Birkenstock warned its annual earnings will face pressure as it focuses on global expansion, disappointing investors in its first results since IPOing and causing shares to drop by as much as 14%.
Executives at the sandal maker revealed plans to increase prices on its products this year, acknowledging they had "underestimated the inflation effects" in fiscal 2023.
For 2024, Birkenstock anticipates an underlying earnings margin of approximately 30%, down 2.4 percentage points from 2023, citing a "modest headwind" from investment-related costs.
Jason Benowitz, a senior portfolio manager at CI Roosevelt, commented: "The company is guiding to... a hurdle with respect to taking profitability down more than expected next year.
"These results were just not strong enough to sort of justify the current premium that was in the shares."
Despite a weak market debut in October, the stock ended about 19% higher in 2023.
Swetha Ramachandran, manager of a global consumer brands portfolio at Artemis Fund Managers in London, said: "The IPO price had already baked in a lot in terms of future upside, and until we see the company deliver as well as exceed those expectations, it's hard to see the share price move further."
However, Birkenstock projected 2024 revenue to range between €1.74 billion and €1.76 billion, surpassing analysts' expectations of €1.72 billion.
Demand for Birkenstock's footwear, retailing for as much as US$350 a pair, has proven resilient, and the company has benefitted from increased sales through its website and stores.
While unit growth reached 6% in 2023 and the average selling price rose by 14% since fiscal 2022, quarterly revenue surpassed expectations.
Birkenstock shares are flat in pre-market trading, having closed over 7% lower at around US$46 on Thursday.