Business
Birkenstock clog sales drive fourth-quarter results beat
Global Banking & Finance Review®
Company
By Juveria Tabassum
(Reuters) -Birkenstock beat market expectations for fourth-quarter results on Wednesday, helped by robust full-price sales of the German footwear maker’s pricey sandals in the U.S. and Asia.
With fresh styles becoming a priority for consumers, particularly in its largest market in the Americas, Birkenstock’s sandals and closed-toe clogs alike have drawn new customers.
The company’s average selling prices across its product range were up 8% in fiscal 2024, in part due to higher sales of clogs, Birkenstock said, adding that closed-toe styles now made up about a third of its business.
Birkenstock reported fourth-quarter revenue of 455.8 million euros ($478.27 million), compared with the average analyst estimate of 439.2 million euros, according to data compiled by LSEG.
“The expansion of ranges into more closed-toe silhouette has helped boost revenue, given that they offer multi-season wear,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.
Birkenstock’s shares were volatile in premarket trading, and were last down marginally. The company forecast fiscal 2025 revenue growth below market expectations.
Shoppers have approached non-essential purchases with caution despite cooling inflation, carefully comparing prices, a trend also at play during the ongoing holiday season.
This has resulted in some softness in expectations from retailers in the U.S. for 2025.
Birkenstock invested in expanding its store presence in markets such as Japan and China, as well as increasing its manufacturing capacity this year to meet global demand.
While this has contributed to a 330-basis point drop in gross margins in fiscal 2024, Birkenstock signaled a recovery in margins in fiscal 2025 as output increases from its new production facilities.
The company forecast fiscal 2025 revenue to increase between 15% and 17%, compared with estimates of 17.5% growth.
On an adjusted basis, Birkenstock earned 0.29 euro per share beating estimates of 0.26 euro.
($1 = 0.9530 euros)
(Reporting by Juveria Tabassum in Bengaluru and Helen Reid in London; Editing by Shounak Dasgupta)
Revenue is the total amount of money generated from sales of goods or services before any expenses are deducted. It is a key indicator of a company's financial performance.
Average selling prices refer to the average amount at which a company's products are sold. It is calculated by dividing total sales revenue by the number of units sold.
Market capitalisation is the total market value of a company's outstanding shares of stock. It is calculated by multiplying the stock price by the total number of shares.
Revenue growth is the increase in a company's sales over a specific period, often expressed as a percentage. It indicates how well a company is expanding its business.
Investment in market expansion involves allocating resources to increase a company's presence in new or existing markets, aiming for growth in sales and market share.
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