Birkenstock shares tumble as Q3 results fall short; annual guidance reaffirmed

Birkenstock Holding (NYSE: BIRK) saw its shares plummet more than 12% Thursday after the German shoemaker missed analyst expectations for Q3 earnings and revenue.

Specifically, the company posted third-quarter earnings per share (EPS) of $0.40, falling short of consensus estimates of $0.52. Revenue was reported at $564.8 million, also slightly below the expected $566.15 million.

Birkenstock’s Q3 gross profit margin was 59.5%, down 220 basis points from 61.7% the previous year, primarily due to the temporary effects of capacity expansion.

Adjusted EBITDA was reported at €186.3 million ($206.6 million), implying a 33.0% adjusted EBITDA margin, and largely in line with consensus estimates of 32.9%.

“Our results for the third quarter of 2024 once again demonstrate the strength of our business model and our ability to achieve the growth and profitability goals we set out for you during our IPO and recent secondary offering roadshow,” said Oliver Reichert, CEO of Birkenstock Group.

“We achieved the highest quarterly revenue in our history, driven by unbreakable and growing demand across all segments, channels and categories.”

For fiscal 2024, the company reaffirmed its guidance, expecting revenue growth of approximately 19% on a reported basis and 20% on a constant currency basis, with an Adjusted EBITDA margin between 30% and 30.5%.

It also reiterated its medium to long-term profitability goals, targeting a gross profit margin of around 60% and maintaining an adjusted EBITDA margin above 30%.

From a wider perspective, BIRK's broad-based sales momentum and the confident sales/margin outlook "are reassuring and supportive of premium valuation," Baird analysts said in a post-earnings note.

However, given the stock's recent rally ahead of earnings, the "largely in-line print/outlook may not be enough to drive shares higher today."

Separately, BMO Capital Markets analysts said they "continue to see progress on deleveraging and see white space ahead at strong margins."

By Vahid Karaahmetovic

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