Birkenstock Results Beat on Resilient Demand, Forecasts Margin Recovery

A Birkenstock shoe is displayed at Birkenstock shoe store in London, Britain, October 11, 2023. (Reuters)
A Birkenstock shoe is displayed at Birkenstock shoe store in London, Britain, October 11, 2023. (Reuters)
TT

Birkenstock Results Beat on Resilient Demand, Forecasts Margin Recovery

A Birkenstock shoe is displayed at Birkenstock shoe store in London, Britain, October 11, 2023. (Reuters)
A Birkenstock shoe is displayed at Birkenstock shoe store in London, Britain, October 11, 2023. (Reuters)

Birkenstock beat market expectations for fourth-quarter results on robust demand for its pricey footwear and forecast a recovery in margins in fiscal 2025, sending the company's shares up 7% on Wednesday.

With fresh styles becoming a priority for consumers, Birkenstock's sandals and closed-toe clogs have drawn new customers both at its own stores and at retailers.

The company bypassed steep discounting trends evident during the holiday shopping season, which Birkenstock executives said was off to a strong start globally.

"The expansion of ranges into more closed-toe silhouette has helped boost revenue, given that they offer multi-season wear," Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.

Germany-based Birkenstock's average selling prices across its product range were up 8% in fiscal 2024, in part due to higher sales of clogs, the company said, adding that closed-toe styles now made up about a third of its business.

The company has invested in expanding its global store presence and increasing manufacturing capacity this year to meet demand.

While it led to a 330-basis point drop in gross margins in fiscal 2024, Birkenstock forecast a recovery in margins in fiscal 2025 as it ramps up production from new facilities.

The company reported fourth-quarter revenue of 455.8 million euros ($478.27 million), compared with the average analyst estimate of 439.2 million euros, according to data compiled by LSEG.

However, Birkenstock's forecast for fiscal 2025 revenue to increase between 15% and 17% was below estimates of 17.5% growth.

"It would appear with this incredibly healthy growth, the company is choosing to adopt a conservative approach that they expect to be able to meet and beat," BMO Capital Markets analyst Simeon Siegel said.

On an adjusted basis, Birkenstock earned 0.29 euro per share, beating estimates of 0.26 euro.



Dolce&Gabbana Unveils Luxury Boutique, Café at Bujairi Terrace in Saudi Arabia’s Diriyah

The brand center, one of Dolce&Gabbana’s largest worldwide, seamlessly blends Italian elegance with traditional Najdi architectural heritage. SPA
The brand center, one of Dolce&Gabbana’s largest worldwide, seamlessly blends Italian elegance with traditional Najdi architectural heritage. SPA
TT

Dolce&Gabbana Unveils Luxury Boutique, Café at Bujairi Terrace in Saudi Arabia’s Diriyah

The brand center, one of Dolce&Gabbana’s largest worldwide, seamlessly blends Italian elegance with traditional Najdi architectural heritage. SPA
The brand center, one of Dolce&Gabbana’s largest worldwide, seamlessly blends Italian elegance with traditional Najdi architectural heritage. SPA

Dolce&Gabbana, the Italian luxury fashion brand, opened a new 1,500-square-meter luxury center in Saudi Arabia’s Diriyah, The City of Earth, featuring a boutique and café, DG Caffè. The brand center, one of Dolce&Gabbana’s largest worldwide, seamlessly blends Italian elegance with traditional Najdi architectural heritage, enhancing the vibrant atmosphere of Bujairi Terrace—Diriyah's premier fine dining destination and a centerpiece of Diriyah Company's urban development project.

Dolce&Gabbana collections—including clothing, accessories, fine jewelry, watches, beauty, and home decor--are showcased on bespoke displays framed by a dynamic ceiling system that amplifies the sense of space. The boutique features an exclusive Abaya section, showcasing Dolce&Gabbana's dedication to honoring and celebrating local cultural traditions.

Drawing inspiration from Italy’s rich culinary tradition, DG Caffè at the heart of the boutique features a carefully curated menu tailored to Saudi tastes.

"We are excited to unveil Dolce&Gabbana's new boutique and café that will add an additional touch of luxury to the vibrant setting of Bujairi Terrace, our premier dining and retail destination,” said Diriyah Company group chief executive Jerry Inzerillo.

“As we progress on our journey to create the world’s greatest gathering place and a center point of cultural tourism—one that will feature more than 1,000 retail outlets and dining concepts spanning 566,000 square meters—we invite global business partners to join us on this remarkable journey," Inzerillo said.

Since its opening, Bujairi Terrace and the UNESCO World Heritage Site of At-Turaif have welcomed over 2 million visits, with tourists and locals alike drawn to world-class cultural, dining, and retail experiences in a historic setting.

Diriyah is a city within a city and a premier live-work-play destination that will be home for over 100,000 residents. Under transformation by Diriyah Company, Diriyah is projected to attract 50 million annual visits by 2030, driven by its world-class living, retail, hospitality, and cultural offering that will serve as a benchmark for future retail and lifestyle development.