Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: The quarter was really strong. Why aren't you raising the guidance for the full year given the strong beat that you had in the first quarter? Also, can you address the strong B2B growth that you had? A: We are off to a great start in 2025, but Q1 is the smallest quarter of the year, comprising only 17% of the total annual revenue in '24. We still have over 80% of the year ahead, with macroeconomic uncertainties like interest rates, currency movements, and tariffs. Our B2B growth was driven by strong sell-through and a healthy stock-to-sales ratio. We expect more balanced growth between DTC and B2B as we accelerate our global retail store growth.
Q: As you looked at the opportunity to join Birkenstock, what excited you most? What do you see as the biggest challenge? A: The significant growth opportunities for Birkenstock over the next decade are very attractive. It's rare to find a company with a 250-year-old legacy that still has substantial growth ahead. The biggest challenge is ensuring that systems, infrastructure, and team scale in line with the business growth. However, Birkenstock has a strong foundation and resources to ensure proper investments are made.
Q: You delivered some nice EBITDA margin expansion in Q1. Could you talk us through the drivers here and the implications for the balance of the year? A: The biggest driver of the improvement in EBITDA margin was the shift in channels. Our B2B channel has a lower gross margin but a higher EBITDA margin compared to DTC. With stronger B2B growth in Q1, there was an impact on SG&A comparison year-over-year. We expect more balanced growth between channels for the full year, and we stick with our guidance of up to 50 basis points EBITDA margin expansion.
Q: Could you elaborate on key drivers of the revenue upside in the first quarter, particularly the direct-to-consumer acceleration? Have you seen any softening in demand momentum post-holiday? A: We don't see any softening at all. The brand demand is strong globally, with very strong order books and demand. The growth drivers in Q1 included broad-based demand across all regions, strong holiday and gifting season, and significant growth from white space opportunities like closed-toe shoes, which grew at twice the speed of overall growth.
Q: Can you provide more color on your loyalty program? How is it performing versus expectations? A: Our membership is very important, with over 8.8 million members, up 30% year-over-year. Marketing to our members has been successful, with almost 50% of our DTC business coming from members. Members tend to spend 30% more per transaction, and as our membership grows, it drives our DTC business. Our retail stores also become vehicles for membership growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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