Written by: Susannah Streeter | Hargreaves Lansdow
- Revenue growth came in at 18%, ahead of guidance.
- The Asia Pacific region was a stand-out performer in terms of growth with revenues up 30%.
- Gross profit margins also ticked up to an impressive 56.3% as increased selling prices and greater manufacturing capacity fed through.
- The company is expected to hit the high-end of growth targets of 15-17% for this financial year.
Birkenstock has been putting its best foot forward and stepping up a level among the fashion pack. The sandals might have their roots in comfort but continue to win over fans for their style credentials, helped by celebrity collaborations. Premier League footballer Reiss Nelson is the latest big name to jump into Birkenstocks, taking the creative reins of the launch of the brand’s utility pack, combining the sandal’s orthopaedic heritage with contemporary aesthetics. Birkenstock has moved on from its Barbie boost and has shown impressive resilience, despite consumer uncertainty, by growing sales around the world. The most impressive performance has come in the Asia Pacific region, which is no mean feat, given the economic headwinds. More manufacturing capacity has come online, and combined with a resistance to discounting, it’s helping push up margins to an enviable level.
Birkenstocks are continuing to be such a hot trend, shoppers are not baulking at price increases, with higher selling prices a draw not a hindrance. While the company notes the tariff situation, it believes it can turn it to its advantage. Given its scarcity strategy of promoting the brand’s exclusivity by restricting some ranges and resisting discounting, it can spark the FOMO effect on sales, with fans keen to snap up ranges, worried they’ll run out. So, Birkenstock is bullish about future trends, confident its celebrity tie-ups will keep its brands on the fashion pages. There is some lingering concern that, given how fickle fashion fans can be, shoe crazes will fade. But expansion into more orthopaedics, professional and outdoor segments should continue to offer resilience.