Birkenstock's Strong Q1 2025: A Tale of Strategic Growth and Operational Efficiency

Birkenstock Holding plc (NYSE: BIRK) has started the year on a high note, reporting a robust 19% increase in revenue for the first quarter of 2025, driven by strong holiday demand and strategic initiatives. The company's earnings call on February 20, 2025, highlighted its impressive performance across various segments and channels, as well as its commitment to growth and operational efficiency.

Birkenstock's strategic focus on direct-to-consumer (DTC) growth and expansion into new markets, particularly the Asia-Pacific (APAC) region, has significantly contributed to its strong Q1 2025 performance. The company's DTC revenue grew by 11% on a reported basis and 10% in constant currency, despite an exceptionally strong 30% growth rate in the first fiscal quarter of 2024. This growth was supported by the opening of four new owned stores during the first fiscal quarter of 2025, bringing the total number of owned retail stores to 71. Additionally, the APAC segment achieved revenue growth of 47% on a reported and constant currency basis, reflecting Birkenstock's continued investment in this region and the growing demand for its products.



The increased demand for closed-toe footwear has also played a significant role in Birkenstock's success. Close-toe silhouettes grew at more than twice the pace of the group average, leading to a 600 basis point increase in share of business. This trend is evident across all regions, with strong growth in the Americas, EMEA, and APAC segments. In the Americas, closed-toe footwear, driven by the clog category, accounted for nearly two-thirds of the region's revenue in the quarter. In EMEA, closed-toe penetration increased by 400 basis points year-over-year to reach over 50% share of business.

Birkenstock's ability to manage inventory and control costs has been a critical factor in its financial success. The company's Adjusted EBITDA margin improved by 130 basis points to 28.2% in the first quarter of 2025, demonstrating strong operating leverage and cost control. This improvement, along with the EUR 34 million improvement in operating cash flow, suggests that Birkenstock has effectively managed its expenses and optimized its cost structure, allowing it to maintain profitability despite the increased B2B share.



In conclusion, Birkenstock's strong Q1 2025 performance is a testament to the company's strategic focus on DTC growth, expansion into new markets, and its ability to adapt to changing consumer preferences. The increased demand for closed-toe footwear, coupled with effective inventory management and cost control, has contributed to the company's financial success. As Birkenstock continues to invest in its production capacity and expand its product offerings, it is well-positioned to maintain its momentum and deliver on its guidance for the 2025 fiscal year.