Birkenstock Holding PLC (NYSE:BIRK) shares traded more than 12% lower in Thursday’s early deals after the designer clogs brand reported a disappointing third-quarter performance.
Key financials fell short of analyst expectations and margins reduced, by 220 basis points to 59.5%, with the German firm citing higher costs due to the cost of global expansion and increased production.
Revenue was up 19% year-over-year to €564.8 million, slightly below the forecasted €565.2 million which was slightly less than a consensus estimate of €565.2 million.
Net profit was reported at €75 million, up 14% year-over-year, and at €92 million on an adjusted basis. Earnings (EBITDA) came in at €186 million, which was a 15% improvement from last year.
Birkenstock maintained its annual sales and profit forecasts.
Meanwhile, its medium to long-term profitability goals foresee a gross profit margin of about 60% and an adjusted EBITDA margin over 30%.
Chief executive Oliver Reichert was bullish in his accompanying commentary.
“We achieved the highest quarterly revenue in our history, driven by unbreakable and growing demand across all segments, channels and categories.
“As a Superbrand we are gaining the attention of our key retail partners and their consumers, who are becoming increasingly selective and more intentional in their spending. They are also looking for more physical touch-points with the products.
“Our Q3 results demonstrate our ability to meet consumer demand and align with shopping patterns while maintaining our disciplined engineered distribution approach, which remains our guiding principle.”
In the markets, meanwhile, Birkenstock shares dropped $7.70 or 12.69% changing hands at $53 in premarket.