In the fourth quarter of fiscal 2024, Birkenstock Holding plc (NYSE: BIRK) reported a significant increase in revenue, reaching EUR 456 million. This marks a 22% rise on a reported and constant currency basis compared to last year. The growth was driven by strong performance across all segments, with the Americas showing a 21% increase, Europe 19%, and APMA (Asia Pacific, Middle East, and Africa) 38%.
The company’s DTC (Direct-to-Consumer) channel saw an 18% revenue growth, while the B2B (Business-to-Business) channel experienced a 26% increase, highlighting the robust demand for Birkenstock products globally.
The company’s gross profit margin for the quarter was 59.0%, a decrease of 640 basis points from the previous year’s fourth quarter. This decline was primarily due to the expected under-absorption impact from added production capacity and an increase in the B2B share relative to a year ago.
Additionally, currency translation impacts played a role, although pricing strategies helped offset some of these effects. Notably, the quarter’s net profit reached EUR 52 million, a substantial improvement from a net loss of EUR 28 million in the same period last year, with earnings per share (EPS) rising to EUR 0.28 from a loss of EUR 0.15.
Birkenstock Holding plc Beats Market Expectations in Q4 Turnaround
When comparing the fourth quarter performance to market expectations, Birkenstock exceeded the anticipated EPS of EUR 0.26, delivering an EPS of EUR 0.28. Revenue for the quarter was also impressive, coming in at EUR 456 million, well above the expected EUR 438.95 million.
The company’s adjusted net profit for the quarter was EUR 55 million, up 118% from the previous year’s EUR 25 million. Adjusted EPS also saw a significant rise to EUR 0.29, compared to EUR 0.14 in the prior year.
These figures indicate Birkenstock’s continued focus on enhancing profitability and delivering value to shareholders. The adjusted EBITDA margin improved by 190 basis points year-over-year, reaching 27.4%, reflecting the company’s operational efficiency and successful cost management initiatives.
Birkenstock Expects Adjusted FY’2025 EBITDA Margin of 30.8% to 31.3%
Looking ahead to fiscal 2025, Birkenstock has provided a positive outlook, expecting revenue growth of 15-17% in constant currency, driven by contributions from all segments, channels, and categories. The company anticipates an adjusted EBITDA margin of 30.8-31.3%, representing an increase of up to 50 basis points compared to fiscal 2024.
This guidance reflects Birkenstock’s confidence in maintaining strong growth momentum and improving profitability.
The company also expects its gross profit margin to improve as it increases utilization of new production facilities, moving closer to its long-term target of 60%. Additionally, Birkenstock projects an effective tax rate of approximately 30% and plans capital expenditures of around EUR 80 million.
The targeted net leverage ratio at the end of fiscal 2025 is expected to be approximately 1.5x, indicating a focus on maintaining a strong balance sheet while pursuing strategic growth initiatives.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
