Birkenstock (NYSE: BIRK), the German luxury footwear brand, announced its Q4 and full fiscal year 2023 results, surpassing analyst estimates. This success is driven by robust demand for its sandals and clogs, alongside increased pricing strategies. Despite this, the company cautioned that its profit margins might face pressure due to its investments aimed at global expansion.
This announcement comes amid a slowdown in global luxury demand, as seen in the modest sales forecasts from industry peers like Nike and JD Sports Fashion. Birkenstock's sales resilience, with some footwear priced up to $350 a pair, is partly due to the shift towards casual dressing post-pandemic. The brand has effectively leveraged its online platform and physical stores, with direct sales contributing 40% to its total 2023 revenue after a 29% surge in the fourth quarter.
The company reported a 16.5% increase in quarterly revenue to 374.54 million euros ($407.7 million), exceeding market forecasts. However, its adjusted earnings per share of 0.14 euros missed the expected 0.17 euros. Notably, sales in the Americas saw a significant 30% rise, with China and India emerging as key markets.
For fiscal 2024, Birkenstock anticipates revenue between 1.74 billion euros and 1.76 billion euros, slightly above analyst expectations of 1.72 billion euros. Despite this, the projected growth of 17-18% marks a deceleration from 2023's 20% increase. The company attributes its growth to a 6% increase in unit sales and a 14% rise in average selling price since 2022, improving its gross profit margin to 62.1%.
Looking ahead, Birkenstock forecasts its 2024 adjusted EBITDA to be between 520 million euros and 530 million euros. Part of its strategy includes launching mono-brand stores, further emphasizing its commitment to global expansion and brand presence.
