Birkenstock’s Stock Price (BIRK) Consolidates Ahead of Earnings

Birkenstock's stock (NYSE: BIRK) heads into the latest set of earnings with a bit of momentum building, trading at $50.33 per share, 2.5% up on the day. Despite this, the stock is stuck within a range, consolidating lower than where it began the year, looking for direction.

As the market awaits the company's earnings report, scheduled for release tomorrow, markets are weighing a complex narrative of strong revenue growth against potential margin pressures stemming from the company’s ambitious expansion strategies.

Analysts are looking for an earnings per share (EPS) of $0.60 for the current quarter, a substantial 22.45% increase compared to the same quarter last year. This optimistic forecast underscores the market's expectation that Birkenstock's strong sales momentum will continue. However, the company's past performance reveals a more nuanced picture.

While Birkenstock has consistently delivered impressive revenue growth, particularly in the U.S. and Asia, significant investments in new retail locations and manufacturing facilities have raised questions about the sustainability of its profitability.

In the previous quarter back in May, Birkenstock reported a 19% year-over-year revenue increase for the second quarter of fiscal 2025, driven by double-digit unit growth and modest increases in average selling prices. Adjusted EPS also rose by 34% to €0.55.

Consequently, the company raised its fiscal 2025 revenue growth forecast to the upper end of its previous guidance of 15% to 17% and increased its adjusted EBITDA margin projection. This positive news led to a flurry of analyst upgrades, with firms like Baird, Bank of America Securities, BMO Capital, and Stifel all raising their price targets.

Despite these bullish signals, Birkenstock's stock price trades lower on the year, down 12% YTD, highlighting concerns about the company's aggressive expansion plans, particularly in Asia. The launch of a dedicated e-commerce platform in South Korea and the planned opening of physical stores have undoubtedly contributed to increased spending.