On Wednesday, Stifel reiterated its Buy rating on shares of Birkenstock Holding plc (NYSE:BIRK) with a steadfast $63.00 price target. The firm's analysis highlighted the company's fourth fiscal quarter revenue and adjusted EBITDA, which surpassed expectations.
Birkenstock reported €455.8 million in revenue and €125 million in adjusted EBITDA, exceeding estimates by €28.1 million and €13.5 million respectively. With a market capitalization of $10.53 billion and impressive trailing twelve-month revenue growth of 19.77%, InvestingPro analysis suggests the stock is currently trading above its Fair Value, despite strong fundamentals.
The company's guidance for fiscal year 2025 suggests revenues ranging between €2.102 billion and €2.139 billion, with adjusted EBITDA between €648 million and €658 million. These projections place Birkenstock's revenue forecasts above those of both Stifel and the prevailing market consensus, while endorsing the consensus views on EBITDA.
According to InvestingPro data, the company maintains impressive gross profit margins of 60.16% and is expected to see continued net income growth this year. For deeper insights into Birkenstock's growth trajectory and 12+ additional ProTips, consider exploring InvestingPro's comprehensive analysis tools.
The fourth fiscal quarter saw a balanced revenue upside, with growth surpassing estimates across all regions. Business-to-business (B2B) sales grew by 26%, which was significantly higher than Stifel's 15% growth prediction.
Direct-to-consumer (DTC) sales also outperformed, registering an 18% increase compared to Stifel's forecast of 13.7%. Notably, DTC growth accelerated quarter-over-quarter from a previous increase of 14% in the third fiscal quarter.
Birkenstock's closed-toe footwear has seen rising penetration, now representing approximately one-third of sales as opposed to just over 25% in the prior quarter. This indicates the company's ongoing efforts to diversify its product line.
However, gross margins fell short of expectations at 59.0%, compared to Stifel's estimate of 60.4%, affected by foreign exchange rates and channel mix. Despite this, the company managed to keep inventories tight, showing a 5% year-over-year increase against a 22% revenue growth.
Moreover, Birkenstock improved its net debt to EBITDA ratio, bringing it down to 1.5x from 3.1x a year ago. InvestingPro metrics confirm the company's solid financial position, with a healthy current ratio of 2.91 and moderate debt levels. Discover more detailed financial health metrics and access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In summary, Stifel views Birkenstock's fourth fiscal quarter performance and fiscal year 2025 outlook as solid and anticipates further details to be disclosed in the upcoming earnings call.
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