BIRKENSTOCK Holding shares fell after the German shoe company opted to keep its outlook unchanged, even as sales of its high-end sandals and clogs jumped more than expected in the first quarter.
The company’s shares fell as much as 7.3 per cent in early trading in New York, the most since August, as some analysts said the decision not to raise full-year guidance could disappoint investors.
Sales rose 19 per cent to 362 million euros (S$507 million) in the three months to December from a year earlier, with momentum especially strong in Asia and for closed-toed footwear, Birkenstock said on Thursday (Feb 20). That exceeded analysts’ average estimate of 356 million euros. The company affirmed its 2025 forecast for sales to grow as much as 17 per cent on a constant currency basis.
Still, a 10 per cent rise in direct-to-consumer sales – online and through the company’s retail outlets – in constant currency terms was below the 14 per cent expected by analysts. That may trigger investors’ worries that Birkenstock could be losing momentum, Edouard Aubin, an analyst at Morgan Stanley, said in a note.
Chief executive officer Oliver Reichert is trying to show investors that Birkenstock can remain fashionable and sustain its decade-long boom. The company is expanding production capacity in Germany and Portugal, and catering to previously untapped markets such as China and India.
Global uncertainty
Reichert defended the company’s decision not to raise its financial outlook on a call with analysts, citing uncertainty around the impact of potential global trade tariffs, interest rates and inflation.
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The company’s direct-to-consumer business will probably accelerate in the spring and summer as Birkenstock opens more company-owned stores and invests globally in its digital operations, he said. Birkenstock’s busiest season is in the northern hemisphere’s spring and summer months, when consumers are most likely to load up on open-toed footwear, Reichert added.
Though the winter months are historically Birkenstock’s slowest season, the company is benefiting from a growing range of closed-toe sneakers, boots, clogs and slippers, which often have higher price tags than its classic sandals. They sold especially well in the holiday season, making up more than half of Birkenstock’s business in both the Americas and Emea regions, it said.
Birkenstock is becoming a “four-season brand”, Reichert said.
Younger shoppers
The CEO also said many younger consumers are returning to shopping centres in the wake of the pandemic, which boosts business with retail partners and pulls some demand away from its e-commerce channel.
Growth was particularly strong in the Asia-Pacific region, where sales surged 47 per cent to 47 million euros in the quarter. The company has recently opened several new company-owned stores in the region, along with other Birkenstock-branded locations owned by partners.
The company is also expanding its offering of cheaper plastic footwear, which is bringing in new customers and convincing long-time fans to pick up extra pairs that are geared towards the beach and humid climates.
In the latest period, adjusted earnings before interest, taxes, depreciation and amortisation rose 25 per cent to 102 million euros, higher than analyst estimates. BLOOMBERG
