Birkenstock Holding plc ((BIRK)) has held its Q1 earnings call. Read on for the main highlights of the call.
Birkenstock’s first quarter of fiscal 2025 earnings call painted a picture of robust performance and strategic growth, with the company achieving record revenue growth and significant expansion in key markets. Despite some challenges, the overall sentiment was positive, underscoring a promising outlook for the year ahead.
Record Revenue Growth
Birkenstock reported an impressive 19% revenue growth for the first quarter of fiscal 2025, surpassing their annual target range of 15% to 17%. This achievement was driven by strong holiday demand, double-digit volume growth, and a mid-single-digit increase in average selling prices, highlighting the company’s ability to capitalize on market opportunities.
B2B and DTC Business Performance
The company’s B2B segment experienced a remarkable 30% growth, fueled by strong sell-through and reorders from wholesale partners. Meanwhile, the DTC business also saw a healthy 10% increase, with a notable rise in website traffic during the holiday season, demonstrating the effectiveness of Birkenstock’s multi-channel strategy.
APAC Region Growth
The APAC region emerged as the fastest-growing segment for Birkenstock, with a staggering 47% increase, outpacing the overall business growth by 2.5 times. This success was supported by strategic store openings and heightened brand awareness, positioning the company for continued success in this dynamic market.
Expansion in Closed-Toe Footwear
Birkenstock’s closed-toe footwear segment saw revenue growth at twice the rate of the overall group, accounting for over half of the quarter’s revenue. This expansion increased the business share by 600 basis points, reflecting the growing consumer preference for these products.
Strong Membership Growth
The company’s membership base grew by nearly 30% year-over-year, reaching 8.8 million loyal members. This growth underscores Birkenstock’s successful customer engagement strategies and the strength of its brand loyalty.
Gross Margin Slightly Down
Despite the positive revenue growth, Birkenstock’s gross margin slightly decreased by 70 basis points to 60.3%, primarily due to a higher B2B mix. This indicates a need for careful margin management as the company continues to expand its B2B operations.
Seasonal Working Capital Challenges
Birkenstock faced seasonal working capital challenges, with cash and cash equivalents decreasing from €356 million at the end of fiscal 2024 to €299 million this quarter. This was attributed to the normal seasonality of working capital usage, highlighting the importance of efficient capital management.
Forward-Looking Guidance
Looking ahead, Birkenstock maintains a positive outlook, anticipating balanced growth between its DTC and B2B channels while maintaining its 15% to 17% revenue growth guidance for the year. The company also plans to continue expanding its retail footprint and enhancing its brand presence, particularly in the APAC region.
In summary, Birkenstock’s first quarter of fiscal 2025 earnings call reflected a strong performance and strategic growth initiatives. With record revenue growth and significant expansion in key markets, the company is well-positioned for continued success, despite some challenges in margin and working capital management. The overall sentiment was optimistic, with forward-looking guidance reinforcing confidence in Birkenstock’s growth trajectory.