Birkenstock Holding plc (BIRK) AI Stock Analysis

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Birkenstock Holding plc

(NYSE:BIRK)

75Outperform

Birkenstock's strong financial performance and positive earnings call results are the most significant factors driving the stock's appeal. Despite some technical weaknesses and a high valuation, the company's strategic growth initiatives and robust revenue expansion present an optimistic outlook.

Positive Factors

Brand Loyalty

The company is underpinned by a loyal brand following.

Geographic Expansion

Birkenstock is focusing on expanding its presence in the APAC region, which has shown significant growth potential.

Product Diversification

Birkenstock is broadening its product range to include closed-toe shoes, orthopedics, and professional categories, which helps expand its market.

Negative Factors

Gross Margin Pressure

GMs were down 70bp due to a higher wholesale mix, as expected, and this pressure is expected to continue in 2Q.

Macro Issues

Management acknowledges there are real macro issues at play.

Wholesale Channel Pressure

The company stressed the health of its wholesale channel with strong gains in full-price sell-through.

Birkenstock Holding plc (BIRK) vs. S&P 500 (SPY)

Market Cap

$8.87B

Dividend YieldN/A

Average Volume (3M)2.03M

Price to Earnings (P/E)38.0

Beta (1Y)1.02

Revenue Growth20.40%

EPS Growth134.09%

CountryUS

Employees6,200

SectorConsumer Cyclical

Sector Strength62

IndustryApparel - Footwear & Accessories

Share Statistics

EPS (TTM)1.26

Shares Outstanding187,829,210

10 Day Avg. Volume2,561,083

30 Day Avg. Volume2,026,288

Financial Highlights & Ratios

PEG Ratio0.28

Price to Book (P/B)N/A

Price to Sales (P/S)17.09

Price to Cash Flow (P/CF)11.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$66.83

Price Target Upside41.44% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering13

Birkenstock Holding plc Business Overview & Revenue Model

Company DescriptionBirkenstock Holding plc manufactures and sells footwear products. It also offers sandals, shoes, closed-toe silhouettes, skincare products, and accessories. The company sells its products through e-commerce sites and a network of owned retail stores, as well as business-to-business channels. It operates in the United States, Brazil, Canada, Mexico, Europe, APMA, and internationally. Birkenstock Holding plc was founded in 1774 and is based in London, the United Kingdom. Birkenstock Holding plc is a subsidiary of BK LC Lux MidCo S.à r.l.

How the Company Makes MoneyBirkenstock Holding plc generates revenue primarily through the sale of its footwear products, which include sandals, shoes, and insoles. The company's key revenue streams are its retail operations, both online and through brick-and-mortar stores, as well as wholesale distribution to third-party retailers globally. Birkenstock's strong brand reputation and loyal customer base drive consistent demand for its products. Additionally, strategic partnerships and collaborations with fashion designers and other brands enhance its market presence and expand its consumer reach. The company's focus on sustainability and quality also allows it to command premium pricing, contributing to its overall earnings.

Birkenstock Holding plc Financial Statement Overview

Summary

Birkenstock Holding plc demonstrates strong financial health with robust revenue and profitability growth, solid balance sheet metrics, and effective cash flow management. While there is room for improvement in cash generation relative to net income, overall financial stability and growth prospects remain positive.

Income Statement

Very Positive

Birkenstock Holding plc has demonstrated strong revenue growth, with the latest TTM revenue reaching approximately $1.87 billion, up from $1.49 billion in the previous year, indicating robust growth. The gross profit margin is healthy at around 57.6%, and the net profit margin has improved to 11.7%, highlighting improved profitability. The EBIT and EBITDA margins are strong, reflecting operational efficiency. These positive trends showcase strong financial performance in the income statement.

Balance Sheet

Positive

The company maintains a solid balance sheet with an equity ratio of 54.9%, indicating a strong equity position relative to total assets. The debt-to-equity ratio has improved to 0.51, showcasing effective leverage management. Return on equity has increased to 8.0%, reflecting enhanced shareholder returns. Overall, the balance sheet indicates a stable financial position, with a cautious approach to leverage.

Cash Flow

Positive

Birkenstock's cash flow statement reveals a positive trajectory in free cash flow, growing to $373 million in the latest TTM. The operating cash flow to net income ratio is robust, ensuring strong cash conversion. However, the free cash flow to net income ratio is slightly lower, suggesting room for improvement in cash generation relative to net income. Overall, the company exhibits solid cash flow management.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
1.87B	1.80B	1.49B	1.24B	962.13M	728.55M
	Gross Profit
1.08B	1.06B	925.79M	749.80M	545.65M	260.28M
	EBIT
455.86M	421.08M	260.69M	363.03M	230.25M	-42.71M
	EBITDA
535.07M	503.67M	360.35M	423.14M	230.25M	3.35M
	Net Income Common Stockholders
218.88M	191.60M	75.02M	187.11M	116.44M	-106.19M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
298.59M	376.46M	354.06M	307.08M	235.34M	96.18M
	Total Assets
5.01B	4.88B	4.83B	4.79B	4.27B	803.56M
	Total Debt
1.39B	1.35B	1.98B	2.04B	1.89B	220.43M
	Net Debt
1.10B	994.23M	1.64B	1.74B	1.65B	124.26M
	Total Liabilities
2.26B	2.26B	2.43B	2.43B	2.20B	395.39M
	Stockholders Equity
2.75B	2.63B	2.40B	2.36B	2.06B	398.16M
Cash Flow		Free Cash Flow
373.00M	354.80M	255.79M	161.54M	159.65M	171.26M
	Operating Cash Flow
447.61M	428.70M	358.73M	234.14M	181.41M	193.60M
	Investing Cash Flow
-66.48M	-58.80M	-100.73M	-71.65M	-18.20M	-3.50M
	Financing Cash Flow
-254.72M	-355.05M	-199.28M	-105.32M	-84.96M	-130.25M

Birkenstock Holding plc Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price47.25

Price Trends

50DMA

49.22

Negative

100DMA

52.29

Negative

200DMA

52.32

Negative

Market Momentum

MACD

-1.23

Negative

RSI

44.77

Neutral

STOCH

58.39

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BIRK, the sentiment is Neutral. The current price of 47.25 is above the 20-day moving average (MA) of 45.80, below the 50-day MA of 49.22, and below the 200-day MA of 52.32, indicating a neutral trend. The MACD of -1.23 indicates Negative momentum. The RSI at 44.77 is Neutral, neither overbought nor oversold. The STOCH value of 58.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BIRK.

Birkenstock Holding plc Risk Analysis

Birkenstock Holding plc disclosed 81 risk factors in its most recent earnings report. Birkenstock Holding plc reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Birkenstock Holding plc Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CROX	76 Outperform	$5.58B	5.98	57.76%	―	3.53%	24.55%
DECK	76 Outperform	$16.64B	17.70	39.80%	―	19.40%	32.70%
BIRK	75 Outperform	$8.87B	38.02	8.52%	―	20.40%	134.09%
SHOO	74 Outperform	$1.54B	9.00	20.20%	3.97%	15.03%	1.51%
SKX	70 Outperform	$7.55B	11.89	15.42%	―	12.11%	19.16%
WWW	59 Neutral	$902.73M	19.25	15.57%	3.59%	-21.75%	―
Sector *	59 Neutral	$11.38B	10.18	-0.84%	4.04%	1.25%	-16.04%

* Consumer Cyclical Sector Average

Performance Comparison

BIRK

Birkenstock Holding plc

48.01

5.85

13.88%

CROX

Crocs

92.56

-30.80

-24.97%

DECK

Deckers Outdoor

109.05

-26.85

-19.76%

SKX

Skechers USA

49.47

-7.01

-12.41%

SHOO

Steven Madden

20.80

-17.47

-45.65%

WWW

Wolverine World Wide

11.05

2.00

22.10%

Birkenstock Holding plc Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: -6.88% | Next Earnings Date: May 29, 2025

Earnings Call Sentiment Positive

Birkenstock's first quarter of fiscal 2025 showed strong performance across various metrics, including record revenue growth, significant expansion in the APAC region, and increased demand for closed-toe footwear. Despite a slight decrease in gross margin and seasonal working capital challenges, the overall positive results and strategic growth initiatives suggest a promising outlook.

Highlights

Record Revenue Growth

Birkenstock reported a 19% revenue growth for the first quarter of fiscal 2025, exceeding the high end of their 15% to 17% target for the full year. This growth was driven by a combination of strong holiday demand, double-digit volume growth, and mid-single-digit growth in average selling price.

B2B and DTC Business Performance

The B2B business grew by 30% in the first quarter, driven by strong sell-through and reorders from wholesale partners. The DTC business also grew by 10%, with a notable increase in website traffic during the holiday season.

APAC Region Growth

The APAC region was the fastest-growing segment, with a 47% increase, 2.5 times the pace of the overall business. This growth was supported by store openings and increased brand awareness.

Expansion in Closed-Toe Footwear

Revenue from closed-toe silhouettes grew at twice the rate of the overall group, accounting for over half of the revenue in the quarter and increasing share of business by 600 basis points.

Strong Membership Growth

Birkenstock's membership base grew by nearly 30% year-over-year, reaching 8.8 million loyal members.

Lowlights

Gross Margin Slightly Down

Gross margin for the quarter was 60.3%, slightly down by 70 basis points year-over-year, primarily due to a higher B2B mix.

Seasonal Working Capital Challenges

Cash and cash equivalents decreased from €356 million at the end of fiscal 2024 to €299 million this quarter, due to normal seasonality of working capital usage.

Company Guidance

During Birkenstock's first quarter 2025 earnings call, the company reported a robust performance with a 19% revenue growth, surpassing the high end of their 15% to 17% annual target. The growth was fueled by strong holiday demand, double-digit volume growth, and mid-single-digit growth in average selling prices. The B2B segment saw a significant 30% increase, while the DTC business grew by 10%. The company opened four new retail stores, bringing the total to 71 globally, and their APAC region led growth with a 47% increase. Birkenstock's EBITDA margin improved by 25%, reaching 28.2%, with an adjusted net profit of €33 million, up 99% year-over-year. The company's membership base grew to 8.8 million, marking a 30% increase from the previous year. Looking ahead, they anticipate balanced growth between DTC and B2B channels, maintaining their 15% to 17% revenue growth guidance for the year.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.