Engage in exchange activities. - Birkenstock projects robust expansion.
Birkenstock, the sandal company, anticipates an impressive year ahead due to a flourishing second quarter. They forecast a potential 20% rise in revenue without considering currency conversions for the 2023/24 financial year (ending in October), previously aiming for an increase of 17-18%. According to the headquartered London-based Birkenstock Holding, this significant growth can be attributed to the existing products, occasionally curtailed only by fluctuating fashion trends.
In Q2, Birkenstock achieved a 22% sales increase, hitting approximately 481 million euros. The company witnessed remarkable progress in Asia. However, the gross margin took a hit due to production expansion and the subsequent temporary burden. Moreover, personnel costs were higher, as stated by the brand. Consequently, the earnings before interest, taxes, and depreciation didn't soar as much as the turnover, increasing by 7% to 162 million euros. The associated margin was 33.7%. The company expects the year-long margin to range between 30% and 30.5%.
After removing special factors, the profit skyrocketed by 45%, totaling 72 million euros. Previously, the result was dented by foreign exchange losses, stock-based compensation, and restructuring costs.
Birkenstock, based in Linz am Rhein in Rhineland-Palatinate, made its debut in New York in October. Since then, its share price has surpassed the initial IPO price of $46. The Birkenstock Holding is de facto situated in London, controlled by the investment company L Catterton, boasting 81% of the shares. L Catterton is a partner of the high-end designer conglomerate LVMH, founded by billionaire chairman Bernard Arnault.
retrieved on 11/18/2022 - blog.snbchf.com
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- Birkenstock's strong performance in the second quarter led to a significant increase in its turnover on the New York Stock Exchange, with the company's shares surpassing the initial IPO price of $46.
- Despite the positive trends in the industry, the production expansion and higher personnel costs in Germany impacted Birkenstock's earnings before interest, taxes, and depreciation, which grew by 7% during the full year.
- L Catterton, which controls a majority of Birkenstock Holding's shares and is a partner of the luxury conglomerate LVMH, based in Paris, saw the German footwear company's robust expansion in the Asian market, contributing to its overall growth.
- Industry experts predict that the textile industry in Rhineland-Palatinate, Germany, could face challenges due to increasing competition and production costs, which may affect local companies like Birkenstock.
- In response to the growing demand for sustainable and eco-friendly products, Birkenstock showcased its commitment to environmental responsibility by expanding its operations in London and promoting its products in key markets such as New York, reinforcing its position as a global brand in the fashion and industry sectors.
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