Birkenstock has today raised its annual revenue and core profit forecasts, betting on full-price selling and strong demand for its cork-based sandals and newer closed-toe styles mainly at its own stores, sending its shares up 14.3%.
Most wholesale retailers are still stocking up on popular Birkenstock products despite a wider effort to reduce inventory in the face of tepid demand for discretionary items such as footwear.
Birkenstock CEO Oliver Reichert said the company was increasing shelf space at its wholesale partners, and key retailers were buying more and pulling forward volumes to an earlier delivery date.
The German sandal maker has also been expanding its own stores, where its products are sold at full prices and largely above the average selling price at wholesale shops.
That helped its second-quarter direct-to-consumer (DTC) revenue grow more than 30%, while wholesale revenue rose 19.2%.
"It was feared that the 'Barbie' boost would wane, but with the brand still an influencer favourite, the sandals have been on fashion wish lists, and demand is translating into a sales uplift," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Birkenstock expects fiscal 2024 revenue between €1.77 billion and €1.78 billion euros, up from a prior forecast of €1.74 billion to €1.76 billion.
It forecast annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of between €535m and €545m, up from €520m to €530m expected earlier.
However, Birkenstock's quarterly adjusted EBITDA margin was down 470 basis points to 33.7%, pressured by its plans to expand globally and invest in production.
Birkenstock's second-quarter revenue rose 21.6% to €481.2m, compared with LSEG estimates of €466.1m. Adjusted profit per share came in at 0.41 euros, beating estimates of 0.36 euros.
