Birkenstock profit outlook paints a mixed picture for investors

German sandal maker Birkenstock—producer of everyone’s favorite ugly shoe—had a mixed start to the new year. While sales were up, its profit outlook for the year was down, underwhelming some investors.

In Q4, sales hit $407.7 million rising 16%, surpassing analyst expectations.

Meanwhile, revenue for the fiscal year that ended September 30 rose 20% (to 1.49 billion euros) compared to the same period in 2022, while net profit was down to 75 million euros from 187 million euros a year earlier.

For the fourth quarter, sales were up 16% to 374.54 million euros (or $407.7 million at current exchange), which beat analysts’ expectations of $390.98 million. Adjusted profit per share was 0.14 euros, which missed estimates.

Still, CEO Oliver Reichert remained optimistic and said the company was banking on growth and targeting untapped markets like China and India. In fact, Birkenstock said it believes its revenue could go up 18% this year despite inflation, rising costs, and weak consumer spending in “more traditional markets,” Bloomberg reported.

We’'ll see if some of that optimism rubs off on investors. The retailer launched its IPO in October, raising ~$1.48 billion, but it didn’t get off to a great start: The highly anticipated offering performed below expectations with the debut stock price sliding more than 12%.

The company, however, seemed to have picked itself up about a month later, meeting the initial public offering price for the first time with consumer spending up during the holiday season.