Shares of sandal company Birkenstock (BIRK 4.81%) jumped on Wednesday after the company reported its financial results for its fiscal fourth quarter of 2024, capping off a strong year of growth and profitability. As of 9:45 a.m. ET, Birkenstock stock was up 7% but it had been up as much as 12% earlier in the day.
One of the market’s oldest companies just keeps growing
Birkenstock had a great fiscal 2024. The fiscal year ended on Sept. 30 and during those 12 months, revenue jumped by 21% from its fiscal 2023. And its net profit made an even more impressive jump of 155%. It beat expectations on both the top and bottom lines.
Some outlets are reporting that Birkenstock’s guidance was below estimates from professional analysts. But the market appears to be shrugging that off today because the guidance is nevertheless relatively strong.
Birkenstock expects its fiscal 2025 revenue to grow by 15% to 17% — that’s not bad for a 250-year-old company that just grew revenue by 20% and 21% in the past two fiscal years. Moreover, its profitability is expected to continue improving thanks to new production facilities getting up and running.
What should investors do now?
If I were a shareholder of Birkenstock, I’d be content to keep holding — I don’t see any red flags with this business. But if I were looking to invest new money, I’m not sure I’d buy Birkenstock stock today. Among shoe stocks, there are some companies with better growth, others with higher profit margins, and some more that trade at more attractive valuations. Therefore, no matter which metric an investor prefers, it seems that there are better investment options.
That said, Birkenstock is performing well and continuing expansion in less mature markets. So it still could be worth throwing on a watch list for now.
Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
