(Reuters) -Birkenstock raised its annual revenue and core profit forecasts on Thursday, as the German sandal maker bets on full-price selling and strong demand for its cork-based sandals and newer closed-toe shoes, sending its shares up 6% premarket.
Most wholesale retailers are still stocking up on in-demand products like Birkenstock despite a wider effort to cut back on inventory as demand for discretionary items remains under pressure.
Analysts expect easing inflation, mainly in the United States, to spur demand for Birkenstock’s high-end footwear as customers become more willing to spend.
Demand for the company’s products also got a boost from Margot Robbie donning a pair of pink Birkenstocks in the movie “Barbie” last year.
The company now expects fiscal 2024 revenue between 1.77 billion euros ($1.91 billion) and 1.78 billion euros, compared with its prior forecast of 1.74 billion euros to 1.76 billion euros.
Last quarter, Birkenstock noted a shift in consumer demand for its sandals and said a majority of its direct-to-consumer sales were through non-sandal products like sneakers, slippers and clogs.
It forecast annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between 535 million euros and 545 million euros, up from 520 million euros to 530 million euros expected earlier.
However, Birkenstock’s quarterly adjusted EBITDA margin was down 470 basis points to 33.7% due to pressures from its plans to expand globally and invest more in production.
The sandal maker’s second-quarter revenue rose 21.6% to 481.2 million euros, compared with analysts’ estimates of 466.1 million euros, according to LSEG data.
($1 = 0.9246 euros)
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Devika Syamnath)
