Birkenstock Hits 20% Topline Growth in FY23, Predicts Continued Growth in FY24

German Footwear brand Birkenstock Holding Plc BIRK reported an FY23 revenue growth of 20% year-on-year to €1.49 billion on a constant currency and reported basis versus a consensus of $1.62 billion.

The number of units sold increased by 6%, and the average selling price (“ASP”) grew by 14%. DTC penetration expanded by 200 basis points to 40%, driven by a DTC revenue increase of 29% on a constant currency basis.

In the Americas region, Birkenstock achieved 21% revenue growth in FY23 on a reported and 20% on a constant currency basis, making the region the most significant contributor to overall revenue growth in absolute terms. 

Europe delivered 18% revenue growth in FY23 on a reported and constant currency basis. 

The APMA region had the highest growth in relative terms at 24% on a reported and 27% on a constant currency basis in FY23, with China and India as key growth drivers.

Gross profit margin expanded by 180 basis points to 62.1%. The adjusted gross profit margin declined by 20 basis points to 62.1%.

The adjusted EBITDA improved by 11% Y/Y to €483 million. The margin declined to 32.4% versus 35.0% Y/Y.

Adjusted EPS of €1.10 compared to €0.93 Y/Y and a consensus of $1.27.

Cash flows from operating activities improved by 53% Y/Y to €359 million.

In the fourth quarter of FY23, revenues grew by 16% on a reported and 22% on a constant currency basis Y/Y to 407.67 million versus a consensus of $303.31 million. 

The Americas segment reported the highest growth of all regions, driven by its engineered distribution. In particular, the B2B channel outperformed other markets. 

For Q4 FY23, Birkenstock reported a growth in B2B revenues in the Americas of 61% on a reported and 73% on a constant currency basis Y/Y. The Q4 adjusted EPS of $0.14 beat the consensus of $0.08.

FY24 Guidance: Birkenstock expects revenue of €1.74 billion – €1.76 billion on a constant currency basis, reflecting overall revenue growth of 17% – 18% Y/Y against a consensus of $1.88 billion. 

The company expects adjusted EBITDA of €520 million – €530 million on a constant currency basis, leading to a margin of approximately 30%. 

The company expects a modest headwind to adjusted EBITDA margins due to planned ramp-up costs and an initial under-absorption in Pasewalk. 

The added capacity will help fulfill future demand, and the company is on schedule to realize the benefits of this capacity expansion later in FY24 and the upcoming years. 

Long-term, Birkenstock expects an adjusted EBITDA margin in the low thirties.

Price Action: BIRK shares traded lower by 14.01% at $43.00 premarket on the last check Thursday.

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