Birkenstock Holding plc Ordinary Shares

Good morning and thank you for standing by. Welcome to Birkenstock's third quarter fiscal 2024 earnings conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. The company allocated 60 minutes in total to this conference call. I would like to remind everyone that this conference call is being recorded. I will now turn the call over to Megan Kulik, Director of Investor Relations.

Hello, and thank you everyone for joining us today. On the call are Oliver Reichert, Director of Birkenstock Holding PLC and Chief Executive Officer of the Birkenstock Group, and Eric Mossman, Chief Financial Officer of the Birkenstock Group. Klaus Baumann, Chief Sales Officer. David Kahn, President of the Americas. Tiffany Wu, Managing Director of Greater China. Alexander Hoff, Vice President of Global Finance will join us for the Q&A. Please keep in mind that our fiscal year ends on September 30th. Thus, our third quarter of fiscal 2024 ended on June 30th, 2024. You may find the press release and supplemental presentation connected to today's discussion on our investor relations website, birkenstock-holding.com. We would like to remind you that some of the information provided during this call is forward-looking and accordingly is subject to the safe harbor provisions of the federal securities laws. These statements are subject to various risks, uncertainties, and assumptions which could cause our actual results to differ materially from these statements. These risks, uncertainties, and assumptions are detailed in this morning's press release, as well as in our filings with the SEC, which can be found on our website at birkenstockholdings.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During the call, all revenue growth rates will be cited on a constant currency basis unless otherwise stated. We will also refer to certain non-IFRS financial information. We use non-IFRS measures as we believe they represent operational performance and underlying results of our business more accurately. The presentation of this non-IFRS financial information is not intended to be considered by itself or as a substitute for the financial information prepared and presented in accordance with IFRS. Reconciliations of IFRS to non-IFRS measures can be found in this morning's press release and in our SEC filings. With that, I'll turn the call over to Oliver.

Good morning, everybody, and thank you for joining today's call. It was great seeing many of you in June during our most recent roadshow. We thank you for your love for the brand and kind support. We are happy to be here today to discuss another exceptional record-setting quarter for our company. We achieved the highest quarterly revenue in our history. This was driven by the unbreakable and growing demand for our products across all segments, channels, and categories. As promised during our IPO and secondary offering, we're delivering mid- to high-teens revenue growth, gross margin of 60%, and adjusted EBITDA margins of 30% plus. As promised, expanding into the wide space opportunities, we identified closed-toe silhouettes, orthopedics, professional, outdoor, the important Abmai region, and own retail. Now let's have a look at the third quarter. Bittenstock achieved 19% revenue growth in constant currency. As a super brand, we are taking share at and gaining the attention of our key retail partners and their consumers. Consumers are becoming increasingly selective and more intentional in their spending and looking for more physical touchpoints with the product. They are seeking brands they love and Bittenstock is one of these global super brands. Our 19% revenue growth in the quarter was driven by 23% growth in our B2B business and 14% growth in our DTC business, while outpacing our peers. Bittenstock is a product that needs to be seen and touched, and we benefited from this shift towards more in-person shopping. This movement is validated through increasing sell-through rates and reorders at our key retail partners. Accordingly, our B2B business was a bigger part of our third quarter than it has ever been. We continue to see growth in revenue from our key hosted accounts with over 90% of our B2B growth coming from within existing doors. Our partners increased order size and added new categories and did a great job presenting our brand to the new consumers. Younger consumers prefer to shop in-store, a trend we are seeing more and more. 12,400 wholesale stores are an important brand touchpoint for our consumers. With a limited but steadily growing fleet of 64 owned retail stores worldwide, we rely on our B2B business for its reach, predictability, and margin strength. Simply, the B2B business of a super brand like Bittenstock decreases risk with a very, very healthy margin. While ASP was up year over year, volume was a bigger contributor to revenue growth this quarter, given the strong B2B growth and the additional capacity provided by our factory expansion. As promised, we will never compromise our engineered distribution model and are maintaining our disciplined approach to relative market scarcity to keep supply comfortably under demand. As mentioned, Retail remains an important white space opportunity for us. We continue to selectively add to our footprint globally, adding seven new stores in the third quarter, bringing the total to 64. Our digital business continues to perform well with double digit growth in the quarter. We continue to add to our fast growing membership program, which grew 36% year over year to 6.9 million members. These members are highly engaged, spending more frequently, and spending over 25% more per transaction than non-members. We saw a continued shift towards closed-door silhouettes, including clocks, and premium products during the quarter. Sales from closed-door silhouettes grew more than double the rate of the overall brand in the quarter, and revenue share increased 400 basis points year over year. We continue to generate significant momentum and compelling top line performance from our newest styles and have excellent new products in the pipeline in each category and region. At the same time, the momentum with our core silhouettes remains very strong. Revenue from our top five core silhouettes, most of which have been around for close to 50 years, was up 24% in the quarter. This highlights the continued commercial relevance of these iconic models in most recognizable styles. Now let's move to our discussion of segment performance. Within our largest segment in the Americas, strong consumer demand for our brand continued in the third quarter. Revenue in the region was up 15% compared to the same period a year ago. Our B2B channel was especially strong in the quarter. We saw particularly strength in department store accounts, which were up over 25%. Many drove meaningful brand exposure with 250-year anniversary statement displays, in which they allocated more space to Brittenstock to support the initiatives. They celebrated the rich heritage of the brand and also included expansionary products, such as closed-door premium executions. Full price realization remained very strong at 95%. This resulted in continued strong replenishment orders and backlog into 25. We carefully managed business to support our relative scarcity model across our wholesale partners, and our stock-to-sales ratios remained very healthy. New points of distribution in the Americas accounted for a single-digit percentage of revenue growth. Newly opened doors were focused on specialty retailers in the wide space areas we identified, including professional, outdoor, and running specialty retailers, where the benefits of our footbed as a recovery is finding strong end-use demand. As mentioned earlier, we saw a noticeable shift to in-person shopping during the quarter with increased traffic at our own stores and increased sell-through at our B2B partners. Still, growth in the third quarter in our DTC channel was up in the high thinner digits. Our own store retail sales were up over 60%, driven by strong closed-toe and premium product sales. With an own retail fleet of currently eight stores in the U.S., we view the 6,600 wholesale doors as a key asset in which we can connect with consumers. The results speak for themselves. Consumers want to shop for Burton stocks and we have the ability to interact with them wherever they are searching for our brand, be it online or in store. We opened three new own retail stores in the US during the third quarter, including our newest flagship in Austin. We plan to open additional stores in Boston and Nashville over the coming months. We continue to be selective in our retail expansion, looking for the right market and the ideal location to allow for the 12 to 18 months payback required. We will continue to leverage the strength of our B2B partners to connect with Birkenstock fans in person more broadly. In our second largest segment, Europe, We delivered another exceptional quarter with growth of 19% underpinned by continued strong consumer demand across the region. Birkenstock continues to grow double digits and to take share in a market that remains soft. While we realized strong double-digit growth across the whole region, we saw the best performance in those countries where we recently phased out distributors and replaced them with our own distributions. such as France and Benelux. We saw strength in both the DTC and the B2B channels, but similar to the Americas, B2B outpaced the double-digit growth of DTC in the third quarter. Our focus on better alignment with key strategic retail partners led to increased orders and strong sell-through performance from these targeted accounts. As we saw in the Americas, over 90% of the growth in B2B came from within existing doors. Our partners continued to add to the Bittenstock assortment to meet the expanding consumer demand. Bittenstock continues to be one of the top performing brands across the region for our wholesale partners. Similar to the Americas, we saw a move toward more in-store purchasing in the quarter. This is why it is so important that we continue to balance a very strong, stable and profitable B2B business with our D2C business and increase our own retail fleet. With our engineered distribution, we can easily adapt to any changes in consumer spending patterns to meet market demands. Within Europe, we saw very strong consumer adoption of newer models coming out of Parseval's factory. The Shinjuku, Mogami Terra and Reykjavik had strong sell-throughs of up to 90% and were sold out in many sizes and colors. Lastly, I want to congratulate the team on the successful launch of our new line of sneakers, footbeds and insole during Paris Fashion Week on the recent opening of our newest European flagship store in Paris, located in the heart of the historic Marais district. The APMA was again our fastest growing segment in the third quarter of fiscal 2024. With a revenue growth of 41 percent, driven by strong growth in both volume and ASP, growth in the region was largely driven by our DTC channel. We added four new owned retail stores, including three in India and one in Japan, bringing the total in the APMA region to 23. We also saw a healthy increase in B2B in third quarter of fiscal 2024, which was driven by an expansion within our monobrand partner stores in the addition of 10 newly opened stores. Demand in APMA is broad-based and, like other regions, has benefited from closed-toe silhouettes, including clocks, which more than doubled compared to the same quarter last year. We saw particularly strong growth from our two last markets in the region, Japan and Australia. Greater China, which currently makes up less than 15% of the APMA revenue, grew over 25% in the quarter and remains an important expansionary market for BIP stock. We are still in the early stages of our market rollout there and are starting to see the benefits of our efforts already. We had a very successful opening of our Shanghai pop-up store in April, and it generated significant brand awareness and interest. Brand search on WeChat more than tripled in the third quarter, and Birkenstock was a top five brand in our category in the most recent 618 event on Tmall and JD. I will now turn it over to Eric to discuss our financial results in more detail. Thank you.