Birkenstock reports a 19% increase in third quarter revenue
As it continues to invest in expanding its production capacity and global footprint, the German-based company has reported a solid third quarter performance, with double-digit revenue growth in all channels and regions
“Our results for the third quarter of 2024 once again demonstrate the strength of our business model and our ability to achieve the growth and profitability goals we set out for you during our IPO and recent secondary offering roadshow. We achieved the highest quarterly revenue in our history, driven by unbreakable and growing demand across all segments, channels and categories (…). We remain confident in our ability to deliver on our medium to long-term objectives for mid-to-high teens revenue growth, gross profit margin of 60% and Adjusted EBITDA margin of over 30%”, commented Oliver Reichert, CEO of the Birkenstock group.
Third Quarter Results
In the three months to the end of June, the company’s revenue reached 565 million euros, an increase of 19% on both a reported and constant currency basis, as compared to the same period of last fiscal year. This increase was driven by strong double-digit revenue growth in all channels and regions.First, Birkenstock’s channel performance. In the third quarter of the current fiscal year, B2B revenue grew by 23% year-over-year due to high wholesale demand supported by strong sell-through, and DTC revenue grew by 14% year-over-year on a constant currency basis (against a tough comparison in the same period of the previous year of 26% growth).
Now to the geographical regions. In Europe, the company recorded a revenue growth of 19% on a constant currency basis in the third quarter, as compared to the same period of the previous year. Meanwhile, in the Americas, revenue grew by 15% on a constant currency basis, driven by strong consumer momentum and demand for the brand. In line with this, Birkenstock achieved a 41% increase in third quarter revenue on a constant currency basis in the APMA region, which is also benefiting from emerging demand.
In the third quarter of fiscal 2024, the company’s gross profit margin declined by 220 basis points to 59.5% from 61.7% in a similar period of last year, thanks “to the temporary impact of production capacity expansion combined with the increase in B2B share compared to a year ago”.
Birkenstock reported an adjusted EBITDA of 186 million euros in the three months to the end of June, up by 15% year-over-year, and an adjusted EBITDA margin of 33.0%, down by 140 basis points from 34.4% a year ago. This was due to the aforementioned “temporary gross profit margin impact of production capacity expansion”, as well as increased “public company costs and investments in retail expansion, partially offset by an increase in B2B share”.
Overall, the German-based company reported a net profit of 75 million euros in the third quarter, up by 18% on a comparable basis to the same period last year, and earnings per share of 0.40 US dollars, up by 15% from 0.35 US dollars. Adjusted net profit was 92 million euros, up by 14% year-over-year and adjusted earnings per share were 0.49 US dollars, up by 11% year-over-year.
Full Year Outlook
Birkenstock continues to expect a full year revenue growth of approximately 19% on a reported basis and 20% on a constant currency basis and an adjusted EBITDA margin of 30 to 30.5%.Image Credits: graziamagazine.com