Our second holiday winner this season is Birkenstock (BIRK).

Birkenstock is a German shoe manufacturer that was founded 250 years ago. The company is best known for its distinct, suede-layered sandals and shoes that uniquely conform to wearers’ feet.

Birkenstock's iconic footwear, known for its comfort and timeless design, appeals to a broad audience, making it a popular holiday gift choice.

Fiscal 2024 Q4 Earnings --- stock rose 2.0% on December 18th

• Revenue up 16% YoY to $472.3 million (beat)
• EPS up 114% YoY to $0.30 (beat)
• Initiated fiscal 2025 constant currency revenue growth guidance of 15-17%

Company Updates

BIRK’s fast-growing direct-to-consumer (DTC) business accounted for 40% of Q4 sales. The company is drawing consumers to its 57 company-owned stores and websites by expanding into slippers, boots, socks, and foot care essentials.

Management expects that increased production capacity utilization in Germany and Portugal will drive gross profit margin expansion in FY25. It is also planning to stretch its global retail footprint into faster-growing consumer markets like China, Japan, and India.

A recently launched Virtual Try-On tool lets online shoppers virtually sample Birkenstock footwear by pointing their phone cameras at their feet, selecting styles and colors, and taking pictures to share with friends — indirectly promoting brand awareness.

Growing Web Traffic

Online traffic data shows Birkenstock’s digital presence is growing, with web visits up 6% YoY.

This puts its web growth in the middle of the road for leisure footwear companies, though in a much better position than one of its primary competitors Deckers, which owns the Ugg brand.

The company continues to gain brand recognition from both consumers and wholesalers as its DTC and B2B channels have seen highly profitable and balanced growth according to its executives.

Expanding Trends Birkenstock is expanding its product reach:

The average Birkenstock consumer owns over at least 3 pairs, representing a very strong brand loyalty. 60% of consumers learn about Birkenstock through word of mouth, also supporting a loyal consumer base.

This level of consumer penetration and strong brand awareness allows the company to focus on promoting its wide variety and expanding the reach its products from within.

Trend Watch: Clog-Mania

Birkenstock Clogs have become increasingly popular, hitting an all time peak this past Black Friday.

The company’s Arizona Sandals, with a cork based sole that molds to the foot providing an extra level of comfort, have been one of its best-selling products.

While the sandals remain an iconic product under the Birkenstock brand, the company’s Boston Clogs, featuring a similar cork-based screw, have become increasingly popular, directing a new wave of consumers to add the signature shoe to their closet.

Raving Customers

Takeaway

As shoppers look for practical yet stylish options for gifting, Birkenstock stands to benefit from strong brand recognition and demand for versatile, high-quality products.

With web traffic continuing to grow and sales riding the wave of its popular products as well as expanding sales across its wide range of products, the company is well positioned this holiday season.