 25.5% a year ago. This improvement can be attributed to several factors, including the under-absorption impact from added production capacity, the increase in B2B share relative to a year ago, and currency translation impacts, partially offset by pricing. Despite these challenges, Birkenstock's focus on operational efficiency and cost-cutting has enabled it to maintain a strong adjusted EBITDA margin, demonstrating the company's ability to adapt to changing market conditions and maintain profitability.

In conclusion, Birkenstock's Q4 2024 earnings call highlighted the company's impressive revenue growth and improved adjusted EBITDA margin. The company's success can be attributed to its strong demand across all segments, channels, and categories, as well as its expansion into new product categories and markets. Cost-cutting measures and operational efficiencies have also played a crucial role in driving the company's adjusted EBITDA margin growth. As Birkenstock continues to execute its strategic initiatives, investors can expect the company to maintain its competitive edge in the global footwear market.