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Birkenstock may have taken a hit on Wall Street on Thursday after narrowly missing third-quarter sales and earnings expectations, but the company’s leadership is not worried about the brand’s future.
“The results speak for themselves,” Oliver Reichert, chief executive officer of Birkenstock Group, told analysts on the company’s Q3 earnings call. “Consumers want to shop for Birkenstock, and we have the ability to interact with them wherever they’re searching for our brands.”
The CEO added that the company saw a “noticeable shift” to in-person shopping during the quarter with increased traffic at its owned stores and increased sell-through at its wholesale partners.
“Younger consumers prefer to shop in-store, a trend we are seeing more and more,” Reichert said. “12,400 wholesale doors [globally] are an important brand touch point for consumers with a limited but steadily growing fleet of 64 retail stores worldwide, we rely on our B2B business for its reach, predictability and margin strength. Simply, the B2B business of a ‘superbrand’ with Birkenstock decreases risk with a very, very healthy margin.”
Reichert added that while this younger consumer is digitally savvy, they still want to try the product in person. “We’re starting to see an emerging youth consumer, and don’t mistake this for a trend, this is quite different,” the CEO said. “It’s an emerging demographic that’s really embracing our brand. And while some of the styles have been around for 50 years, it’s new to them. And they’re obviously digitally savvy. But data shows that even if 80 percent of their purchase decisions have data at digital facilitation, they’re looking to shop largely in physical multi-brand environments.”
Still, growth in the brand’s D2C channel in Q3 was up in the high single digits, Reichert noted. “Our own store retail sales were up over 60 percent, driven by strong closed-toe and premium product sales,” he said. “With an owned retail fleet of currently 8 stores in the U.S., we view the 6,600 wholesale doors [in the U.S.] as a key asset in which we can connect with consumers.”
Revenue for the 250-year-old German footwear company increased 19 percent in the third quarter to 565 million euros, up from 473 million in the same time last year. Net income was 74.6 million euros, or 40 cents a share, for the quarter, up from 63.1 million euros, or 35 cents a share, in the year-earlier period. Analyst had expected revenues of 566 million euros, and earnings of 51 cents per share.