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Investing.com - Birkenstock Holding plc (NYSE:BIRK), currently trading at $50.13 with a market capitalization of $9.23 billion, maintained its Buy rating and $60.00 price target at Goldman Sachs following the company’s third-quarter earnings report that exceeded market expectations. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value assessment.
The footwear manufacturer reported currency-adjusted sales growth of 16% for the quarter ending June, surpassing consensus estimates of 14%. The company demonstrated continued brand momentum and market share gains during what is seasonally its largest quarter.
Birkenstock’s adjusted EBITDA reached €635 million, representing a 2% beat versus market expectations and a 34.4% margin, which marked a 140 basis point improvement year-over-year. This performance was supported by a 100 basis point expansion in gross margin, with price increases and improved manufacturing utilization offsetting currency and inflation headwinds.
Management reiterated its fiscal year 2025 outlook, continuing to expect currency-adjusted growth at the high end of the 15-17% range and adjusted EBITDA margin between 31.3-31.8%. The company highlighted that in the U.S., revenue grew 25% across its top 10 wholesale partners despite a flat overall market.
Birkenstock continues to maintain pricing discipline with over 90% full-price realization, while production capacity constraints result in demand exceeding supply, particularly in Europe and Asia-Pacific regions. The business-to-business segment, representing 60% of sales, continued to outperform direct-to-consumer channels during the quarter.
In other recent news, Birkenstock Holding plc has been the subject of several notable analyst updates and ratings adjustments. Fitch Ratings upgraded Birkenstock’s Long-Term Issuer Default Rating to ’BB+’ from ’BB’, citing the company’s strong profitability and conservative financial policies. UBS raised its price target for Birkenstock to $77, highlighting solid topline trends in the third quarter, although these trends are not expected to lead to an increase in the company’s fiscal year 2025 revenue growth outlook. Stifel, while maintaining a Buy rating, lowered its price target to $66 due to Birkenstock’s shift towards the B2B segment, which is expected to impact revenue levels despite being beneficial for EBITDA margins. Piper Sandler kept its Overweight rating and a $65 price target, anticipating 16% currency-neutral sales growth for the upcoming fiscal third-quarter results. Stifel also reaffirmed its Buy rating, noting strong brand fundamentals despite anticipated currency headwinds affecting revenue and profitability. These developments indicate a generally positive outlook from analysts, with adjustments reflecting both market challenges and opportunities.
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