Birkenstock's Shares Tumble Following First Earnings Post-IPO

Birkenstock experienced a sharp drop in shares, almost by 10% on Thursday morning, following its earning report disclosure, the first since the company went public.

Initial Public Offering Aftermath

In a historical move, Birkenstock made its public debut on the New York Stock Exchange on October 11, 2023, with shares opening at $41 each. This notable event came about two and a half centuries after Johann Adam Birkenstock established the German cobbler company.

During the IPO, CEO Oliver Reichert expressed that while maintaining family ownership was ideal for the brand, internal disputes led to the 'second-best option' of public ownership, entrusting the brand's future to the shareholders.

Profit Warning and Investment Plans

The company's warning about anticipated challenges in 2024 took center stage in its earnings call, leading to the near 10% share price decline. Birkenstock reported a considerable quarterly loss amounting to approximately 28.3 million euros ($30.8 million). Despite this, they still maintained an adjusted EBITDA margin topping 30% for the previous fiscal year.

For the year 2024, the executives anticipate a 'modest headwind' for margin growth due to planned increases in spending, aimed at scaling the company's operations. This investment is expected to fuel revenues, which are projected to climb by 17% to 18%.

Birkenstock's expansive growth plans involve an investment of around 150 million euros in retail store development and enhancement of production capacities for 2024. CEO Reichert showed optimism despite macroeconomic concerns, projecting robust company growth fueled by strategic geographic and production expansions.

Last year's performance was heralded by Reichert as the most successful in company history, reinforcing confidence in the growth trajectory for 2024.

Shares, Earnings, IPO