Strong pricing power and brand loyalty have helped companies such as Birkenstock that cater to wealthier consumers remain largely insulated from a wider pullback in U.S. discretionary spending affecting much of the apparel and footwear sector.
Demand for the company's high-end sandals and closed-toe shoes has remained resilient for the quarter, while its expanding direct-to-consumer (DTC) business and retail footprint helped drive growth across regions.
"Birkenstock's strong quarter shows that consumers continue to demonstrate a preference for premium brands, and are willing to pay extra for products they perceive to be high-quality," EMarketer analyst Rachel Wolff said.
Growth was supported by Birkenstock's expanding DTC business, with sales through its own stores and website rising 14% and accounting for nearly 39% of quarterly revenue.
Birkenstock said the Middle East conflict's impact was more contained than initially anticipated, estimating a hit of only high single-digit millions of euros in the second half versus an earlier forecast of 10 million to 12 million euros. "We were able to mitigate much of the pressure (from the Middle East conflict) through adjustments in the delivery routes and strength in the other parts of the region," CFO Ivica Krolo said on a post-earnings call.
Asia-Pacific sales increased 18% on a reported basis during the quarter, while the Americas grew 11% and EMEA rose 15%.
Third-quarter revenue rose 13% to 719.5 million euros ($829.1 million), beating analysts' average estimate of 713.4 million euros, according to data compiled by LSEG. Adjusted earnings per share came in at 0.74 euro, below estimates of 0.76 euro.
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