Birkenstock traded flat in the US premarket on Thursday as earnings slumped despite the sandal maker beating revenue guidance over the festive period.
Revenues jumped 26% year-on-year to €303 million, beating out Wall Street predictions of just over €288 million, largely a result of both higher prices and increased demand in the States.
However, earnings per share came in at €0.04, below analyst expectations of €0.09 as the group’s gross profit margin slipped 70 basis points to 61%.
Birkenstock said the fall in margins was caused by” unfavorable currency translation and the planned, temporary under-absorption from our ongoing capacity expansion.”
Despite the earnings per share miss, underlying profits (EBITDA) jumped 12% year-on-year to €81 million.
Oliver Reichert, the sandal retailer’s chief executive, emphasised that the slip in profits was temporary, noting that demand is outpacing supply in all of its regions, categories and channels.
“As previously communicated, our strategic investments into future growth are having a planned, temporary impact on our profitability,” Reichert said.
“However, in the medium-term, we are confident we will continue to deliver our objectives of a gross profit margin over 60% and an adjusted EBITDA margin in the low thirties percent.”