Birkenstock (BIRKEN 29s; NR/B+ Pos/BB Pos (now)) 3Q24 Earnings Call

We were looking for commentary around new products but it was limited to same as presser "Yeah. On the product side, the new product introductions have been really, really encouraging across all categories. So don't lose sight." before it reverted back to sandal talk.

As an aside a strange observation from mgmt; "Younger consumers prefer to shop in-store, a trend we are seeing more and more."

Seems to be a less extreme version of Burberry's now let-go CEO refusing to disclose online sales as a % of total as he spent money on store refurbishments. In this case it seems Birkenstock is keen to grow its store footprint, margin miss in part was on new store costs and statements like above might be to buffer that. It goes on later to add; "Our brand benefits from in-person shopping. The footbed needs to be seen and touched and this is how we create new fans."

Unlike then Burberry CEO, we don't have ES(G) concerns with Birk - deleveraging is going to plan (net 2x by YE), it goes as far as saying it wants to be debt free, capex it is guiding to being below €100m this year (kept a lid on despite sales growth), and strong performance means it is not attempting to prop-up the stock with equity pay-outs (no divvy's or buybacks since IPO).

We'd ignore equity vol - as we said trades well above peers on forward P/E bar Hermes who has also seen impressive headline growth and runs a market leading 40-handle (!) EBIT margin (ultra-lux). Some concern from equities is the unch FY guidance which implies a slight slowdown to ~14% growth in Q4 - a somewhat high bar to be disappointed by. Mgmt comments were very positive on 4Q including; "we see demand continuing to escalate".

Numbers from earlier