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Birkenstock Prices Secondary Offering at $54; L Catterton's Stake Reduced

Quiver Editor

Birkenstock (BIRK), the iconic German sandal maker, has priced a $756 million secondary offering at $54 per share by an entity affiliated with U.S. private equity firm L Catterton. The offering aims to reduce L Catterton's stake in Birkenstock to 73.2% from 81.1%. Birkenstock will not receive any proceeds from this sale, according to the company's statement on Wednesday. This development follows Birkenstock's recent decision to raise its annual revenue and core profit forecasts, driven by robust demand for its cork-based sandals and newer closed-toe styles.

Birkenstock's optimistic financial outlook has been bolstered by full-price selling and the continued popularity of its products, especially in its own stores. The company has seen significant growth in its direct-to-consumer (DTC) revenue, which increased by more than 30% in the second quarter, while wholesale revenue rose by 19.2%. This success is attributed to the strategic expansion of its retail operations and the sustained demand for its sandals, which have become a fashion staple.

Market Overview:
  • Birkenstock prices secondary offering by L Catter & Catterton at $54 per share.
  • The offering aims to reduce L Catterton’s stake in Birkenstock.
  • Birkenstock does not receive proceeds from the sale.
Key Points:
  • Birkenstock raised its annual revenue and core profit forecasts.
  • Significant growth in DTC revenue and continued demand for sandals.
  • The company’s strategic retail expansion boosts financial performance.
Looking Ahead:
  • Monitoring the impact of the secondary offering on Birkenstock’s market performance.
  • Evaluating the effectiveness of Birkenstock's DTC expansion.
  • Anticipating further financial updates and adjustments from Birkenstock.

In May, Birkenstock raised its annual revenue forecast to between 1.77 billion euros and 1.78 billion euros, up from the previous range of 1.74 billion euros to 1.76 billion euros. The company also revised its annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast to between 535 million euros and 545 million euros, from the earlier estimate of 520 million euros to 530 million euros. Despite these positive projections, the company reported a decline in its quarterly adjusted EBITDA margin, down 470 basis points to 33.7%, due to global expansion and production investments.

Birkenstock’s second-quarter revenue surged by 21.6% to 481.2 million euros, exceeding LSEG estimates of 466.1 million euros. The adjusted profit per share stood at 0.41 euros, surpassing the expected 0.36 euros. The company’s ability to maintain demand and expand its retail footprint has positioned it favorably in the market. Investors are keenly observing Birkenstock’s strategic shift towards direct-to-consumer sales, which could potentially reduce business volatility and strengthen brand control.

About the Author

David Love is an editor at Quiver Quantitative, with a focus on global markets and breaking news. Prior to joining Quiver, David was the CEO of Winter Haven Capital.

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