Birkenstock Raises Annual Forecasts on Strong Sales of High-Priced Footwear
The German footwear company reported a 13% increase in sales for the third quarter, driven by demand for its closed-toe shoes and sandals.
Birkenstock has increased its annual financial forecasts, citing robust sales of its higher-priced sandals and closed-toe shoes. The company announced that sales for the three months ending June 30 reached £614.5 million, a 13% rise that surpassed analyst expectations of £609 million.
This growth occurred despite a broader downturn in consumer spending in other sectors, influenced by global conflicts such as the situation in Iran. Birkenstock's profits also saw an increase, growing by 15% to £114.5 million during the same period.
The company, founded over 250 years ago by Johannes Birkenstock, noted a particular surge in demand for its closed-toe shoe styles. Celebrity endorsements have also contributed to the brand's popularity, with figures like Kendall Jenner and Katie Holmes reportedly seen wearing the £155 suede 'Boston' shoes. Birkenstock sandals also gained visibility through their inclusion in the 2023 film "Barbie."
Birkenstock reported sales growth across all major regions, with the Asia-Pacific market experiencing an 18% increase and the Europe, Middle East, and Africa region seeing a 15% rise.
In light of the strong third-quarter performance, Birkenstock has revised its annual revenue growth expectation upward to 15%, from its previous guidance of 13% to 15%. The company maintained its existing annual profit forecast, which projects earnings per share between €1.90 and €2.05.
Birkenstock CEO Oliver Reichert stated that the company performed "exceptionally well" in the third quarter, highlighting the brand's enduring strength. He added that the closed-toe shoe segment continues to expand, bolstered by new designs in clogs and shoes. Reichert also emphasized that this expansion is being achieved while maintaining strong profit margins and cash generation.