Telsey Advisory Group analyst Dana Telsey reiterated the Outperform rating on Birkenstock Holding plc (NYSE:BIRK) with a price forecast of $70.

Yesterday, the company reported fourth-quarter fiscal 2024 results, with revenue growing 22% year over year on a reported and constant currency basis to 456 million euros.

The analyst notes that management is observing positive momentum across the entire closed-toe category, ranging from clogs to boots.

In the U.S., Birkenstock is experiencing strong demand for clogs, particularly for the Boston and Tokyo silhouettes, as well as the newly introduced Lutry, which continues to perform well.

The solid demand for clogs has also positively impacted sales of the Zermatt slipper, which, despite being part of the product line for over five years, is now seeing increased demand due to the halo effect from the popularity of clogs.

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In Europe, lace-up styles and boots are outpacing other product categories. However, the analyst highlights that while closed-toe shoes are performing strongly, sandals still experienced double-digit growth during the same period.

Despite a challenging global macroeconomic environment, the brand continued to experience solid demand across various geographies and sales channels, successfully executing its strategy, Telsey notes.

The company sees FY25 revenue growth of 15% – 17% in constant currency, adjusted EBITDA margin of 30.8% – 31.3% (up 50 basis points) and capital expenditures of around 80 million euros.

The analyst highlights that the company's FY25 outlook aligns with the long-term expectations initially communicated during its IPO process in late 2023.

With consumers becoming more selective in their purchases, the analyst views Birkenstock as a brand well-positioned to maintain its success in the market due to its high-end lifestyle positioning, offering comfort and a frictionless walking experience, which creates a competitive edge that is difficult to replicate.

The analyst states that the sales estimate for FY24 has been updated to 2.12 billion euros, reflecting a 17.2% year-over-year increase, slightly higher than the previous estimate of 2.09 billion euros, which represented a 15.9% increase.

Additionally, the forecast for FY24 adjusted EBITDA has been revised to 661.5 million euros, a slight increase from the prior estimate of 654.2 million euros.

Price Action: BIRK shares are trading lower by 0.98% to $56.60 at last check Thursday.

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