Latest news with #OliverReichert
Forbes
4 days ago
- Business
- Forbes
Birkenstock Unveils New Florida Sandal For Spring/Summer 2025
Arizona shoe from Birkenstock Spring/Summer 2025 Courtesy of Birkenstock When it comes to footwear, few brands are as iconic as the German company Birkenstock. They have become a staple for many and can be dressed up or down to suit most occasions. This summer, celebrating its rich archive, Birkenstock has launched a new version of the timeless three-strap Florida sandal. Originally designed by Karl Birkenstock in 1981, this latest offering remains true to its heritage by combining craftsmanship with functionality. In addition to being unisex, the Birkenstock Florida offers a new silhouette that's both contemporary and classic, and is available in fresh colorways, featuring nubuck leather and vegan alternatives. Birkenstock sales are rising due to strong customer demand, and according to WWD, the company posted second-quarter double-digit revenue growth across operating regions. Birkenstock stated that sales in this quarter were helped by double-digit unit growth and a mid-single-digit growth in ASP (average selling price). They also noted that sales of their clogs (closed-toe shoes), which grew at more than twice the pace of the group average in the first quarter, continued to outpace the strong double-digit growth of sandals. Tariff uncertainty, however, is likely to lead to higher prices, but the CEO of Birkenstock, Oliver Reichert, stated that they will navigate these uncertain times from a position of strength. 'We expect that the tariff situation may create a unique shift in consumer behavior in the footwear category with a split between the few brands, like Birkenstock, who manage strong brand equity through relative scarcity and those who distribute their products with less discipline and pricing integrity,' said Reichert. In recent years, the Florida style has been available as a limited-edition shoe from Birkenstock's premium line '1774', named after the year the company was founded. The style has been reinterpreted in unexpected materials, including pastel-colored suede, embossed leather, faux snakeskin, and transparent PVC. Florida shoe from Birkenstock Courtesy of Birkenstock Unlike the two-strap Arizona, the Florida is characterized by having an elegant three-strap shape. For Spring/Summer 2025, it will become a permanent part of the Birkenstock collection, available in shades such as Pure Sage and Sandcastle, which are ideal for the summer season. Options of the Florida sandal include leather, Birki-Flor (a durable synthetic material used by Birkenstock as an alternative to leather), and Flex Vegan materials in various colors. To round off the broad offering, a bold Papillio Florida Platform in lightweight EVA material adds a playful and youthful touch, bringing an edge to the existing lineup. There is also a premium version of this shoe: the Florida Exquisite, adorned with the newly introduced half-moon-shaped D-buckle in gold and sporting fully leather-lined footbeds. At its core, drawing on over 250 years of shoemaking expertise, Birkenstock remains rooted in refined craftsmanship and lasting functionality, with an anatomically shaped footbed that is the hallmark of the brand, providing comfort for all-day wear. Their new Florida style offers a fresh aesthetic, adding to a footwear family that has become so popular that it is now, for many, an integral part of everyday life. For alternative summer shoe options, Spring/Summer 2025 offers a variety of styles that will keep your feet looking stylish throughout the season. On the catwalk, we saw a diverse range, including clogs, flip-flops, and pumps in various shapes and finishes, from classic to quirky, catering to all tastes. For ultimate comfort, flip-flops and sliders are an obvious choice. As high-end designers reinvent this classic footwear, they're no longer restricted to poolside attire, and if styled correctly, they're welcomed into the urban landscape. This summer, luxury brands such as The Row, Miu Miu, Versace, and Dior have all released different versions of the humble flip-flop with various heel heights. Burberry High Summer 2025 shoe Courtesy of Burberry Highlights at Chloe's runway collection included flip-flop-style jelly shoes, wedge sandals, and peep-toe pumps—some flat and some with a kitten heel, featuring thin straps that extend up the ankle. Fendi's offerings included low mules, leather slides and embellished thongs (some with delicate floral detailing). Chanel showcased stylish platform sandals, and Gucci's slides presented logos, including the interlocking G slide sandal and the slide sandal with a horsebit, in a rendition of the nineties logomania trend. Scholl Spring Summer 2025 Courtesy on Scholl Nike Calm Flip Flop Women's Courtesy of JD Sports Ballet shoes have continued to inspire designers this season. On the catwalk for Spring/Summer 2025, we saw ballet pumps in various finishes, which have become a firm favorite due to their comfort and versatility. This slimmer silhouette is also evident across various men's summer shoes, including trainers. Some ballet pump designs, like the original ballet shoe, are flat and made of satin, evoking a chic dance aesthetic. Other versions, however, include heels, open-toe and lace-up ribbon ties. Brands such as Burberry, Toteme, and Proenza Schouler featured ankle ties in their Spring/Summer 2025 sandals. Ferragamo's lace-up ballet shoes, their satin-trimmed leather pumps and heeled sandal versions in particular, have caught the eye of many fashion editors and been dubbed by some the "it shoe" of the season for their versatility and comfort. Clogs (closed and open-toe) were also heavily featured at many design houses this summer, including at Chloe (with platforms), Hermès, Miu Miu, and Zimmermann. These are essentially a unisex bohemian shoe style rooted in comfort, with a rigid sole made of wood, cork and other materials. The Italian brand Scholl has been a pioneer in this sector since its inception in 1899, and has revamped the collection this season with new styles. The Pescura, first introduced in 1956, is now available in new finishes and features in various heel heights. This shoe is handmade by an artisanal, family-owned Italian business, showcasing a passion for craftsmanship, the use of high-quality materials, and a dedication to providing enduring, genuine comfort. Scholl has also collaborated with Balenciaga to produce a collection of heels, as well as clogs and sandals in various styles for both men and women, along with some pool sliders. Scholl Spring/Summer 2025 Courtesy of Scholl Like Birkenstock, Scholl shoes are orthopedic, meaning they are committed to crafting footwear that not only complements various lifestyles but also promotes foot health. Their unique designs have stood the test of time, and with the current aesthetic shift we are experiencing towards individuality and wellness, it would seem that they're very much in vogue and here to stay.
Yahoo
16-05-2025
- Business
- Yahoo
Q2 2025 Birkenstock Holding PLC Earnings Call
Megan Kulick; Analyst; Birkenstock Holding PLC Oliver Reichert; Chief Executive Officer, Director; Birkenstock Holding PLC Ivica Krolo; Analyst; Birkenstock Holding PLC Mehdi Bouyakhf; President of Europe; Birkenstock Holding PLC David Kahan; President of Americas; Birkenstock Holding PLC Klaus Baumann; Chief Sales Officer; Birkenstock Holding PLC Alexandre Arnault; Director; Birkenstock Holding PLC Matthew Boss; Analyst; JPMorgan Simeo Siegel; Analyst; BMO Mark Altschwager; Analyst; Baird Dana Telsey; Analyst; Telsey Group Vasilescu Laurent; Analyst; BNP Paribas Paul Lejuez; Analyst; Citi Jay Sole; Analyst; UBS Lorraine Hutchinson; Analyst; Bank of America. Sam Poser; Analyst; Williams Trading Michael Binetti; Analyst; Evercore Edward Apfel; Analyst; Morgan Stanley Anna Andrea; Analyst; Piper Sandler Janine Stichter; BTIG; BTIG Irwin Rammborg Adrien Duverger; Analyst; Goldman Sachs Peter McGoldrick; Analyst; Stifel Operator Good morning, and thank you for standing by. Welcome to Birkenstock's quarter 2025 earnings conference call. (Operator Instructions) I would like to remind everyone that this conference call is being recorded. I will now turn over the call to Megan Kulick, Director of Investor Relations. Megan Kulick Hello and thank you everyone for joining us today. On the call are Oliver Reichert, Director of Birkenstock Holding PLC and Chief Executive Officer of the Birkenstock Group; and Ivica Krolo, Chief Financial Officer of the Birkenstock Group; David Kahan, President of Americas; Nico Bouyakhf, President of EMEA; and Alexander Hoff, Vice President of Global Finance, will join us for the Q&A. Today, we are reporting the financial results for our fiscal second quarter of 2025 ending March 31, 2025. You may find the press release and supplemental presentation connected to today's discussion on our investor relations website at We would like to remind you that some of the information during this call is forward-looking and accordingly is subject to the safe harbor provision of the Federal securities law. These statements are subject to various risks, uncertainties, and assumptions which could cause our actual results to differ materially from these statements. These risks, uncertainties, and assumptions are detailed in this morning's press release, as well as in our filings with the SEC, which can be found on our website at We undertake no obligation to revise or update any forward-looking statements or information except as required by law. We will reference certain non IFRS financial information. We use non IFRS measures as we believe they represent the operational performance and underlying results of our business more accurately. The presentation of this non-IFRS financial information is not intended to be considered by itself or as a substitute for the financial information prepared and presented in accordance with IFRS. Reconciliations of IFRS to non-IFRS measures can be found in this morning's press release and in our SEC filings. With that, I'll turn the call over to Oliver. Oliver Reichert Good morning everybody, and thank you for joining us. We are meeting today at the moment when the world seems unpredictable. The current context is a stress test for the resilience of business models. As our results for the second quarter show, we have passed this test very well. Our company is in a good shape, and we are confident about our future. Our performance is rooted in the power of a universal purpose-driven brand that stood the test of time. We control our own supply chain with 95% of our products made in Germany and 100% made in Europe. And 96% of our raw materials sourced in Europe. This helps shield our business from the current disruptions. Once again, we're delivering on the promises we made during our IPO. In the second quarter, we delivered a record EUR574 million in revenues. On a reported basis, this was up 19% year over year. In constant currency, revenue grew by 18% above the high end of our 15 to 17% target for the full year. Revenue growth was driven by a double digit volume increase supported by continued ASP growth. The manufacturing capacity we have added over the past 2 years has allowed us to increase our production to meet the increasing demand for the stock. Sales numbers for our five iconic silhouettes grew double digit, contributing to both volume and ASP the same time, we continue to tap into the white are, as close to shoes, our own retail stores, and the APEC of which contributed to our strong growth. As expected, growth in the second quarter was balanced between our B2B and D2C channels, with B2B coming in at 18% and D2C at 17%. The DTC growth was driven by our investments in our online and owned retail membership base reached over 10 million loyal members, up over 25% year over year. We are on track with our retail expansion with now 77 owned stores, adding six new doors during the second quarter. As shared, we are heading towards 100 own stores by the end of this fiscal year, and we are confident we will get there. During the quarter, revenue from closed door silhouettes grew at twice the rate of the overall group and increased share of business by 400 basis points. Demand for closed toe silhouettes for spring summer '25 was up strong double digits, and we see continued strength as we build our order book for spring summer '26. Almost half of our top 20 selling silhouettes in the quarter were close to. Let us now have a brief look at the segment performance. Within our largest segment, the Americas, we experienced continued strong consumer demand for our brand. Revenue in the region was up 23% in reported currency and 20% in constant currency. Compared to the second quarter of '24. Both the B2B and the DTC channel grew double digit. Within the B2B channel, the fastest growth came from our youth, sporting goods, outdoor and department store partners. America's D2C strengthened in the quarter from investments we made in the digital channel and from our expanded physical retail presence. We opened one new door in Nashville, bringing our own store count in the region to EMEA, we delivered double digit growth of 12%. In the recently integrated Middle East Africa area we have been taking further actions to be more focused in our growth. D2C remained very strong, outpacing B2B growth by 1.5 our DTC channel, shoes are the 2nd biggest category behind Classics leather, showcasing the continued momentum in this important increased our brand presence and awareness with the opening of new stores in London and Paris, bringing our store count in EEA to created some strong brand moments, bringing our mission to life across the region. One highlight was an experimental pop-up store in Les Deal in France where we hosted over 3,000 brand fans and members in a month. The APEC region was again the fastest growing segment in the quarter. Our largest white space region grew by 30%, driven by very strong growth in our DC channel. We opened three new owned retail stores in India, Japan, and China, bringing the total number of stores in the region to 30. We also expanded our strategic partnerships, increasing our mono brand partner doors by 20%, driving very strong double-digit growth in our B2B channel. Consistent with the other segments, close to and higher price premium leather executions are growing faster than the regional average and contributing to positive ASP growth in the region. Our top 3 markets in terms of revenue were Australia, China, and Japan. All grew significantly above segment average with China more than doubling in revenue year over year. As a reminder, we're just beginning to enter Greater China in a meaningful way and see the opportunity for continued strong growth in this market. The strong results make us confident for our important spring-summer selling season. As we are seeing great momentum across all product channels, categories, and segments, I will now turn it over to Ibiza to discuss our financial results in more detail. Ivica Krolo Thanks, Oliver. I'm happy to share with you Birkenstock's performance for the 2nd quarter of 2025, which came in ahead of our expectations. Second quarter revenues were EUR574 million with growth of 19% on a reported in 18 in constant currency above the high end of our 15% to 17% annual guidance for the year. It is expected growth in B2B and B2C were balanced in the quarter, with B2B up 1,918 in constant currency, and B2C up 1,917 in constant currency. B2C's share of business was 24% equal to the prior year. As a reminder, the second quarter is seasonally or heaviest in terms of B2B mix, given the timing of the sell in to our partners for the spring summer season. Gross margin for the quarter was 57.7%, up 140 basis points year over year. Better absorption of costs related to a new manufacturing facility contributed about 50 basis points. The remainder is made up by selected price adjustments, net of higher input costs, and favorable currency translation. Selling and distribution expenditures were EUR127 million in the second quarter, representing 22% of revenue, down 150 basis points from the prior year, mainly due to the reclassification of expenses into GNA previously recorded in S&D. General administration expenses were EUR32 million or 5.6% of revenue in the quarter, up 150 basis points year over year due to the reclassification, as well as higher IT expenses primarily related to the ERP conversion in the Americas. Adjusted EBDA in the second quarter of EUR200 million was up 23% year over year, and margin of 34.8% was up 110 basis points year over year. This was primarily due to the improvement of gross profit margin and the favorable currency translation partially offset by the higher GNA. Adjusted net profit of EUR103 million in the second quarter was up 33% year over year, and adjusted EPS was EUR55 cents, up from EUR41 cents from a year ago. Cash flows used in operating activities during the 2nd quarter were EUR18 million down from 68 million compared to last year due to the timing of tax payments relating to prior years. We ended the quarter with cash and cash equivalents of EUR235 million. We continued to proactively manage working capital and we improved our inventory to sales ratio to 36%, down from 40% in Q2 2024, and our DSO for the quarter were 46% in line with 44% a year ago. During the quarter, we spent approximately EUR21 million in capital expenditures adding to our production capacity in arwa, Gurlitz and Aruka and continuing our investments in retail and IT. We are on track to meet our CapEx targets of around 80 million for the year. Our net leverage was 1.8 times as of March 31, 2025, down slightly from 1.9 at the end of Q1. As is typical, we expect to see positive operating cash flow contribution in Q3 and Q4 due to the seasonality of all working capital. As we look forward to the remainder of fiscal 2025, we believe we are well positioned to meet or exceed our stated growth and profitability objectives. Wittenstock is less exposed to tariffs with 100% of our production and 96% of all materials sourced from Europe and no contract manufacturing from Asia. We already have taken appropriate actions to mitigate the impact on tariffs both near term and long term. We have multiple levers to pull and are in a strong position with experience in managing inflationary pressures, including tariffs. First, the consistency and demand together with our engineer distribution and scarcity model allows for pricing flexibility. For a full offset of tariff impact, we would need only a low single digit price increase globally, which is consistent with our historical level of pricing actions. Pricing is not the only lever we have though. Given our vertical integration, Additional levers include efficiencies in production, vendor negotiations, the optimization of product mix, and the allocation of products between the different regions. This, together with our strong inventory position gives us the confidence that we can mitigate the fiscal 2025 tariff impact. While FX was a benefit to us in the first half of the year, the recent depreciation in the dollar will create a headwind to our reported growth and margins in the 3rd and 4th quarter. But despite the tariff and FX headwinds we face in the second half, we are confident that we will be able to meet or beat our financial targets for fiscal year 2025. Based on the results to date and the current trends we are seeing in the business, we now expect to be at the high end of our constant currency revenue growth guidance of 15 to 17%. More importantly, provided we do not see any further weakening of the dollar and no additional tariffs on imports from the EU to the US, we now expect adjusted EBITDA margin of 31.3% to 31.8%, 50 basis points above our previous guidance. This implies an adjusted EBITDA target in the range of EUR660 million to EUR670 million up 19% to 21% year over year. And now I'll be handing back to Oliver. Oliver Reichert Thanks Ivica. The first half results of our fiscal 2025 demonstrate the strength of our brand with strong double-digit revenue growth, excellent margins, and significant progress in our whitespace growth initiatives. We expect that the tariff situation may create a unique shift in consumer behavior in the footwear category with the split between the few brands like Benstock, who manage strong brand equity through relative scarcity and those who distribute their products with less discipline and pricing integrity. We will navigate through these uncertain times from a position of strength as we have successfully done in the past. Think about COVID, where we came through the challenge stronger than before. And don't forget about the import tariffs previously imposed by the US administration. Which we completely absorbed without any loss of sales. That's why I am confident today. Our decades-long track record of managing our brand through a consistent engineered distribution strategy puts Besto in a strong position to take additional shelf space and gain share. We are a brand with industry leading growth, pricing power, clean inventories, strong profitability, global reach, a very healthy balance sheet, and cash generation. We believe there are few consumer companies better positioned today to drive steady long-term growth and shareholder returns. I would now kindly ask the operator to open our Q&A session. Thank you. Operator Thank you. At this time, we will be conducting a question and answer session. (Operator Instructions) Matthew Boss, JPMorgan. Matthew Boss Great, thanks and congrats on another really nice quarter. Thanks man. So Oliver, could you speak to your confidence in your outlook for the rest of the year and your raised IADA margin guidance, despite the elevated macro uncertainty with tariffs and foreign exchange or really what are you seeing in your current business to give you this confidence? Oliver Reichert Good morning, Matt. Thank you for your question. Let me tell you one thing for us, the whole situation is an opportunity and not a risk. Be assured we will fully offset the effect of the existing tariffs. We are aware that currency is moving around quite a bit, but as always, we will share FX impact with full visibility. So of course we have factored the current FX level into our margin outlook. But most importantly, we and our partners are not seeing any changes to consumer behavior and demand out there. When it comes to product and to our product, there's no change at all. Full price realization remains at 90% and our order book from wholesalers remains very strong without any cancellations. So I think that's the ultimate test of truth to undermine the strength of the brand and pricing power. We are well positioned to take shelf space and we could speed up, of course, our retail expansion if we have an opportunity. Matthew Boss Well, it's a great color. Best of luck. Thanks Oliver and Matt, maybe to add on your question with regards to EBDA margin as compared to our original guidance, it's two drivers for that. Mostly it is coming from gross margin improvement from first error absorption, and then second pricing net of installations, which are the two key drivers for improved EBDA margin over the course of this year. Matthew Boss Great, thanks for the color. Operator Simeon Siegel, from BMO. Simeo Siegel Thanks. Hey, everyone. Really nice ongoing broad strength. So nice to see. To follow up a little bit, so just among everything else, the D2C in America's strength is really great, likely encouraging to many investors. Could you just speak to the implied topline deceleration in the back half, which I think looks a little bit below the 18 performance, and then, gross margin was. Nicely better and really great to see the ongoing improvement from from the passive ramp. How should we think about the progression of gross margin going forward, maybe add any color there from just again stripping out effects to your point or any remaining passive implications versus just the underlying gross margin dynamics. Thanks guys. Thanks a million. So as with our B2B we have an order book which provides us with great visibility in terms of growth, but as you also know, the second half is more B2C heavy compared to the first half of the fiscal year. So we have naturally less visibility as a result of that. And given the current macro conditions, we are, as you are aware, prudent in our planning, given this reduced visibility in the second half. In terms of cadence or seasonality, the 3rd quarter is typical, will be the slowest growth quarter for the year. The first reason is just simple mathematics. The sandals share is the heaviest in the 3rd quarter, and while sandals are growing double digit, close to shoes grow 2 times as fast. So the weighted growth is slowest in the third quarter in the fiscal year. So this covers the first part of your question. The second question on gross margin comes back to my initial statement. So we had expected about 50 basis points tailwind to gross margin for the full fiscal year '25 for better absorption, primarily, however, in the second quarter of the year. Now we're seeing 50 basis points in, so we are already slightly ahead of schedule. We now think that we will be about 75 basis points, which will be the benefit for '25, with the remainder coming in in the fiscal year '26. So as I mentioned earlier, this will be driving the improved gross margin. Simeo Siegel That's great, thanks guys, best of luck for the year. Operator Mark Altschwager, Baird. Mark Altschwager Thanks for taking my question and great results. Could you expand more on your plans for tariff mitigation and the impact for demand, the impact on demand for Birkenstock, and relatedly, could you just speak to the the timing, any callouts on the timing of when you expect the costs and the offsets to flow through the P&L? Thank you. Thank you, Mark speaking, yes, sure. So most importantly, and as already mentioned, we will fully offset the existing 2025 tariff impact. As we are a brand with a proud heritage being made in Europe. As such, we are less exposed than most, so 96% of our raw materials, 96% of our raw materials are sourced from within Europe, and 100% of our manufacturing and final assembly is from the EU. That will offset the tariff impact. First, we will look at global pricing. So as we have a goal to maintain the global pricing architecture and the tariffs in the US will not change that. We are in a position where we have pricing flexibility without impact on consumer demand, which is very consistent. And as we have also a 90% plus full price realization given the brand equity that we've not only built in the US but also beyond. And second, unlike our competitors, we are virtually vertically integrated, so we have other levers to pull, mainly the ability to gain efficiencies across our value chain. And so overall in an environment where consumers face pressure from inflation in many areas, we expect to see even more intentional purchasing and a shift between the brands in high demand like we are and those brands that are struggling will need to gain consumer attention and as such referring back to what Oliver said. We do see this indeed as an opportunity to take additional self space and gain share eventually. Mark Altschwager Best of luck. Operator Dana Telsey, Telsey Group. Dana Telsey Hi, good morning, everyone, and nice to see the progress. As you think of some of the gross margin drivers, particularly on the fact of the ability to better absorb the new manufacturing capacity added in September '23, where are we on that journey? When does it get fully absorbed? And when you talk about the sales price adjustments, Between clothes, toes, sandals, what are you doing in terms of pricing to continue to generate this solid gross margin?bThank you. Hi Dana, it's on the first part of your question with regards to better absorption and as initially mentioned, so we had expected about 50 basis points, tailwind to gross margin, for this full year. We're now seeing that materializing ahead of schedule, so we now think it will be 75 basis points for this fiscal year, and the overall effect for next year will be additional 75 basis points. So that will be clearly a driver for gross margin improvement. Got it. And then just on the retail store rollout, I think Nashville opened this past quarter. How are the new stores rolling out? Is the number of new store openings still the same around the world for your own stores and any learnings of closed toe versus sandals from the stores? Thank you. Mehdi Bouyakhf Hi Dana, this is Nico. I'm going to take this question. So as retail is a massive growth pillar for us, and we are very pleased to see that we are currently operating 77 stores. We added 6 stores in this quarter. We opened in less than a year Paris number 2, which is doing really well. We opened London number 3. We opened in Nashville and we opened also in Shanghai. It's worth mentioning that we don't need that long ramp up period for those stores. It takes a couple of weeks and then they are top 5, top 7, 8 or top 10 stores from a performance perspective. We remain very disciplined in choosing the right locations, so for us the locations are really mattering the most. So we really want to be sure that the financials are right, that the economics is right, and the location is. Also providing the best consumer experience. We said that we're going to come closer to 100 stores at the end of this fiscal year and closer to 150 stores at the end of 2027, and we are well on track with the store expansion around the new stores. I think it's worth mentioning why we open stores. The retail growth is not just driven by store expansion. We have a very solid and healthy comp growth in our longest standing stores. Operator Laurent Vasilescu, BNP Paribas. Vasilescu Laurent Oh good morning. Thank you very much. Good morning. Thank you very much for taking my question. Close to increased its mixed rate by 500 basis points in 18. Is that driven by the boss and as well as other closed to offering? Should we assume a similar rate increase of 500 basis points for the second half? And separately by my math, it looks like the sandal assortment grew low 10s in 2. Should we assume the sambo business grows low low double digits for FY 25, similar to last year? Thank you. Mehdi Bouyakhf Hi this is Nico. Thank you for your question. I'm going to take it. So close, as you just mentioned, continues to outpace the open toe by this quarter by 2x, and it's worth mentioning why this is an outpacing of our open to open to business growth double digit. We are really pleased to see that this is not only driven by Boston. Boston continues to show a very strong performance while all non-Boston clos are growing at the same pace, so we are really diversifying our clos business and they can also offer some pressure off the Boston. When it comes to laced up shoes like really shoe shoes, this category delivered another record quarter, significantly outgrowing our clocks business. So again, we are diversifying our closed to business beyond Boston and beyond clocks. In EBITDA, just to reference one thing from EBITDA, it is already the second biggest category in our online channel. 7 out of the top 20 are laced up shoes, and that all again while sandals are growing double you very much. Operator Paul Lejuez, Citi. Paul Lejuez Hi, this is Kelly on for Paul. Thanks for taking our question. Just want to follow up on some of the gross margin puts and takes. I think last quarter you said gross margin would approach 60% this year, I guess with the the raise in the pasta, ramp contribution, but maybe some FX I was just. Curious if you're sort of reiterating that side if you're you know raising it so any any color there and then just secondly on the pricing strategy you took around the price increases in the second quarter is that to offset the tariffs or should we expect more from here and just any regional color on where and where those price increases are focused? Thank you. Thank you for your question. So on gross margin, there will be two drivers. We will have and we will see better absorption in our facility in avar. This is the one factor driving that, which is 50 basis points in Q2. But also we experienced favorable ethics and pricing effects net of inflation, which also contributed to the increase of 1 to 150 140 basis points in Q2, generally on pricing and as mentioned we're taking a global approach here as we have done in the past, frankly, so every season we are reviewing prices on a style by style basis. We are very surgical when it comes to pricing, however, always maintaining a global, globally aligned pricing architecture. Thank you. Operator Jay Sole, UBS. Jay Sole Great, thank you so much. Just a question. How are you thinking about cash flow and cash flow uses, in the back half of the year and then as you get into the year, obviously the company has a lot of cash in the balance sheet. What, how do you feel about the plans for that cash? Thank you. We've always said that our first priority for the use of cash is to invest in the business and especially in the white space opportunities that we have identified and all already touched on it, so we expect to invest about 80 millionuro in CapEx for this year. And that will continue in future years. So this quarter we invested $21 million and this is predominantly in in our production facilities in Gerlitz, AR, but also in Aruka, and also to support our retail expansion. We've also said that we would like to continue to reduce our debts and we will continue to do that. And we are fortunate that even after these two priorities we have additional optionality and discretionary cash available as such we are always evaluating the options for the use of cash and of course including the possibility of share repurchases. Okay, thank you so much. Operator Lorraine Hutchinson, Bank of America. Lorraine Hutchinson Thank you. Good morning. You've called out a trend over the past few quarters of a younger customer trending more toward in-person shopping. Have you seen that, build continue, and is that a global phenomenon or more focused on North America? David Kahan Yeah, hi, it's David. Certainly the phenomenon seems to be global. I just think that youth tend to shop more live, and I also think that our brand, because of the tactile shopping experience of coming into contact with Birkenstock, especially for new consumers, the first time, it's a very real experience in our own retail, and I think that's going to continue. Operator Sam Poser, Williams Trading. Sam Poser Thank you for taking my questions. I, I'm wondering, on the demand side and the, in the back half of the year, if, once the impact of the tariff kicks in on other things, are you? How much of it from a demand perspective have you may you have tempered your outlook, from a unit perspective or something, given that and Since you run like, I, what percentage your scarcity of the demand right now and will, and is that what gives you the comfort that you're scarce enough that it won't impact the sales, or are you going to say that you're running at 75% of the demand? Is that going to just leak up to 80%, but you'll still be scarce and that's why you're not concerned with the top line. David Kahan Sam, hey, it's David. Great question. As we always manage with what we call relative scarcity. It would be a little hard to say what we think the percentage of relative scarcity is. Having said that, based on the demand, based on the momentum, we find that Every time our sales increase and we put a little bit more stock into the market, we see the top line demand continue to increase. So I think we're not being cavalier about the fact that consumers might be a little pinched in the wallet, but we see this shift. To the products and the brands that are most in demand, so we don't see any impact to the demand we currently see, and I think that's a strong statement that we're not going to ever compromise that balance of stock to sales in the marketplaces around the world. Sam Poser Thanks. And then Evia, can you just break out, can you give us just some like general thoughts on what the gross margin for the full year is going to be and, how you're thinking about SGNA in total? For the full year. Yes, sure, speaking, so on gross margin, as I mentioned, the key driver will be the additional absorption that we are seeing also pricing net of inflationary effects, and this will drive the increased gross margin. So we said that we will be moving closer to the 60%. Gross margin target and this is what we are reiterating on the SGNA side. So we are going to continuously invest in infrastructure in IT, and as such we want to have less space here to continue and to make the organization future proof to cope with the growth that we are experiencing and the demand that we are seeing outside and also be aware in terms of. Selling and distribution expenses that we are continuing to invest in retail and this is certainly also driving additional selling and distribution expenses. I guess just real. Sam Poser Quick, I mean, you, for the first half of the year, you grew your -- Megan Kulick It's Megan. That's three questions. We're going to have to move on. I'm sorry. Sam Poser Goodbye. Operator Michael Binetti, Evercore. Michael Binetti Thanks guys for taking our question. This is Jasline on behalf of Michael. Congrats on a good set of results. Maybe just a little bit on the other markets. Oliver caught out white face in APEC growth and, China more than double in the quarter, maybe talk about the op opportunity there and what is the long-term stock growth plan for the region. And on email, there was a little bit of slowdown second quarter, so how should we think about second half growth, any color that will be helpful. Thank you. Mehdi Bouyakhf Jocelyn, this is. I'm going to touch on the question. So in EA let me share that Q2 this year is built on a very strong quarter in last year. We did some land grab in B2B last year and simultaneously we had a very strong BTC performance. We saw across our countries a broad-based growth, specifically in our DPC channel which grew 1.5x faster than our B2B channel, and our overall alter rate as strategic wholesale partners is very healthy and we have a very healthy inventory to sales ratio as we integrated Middle East and Africa together with Europe into one EEA segment. And we took the opportunity to visit the Middle East and Africa markets and have started to take some right-sizing actions of the business, specifically in the North African business with our distributors. These actions will ensure a focused and also high quality growth in the future, so we're really protecting the quality of our distribution there. And then let me also share that Q2 is really the highest B2B shipping quarter, so you really faced with a full order book you just sometimes face operational limitations in getting the product out across the quarter. That's a bit of more color for me. Klaus Baumann Klaus talking about the APEC region. So we had another very strong season in APEC. B2C was strongly outpacing the B2B part. We are seeing a very strong increase in our traffic, not only online, also in the stores, and by keeping our conversion rate. So there's a very positive feedback coming also on the sellout on our new stores. Same on the like for like business. We've seen a double digit growth in the comparable stores and in the product sellouts and development we see similarities to the other markets. We are selling more high priced products and getting all our ICA products also running. Same for the glo to shoe business also slowly growing in the APEC region, so we are very confident for what is coming. Michael Binetti Got it thanks. Operator Edward Apfel, Morgan Stanley. Edward Apfel Yeah, hi guys. If you can just a clarification, are we right in in thinking that most of the inventory you're going to be selling in the US in fiscal '25 was kind of shipped before. The tariffs, announcement and therefore, the tariffs news and also the effects from a transactional standpoint should have kind of little impact on your fiscal '25. So just wanted to have some clarification and kind of related to that. Can you just give us a hypothetical growth? I know you have mitigating factor, but can you give us a growth impact on the effects? So let's say, the US depreciates 10% versus the EUR. What, what's kind of the impact on your bi hypothetically. Thank you so much. Speaking to your first question on on the inventory, so we have a strong inventory position not only in the US but also globally and certainly this inventory position in the US is helping us to fully offset the 2025 adverse. Effects from increased tariffs. Edward Apfel So we should, if you guess so we should understand it's mostly an FX FY26 event rather than FY25 event basically in terms of impact. Alexandre Arnault Hey, this is Alexandre speaking. Yeah, well, there's always some fluctuation in currency. We also commented on that earlier. Clearly we saw some tailwind in the first half of the year with the current FX rate, we see a little bit of head for the remainder of the year if the FX rate stays where it is. Simulating this with the current rate, we will, at a full year be exactly on '24 rates, so this shouldn't be at the full year, an impact to us and to simulate it a little bit so. Year approximately $0.05 change in the US dollar exchange rate will give you $37 million of revenue impact and $26 million of EBITDA impact. This should be a good math to model out. Edward Apfel Okay, understood. Operator Anna Andrea, Piper Sandler. Anna Andrea Great, thank you so much. Good morning, and let me add my congrats as well. You mentioned a strong trends in the business and to you being seasonally the slowest growth quarter, just giving the sandals. Just curious, any additional color you could share on what you're seeing in April and in May? Curious how the clothes show is performing and are you seeing any signs of full forward in demand ahead of the traffic tariffs rather in the. Megan Kulick US? David Kahan We see no change in demand and sell through results, through the quarter that we're referencing. We also, whether or not there's, Requests for pull forward, we manage that ourselves, so we make the decisions and right now the flow of inventory is always managed by us relative to stock to sales ratios. So we don't do anything from an inventory standpoint in shipments based on anything that has to do with any tariff impact whatsoever. Megan Kulick Anna, it's Megan. Can you just repeat the first part of your question? I think you said we said the 2nd quarter is the slowest quarter, and that's not what we said. We said that our fiscal 3rd quarter seasonally is our slowest growth quarter because it's the highest mix of sandals, and closed toe grows at 2x the rate of sandals. Anna Andrea Right, just any additional color, on what you're seeing in the demand and, just curious, any additional, kind of a categories of franchises that you guys could call up. Megan Kulick Well, I mean, the sandals business continues to grow very nicely at double digits. I think, we're not seeing any slowdown there. It's really just close to grows faster. Anna Andrea Fair enough. Well, thanks so much and best of. Operator Janine Stichter, BTIG. Janine Stichter Hi, thanks for taking my question. So nice to see the GTC improvement. I think you mentioned some investments in online or or e-commerce initiatives. I was hoping you could elaborate on that and then maybe just share how you're thinking about investments in that channel for the rest of the year. Thank you. David Kahan Yeah, thanks, Jeanine. D2C, the biggest growth has come from our membership base, as Oliver said in the opening comments, our membership base, we like to call it a fan base, is over 10 million right now. That's up 25% versus a year ago. And as we market more specifically to that database, to our fan base, the average. A purchase is 20% higher. So when you look at allocation of dollars against against the D2C space, it's more lasered rather than shotgun. So the return on investment is higher there. We're very happy with the growth in our membership, and we think this is just going to continue. And again, the return on investment from those members is significant. Thank you. Operator [Irwin Rammborg], HSBC. Irwin Rammborg Hi, thanks a lot for taking my question and congratulations. It's pretty rare to see consumer companies increasing guidance. Maybe a bit of a philosophical question for Oliver. At the time of the IPO, there was this rule of 2,060, 30, so 20% top line growth, 60% gross margin, 30% margin. I'm wondering how you think about the arbitrage between margin and sales. You did reference during the IPO process, Hermes, for example, which is a company that refuses to increase its margin. Because every time they have excess, contribution, they reinvest everything to continue to feed the top line and and brand desirability, brand equity. You're sort of above the 30% margin today, and I'm wondering if there would be a possibility to reinvest some of that to, Grow at a faster pace. I don't know if it's possible actually to grow at a faster pace, but theoretically Asia growing at 50%, not at 30%, or you reinvesting quite a bit to move closer to that 20%, 60%, 30%. And maybe related to that, your margins at a higher level than expected this year, is that sustainable or are there reasons to believe that, There is a particular boost for the current fiscal year that will be non-recurring in the in the outer years. Thank you. Thank you for your question. Be assured I try to manage the margin down as good as possible, so I don't want to have on your side, that you will start crying because we're delivering, I don't know, 34%, 35%. No, the jokes aside, we prepare ourselves, as I said, because we as a team and as a company, we see this whole situation as a big opportunity for us. So, I fully with you, that there will be on the way. Second half of the year, but also some time within '26, 6, there will be opportunities for us to develop quicker and on retail to grab some shelf space to do land grabs wherever other brands are collapsing or fading away, so. Be assured we are ready, we're prepared for this, and that's, why we always keep some powder dry to move on quick and to have enough ammunition to develop the brand quicker and with more focus on quality and quality for us means not only growth, it also means margin in the cross profit margin and ADR margin, of course. One comment, allow me one comment to your question about Asia and the APEC region. It is wiser from my perspective and from our perspective to keep the speed as it is. We decided to roughly grow the double speed compared to the rest of the world within the APEC region. It seems like this is exactly the right tuning and the right setup to move on, yes, with, seeing partners and possibilities to be quicker. But honestly, Creating more unique growth in this region, creating more logistic issues in this region. We need to prepare our whole organization. Keep in mind we are fully vertically integrated supply chain, so we have to organize by ourselves. And if you speed up your organization and your growth, then you have to make sure that your company is catching up with all this. And it's not easy to organize everything simultaneously, so I think we feel pretty good with our growth algorithm for the APEC region and again. We are ready to take over shelf space. We are ready to take over, own retail spaces much more aggressive like in the past, and we believe that there will be a lot of opportunity out there. Thank you. Thanks a lot. Very useful. And maybe just on the second part around, the margin being higher than expected this year, is that sustainable into the outer year? Megan Kulick Hi, it's Megan. We do not see anything that's one off this year that, would go away next year. In fact, we do expect some gross margin tailwind again further next year given the absorption, the additional absorption of the Pale box facility. Okay, super useful. Thank you so much. Best of luck. Operator Sharon Zacha , William Blair. Sharon. Adrien Duverger Hi, yeah, thanks for taking the question. I was hoping you could comment on follow up on the comments on membership in the US and kind of how that's trending now as a percent of your DTC sales. And if you do see signups as well in the 10 stores that you have in the US and the membership program and as a corollary to that, how the membership is also faring in Europe. Thank you. David Kahan Membership, this is David Shanks Sharon. Membership is growing in in the Europe region and in the and in the Americas. We will be fully omni capable very soon to do sign ups in stores. It's less about the sign ups. And you know getting the information in your database, it's more about how you do personalization and segmentation and how you speak to these these customers, these brand fans, and how you engage with them. That's where the real long term benefit is and that's where I think we're seeing. Some of the continued momentum and growing momentum in our direct to consumer business. Again, 25% more than a year ago and the members spend on average 20% more. So that would tell you that any investment that we make from a technology standpoint, from a resource standpoint and focusing there will give us a very strong return on investment. Operator Adrien Duverger, Goldman Sachs. Adrien Duverger Hey, thank you for taking my questions. So the question would be on the opportunity that you see from price mix, particularly with new products coming in the second half of 25, and a follow up on this would be that within each of your product categories in both open and close to shoes, you see a difference in the performance between the different price points of the products as any difference from your low end and high end products. Thank you very much. Mehdi Bouyakhf Hey, this is Nico. Thank you for your question. What we can generally see, I think we stated that also earlier, is the consumers voting for higher price points within our categories. So what you see is that the leather share has been increasing constantly, also in the leather share increased. Our close door business outpaced our sandals business. So again typically higher price points and within the closed door business you also see consumers voting much more for laced up shoes than they did a couple of quarters back. So again, high priced executions within closed door are also trending with our consumers. If it comes to a sandal business specifically, what we definitely see is again consumers coming in and buying much stronger premium embellishments so rivet executions, slower executions, all these executions. We are doing pretty well with our consumers many times in our online sold out very quickly, so we are also fast replenishing on those executions. So generally you can see across the business across the categories we definitely have a primerization of the business. Operator Peter McGoldrick, Stifel. Peter McGoldrick Hey thanks for this will be the last question sorry. Can you talk about the scaling wholesaleop opportunity? You call that progress in youth sporting goods, outdoor and department stores. Can you help us think about the forward opportunity for increasing channel representation? David Kahan This is David. Thanks for the question. There's limited expansion of our footprint other than current doors. It's very surgical and very strategic, so the vast majority of the growth, over 90%, comes from existing retail accounts. It's more expansion of the assortments. Mehdi Bouyakhf And in a just to add a bit more color from our perspective, so there is quite a substantial number of doors and partners that are not yet penetrated and for a reason. So we are quite, we have a very close eye on the quality of the partners. We always give the example of Foot Locker in Europe. We don't serve them. We don't deliver to them because we don't think that they are currently adding something to a B2B portfolio, so there are more partners in sport and outdoor also in lifestyle segment that we have a close eye on and that we decide to service when we believe is the right moment. And yeah, I just want I just want to add one thing because I mean you've seen probably our new product categories and different usage occasions. So yes, on the mid to long term, of course we will add new chains and new doors and new channels because of simply the fact that we will then developing a professional segment, an orthopedic segment. Shoes for the for outdoor single use outdoor also enclosed so so all this incremental usage occasions will definitely create also a broader and wider network of distribution. Thank you. Operator Thank you. And we are at the top of the hour and that does conclude today's Q&A session and it also concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Why Birkenstock's Shares Soared This Week
Birkenstock grew sales and adjusted earnings by 19% and 34% in Q2. Its newer closed-toe shoe category grew twice as fast as its more famous sandals group. Birketstock's vertical integration appears to be a powerful weapon amid the ongoing tariff turbulence. 10 stocks we like better than Birkenstock Plc › Shares of Birkenstock (NYSE: BIRK) -- famous for its contoured footbed sandals -- were up 11% this week as of 3:30 p.m. ET Thursday, according to data provided by S&P Global Market Intelligence. The vertically integrated footwear specialist reported second-quarter earnings on Thursday, delivering sales and adjusted earnings-per-share growth of 19% and 34%. Management also said that 2025 revenue growth should hit the high end of its 15% to 17% guidance, and it also increased its expectations for profitability. In almost every measure, Birkenstock had an excellent Q2 as the company: beat analysts' expectations and raised guidance improved its margin profile grew sales by double digits across all three of its geographic regions increased both business-to-business and direct-to-consumer sales by 19% saw its younger closed-toe shoe category grow sales twice as fast as its sandals avoided tariff concerns thanks to its vertical integration and manufacturing in Germany and Portugal Not only is Birkenstock largely unaffected by tariff concerns, but it could also be positioned to thrive amid the uncertainty. To this point, Chief Executive Officer Oliver Reichert explained, We will navigate these uncertain times from a position of strength. Our decades-long track record of managing our brand through a consistent engineered distribution strategy puts Birkenstock in an enviable position to take additional shelf space and gain share. Said another way, in a quarter where most footwear stocks scrambled to avoid tariffs and maintain profits, Birkenstock grew its profitability while experiencing double-digit unit-volume growth alongside a mid-single-digit increase in average selling price. Growing sales by 20% annually over the last decade and sporting a 21% free-cash-flow (FCF) margin, Birkenstock deserves a long look from investors at a reasonable 26 times FCF. Before you buy stock in Birkenstock Plc, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Birkenstock Plc wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $620,719!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,511!* Now, it's worth noting Stock Advisor's total average return is 959% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Why Birkenstock's Shares Soared This Week was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Birkenstock CEO Is Confident Tariffs Is Not A Disadvantage For The Brand
Birkenstock Holding plc (NYSE:BIRK) shares are trading higher on Thursday after the company reported the second-quarter FY25 results. Revenue grew 19% year over year (Y/Y) on a reported and 18% Y/Y on a constant currency basis to 574 million euros. Revenue growth was driven by double-digit unit growth and mid-single-digit growth in Average Selling Price (ASP). Adjusted EPS stood at 0.55 euro, up 34% Y/Y, in the quarter. In U.S. dollars, revenue of $603.62 million beat the street view of $567.17 million, and adjusted EPS of 58 cents exceeded the consensus of 54 company witnessed double-digit revenue growth across all segments, including 20% Y/Y in the Americas, 12% in EMEA, and 30% in APAC on a constant currency basis. DTC and B2B revenue grew 17% Y/Y and 18% Y/Y, respectively, on a constant currency basis. B2B revenue growth was led by strong Spring/Summer sell-in (sandals/closed-toe), and DTC revenue growth was aided by digital and strong retail. The gross profit margin reached 57.7%, an increase of 140 basis points from the 56.3% reported in the second quarter of 2024. This improvement was driven by adjustments to sales prices, better utilization of the new manufacturing capacity that came online in September 2023, and a positive impact from currency translation. Adjusted EBITDA rose 23% Y/Y to 200 million euros, with an adjusted EBITDA margin of 34.8%, which was up 110 basis points Y/Y. Operating cash outflow rose to 18 million euros in the quarter. As of March 31, 2025, Birkenstock had cash and cash equivalents of 235 million euros. FY25 Outlook: The company now expects FY25 revenue growth to be at the upper end of its prior guidance of 15% to 17% in constant currency and raised adjusted EBITDA margin by 50 basis points to 31.3% to 31.8%. Oliver Reichert, CEO and Member of the Board of Directors said, 'We expect that the tariff situation may create a unique shift in consumer behavior in the footwear category with a split between the few brands, like BIRKENSTOCK, who manage strong brand equity through relative scarcity and those who distribute their products with less discipline and pricing integrity. We will navigate these uncertain times from a position of strength.' Investors can gain exposure to the stock via Renaissance IPO ETF (NYSE:IPO). Price Action: BIRK shares are up 6.04% to $57.78 at the last check on Thursday. Image by Josh Forden via Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article Birkenstock CEO Is Confident Tariffs Is Not A Disadvantage For The Brand originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
Yahoo
15-05-2025
- Business
- Yahoo
Birkenstock Stock Soars on Strong Results, Outlook
Birkenstock Holdings topped fiscal second-quarter earnings and revenue forecasts as sales increased in all its markets. The Germany-based maker of fashion footwear saw strong demand in the Americas and got a boost from new store openings in the Asia-Pacific region. Birkenstock said its business model gives it an advantage over rivals with new tariffs of Birkenstock Holdings (BIRK) surged more than 5% Thursday as the fashion footwear manufacturer posted better-than-expected results and raised its guidance as sales were up in all its markets, and it sees an advantage over rivals in the new tariff environment. The Germany-based sandals maker reported fiscal second-quarter adjusted earnings per share of 0.55 euros ($0.62) on revenue that rose 19% year-over-year to 574.3 million euros ($643.3 million). Analysts surveyed by Visible Alpha expected EUR0.53 and EUR566.3 million, respectively. Sales in the Americas increased 23% to EUR312.5 million as both business-to-business (B2B) and direct-to-consumer (DTC) sales grew by "a strong double-digit pace." They climbed 12% to EUR212.8 million in Europe, Middle East, and Africa on digital and retail demand. In the Asia-Pacific region, sales jumped 30% to EUR47.8 million as it opened new stores. CEO Oliver Reichert said that "the tariff situation may create a unique shift in consumer behavior in the footwear category with a split between the few brands, like Birkenstock, who manage strong brand equity through relative scarcity and those who distribute their products with less discipline and pricing integrity." The company raised its full-year adjusted EBITDA margin outlook to 31.3% to 31.8%, up from its previous estimate of 30.8% to 31.3%. It explained that translated into an adjusted EBITDA range of EUR660 million to EUR670 million, 19% to 21% higher than in fiscal 2024. The news sent Birkenstock Holding shares into positive territory for the year. Read the original article on Investopedia
