Birkenstock Holding plc Ordinary Shares

Good morning and thank you for standing by. Welcome to Birkenstock's first quarter 2025 earnings conference call. At this time, all participants are in 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 over the call 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, Eric Mossman, the outgoing Chief Financial Officer of the Birkenstock Group, and Ivica Krola, Chief Financial Officer of the Birkenstock Group, as of February 1st. Klaus Baumann, Chief Sales Officer, David Kahn, President Americas, Miko Buja, President EMEA, Alexander Hoff, Vice President, Global Finance, will also join us for the Q&A. Today, we are reporting the financial results of our fiscal first quarter of 2025, ending December 31st, 2024. You may find the press release and a supplemental presentation connected to today's discussion on our investor relations website at 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 the 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. As a reminder, this quarter marks the first quarter we are reporting under a new operating and reporting segment. the Americas, EMEA, and APAC. We filed a 6K on January 16th with a recast of fiscal 2023 and 2024 segment results to align with the new reporting structure and to aid in your analysis of our results. With that, I'll turn it over to Oliver.

Good morning, everybody, and thank you for joining today's call. Before I start the quarterly review, I want to thank Eric for his strong leadership and guidance over the past two years as we navigated the IPO process and first year as a public company. Eric, I wish you all the best in your future personal and professional life. And of course, I want to welcome Ibiza Chrollo to the Birkenstock family. Ibiza brings the operational background we need as we allocate our resources to the most attractive opportunities for both revenue growth and cost containment. IBISAR also brings the technical background to continue Eric's effort to level up our finance functions across all areas, including audit, tax, and FP&A. I look forward to working with you as we write the next chapter of our success story. Welcome, Ibiza. We are proud to report a very strong start to our fiscal 2025 with record first quarter results, which came in ahead of our expectations, driven by very strong holiday demand for Brittenstock products. We delivered 19% revenue growth in the first quarter, above the high end of our 15% to 17% target for the full year. Revenue growth was supported by double-digit volume growth and mid-single-digit growth in average selling price. Growth in our B2B business benefited from very strong sell-through and reorders from our key wholesale partners throughout the holiday season. And our D2C business also strengthened during the critical holiday shopping period as strong gifting demand for styles such as the Boston Clock led to record traffic to our website. We are starting fiscal 2025 much in the same way we exited fiscal 2024, with strong and growing demand from our core markets and products by leaning into the wide space growth opportunities we have identified, closed-toe shoes, the APAC region, and owned retail. During the quarter, revenue from closed-toe silhouettes grew at over twice the rate of the overall group and increased share of business by 600 basis points, accounting for well over half of the revenue in the quarter. Our peak winter quarter. During the first quarter, 12 of our top 20 selling silhouettes were closed-toe, including six in clogs and six in traditional lace-up shoes and food category. We are very successfully turning Wittenstock into a four-season brand. Our APEC business grew at 47%, two and a half times the pace of the overall business. And we opened four new own retail doors during the first quarter, bringing the total to 71 stores globally. By channel, as expected, We saw continued strength in our wholesale business, which grew by 30% during the first quarter of 2025. Once again, over 90% of the growth came from within existing doors as our partners continue to allocate more shelf space to the Brittenstock brand. Our DTC business grew 10%, a strong result when compared to the 30% growth in the year-ago quarter. As we look to Q2 and the remainder of 2025, we expect more balanced growth between our DTC and B2B businesses, with DTC likely to grow slightly faster than B2B in the second half of the year as we continue to add additional stores and invest in our digital business globally. Our membership base continues to grow nicely, reaching 8.8 million loyal members, up nearly 30% year over year. Now let's move to a brief discussion of segment performance for the year. Within our largest segment, the Americas, we experienced strong consumer demand for our brand throughout the quarter, especially around the peak holiday shopping period. Revenue in the region was up 16% compared to the first quarter of 2024. Closed-toe share of business reached nearly two-thirds driven by the incredibly strong demand for clocks, a category like sandals that is becoming synonymous with the name Birkenstock and making us a year-round wardrobe staple. B2B was especially strong as many of our strategic partners allocated more space to Birkenstock and experienced very strong holiday sell-through with many high-demand styles. such as the Boston Clock, selling out at most retail partners. America's DTC, which is almost entirely from our digital business, strengthened late in the quarter as shoppers sought out high-demand holiday gifting items, including clocks, home shoes, and our shearling executions, especially as the cold weather set in. Search for Birkenstock clocks was up 70% over the critical holiday shopping period versus last year, driving increased traffic to bildenstock.com. We expanded our physical retail presence, opening our Boston Newbury Street store during the quarter, the ninth location in the U.S., and we plan to add several additional stores later this year. In EMEA, we delivered growth of 17%, which was growth-based across all countries. This result stands out in the current market environment, characterized by flat market growth, macroeconomic challenges, and uncertainty. As consumers switched to their winter wardrobe, they remained loyal to the Birkenstock brand. Closed-toe, including clogs, grew over two and a half times faster than sandals, driving ASP higher. Lace-up shoes and boots were up over 50% and increased share of business by 300 basis points. In our online channel in EMEA, 16 of our top 20 selling styles were closed-toe, including seven boots. Shoes became the number two category in EMEA, showcasing strong growth in this important expansionary category. In our B2B channel, We doubled share of business in shoes compared to last year and continue to see strong growth in our order book for spring summer 25. We were pleased to see that Wittenstock was the top choice on holiday wishlist with sell-throughs at our key retail partners increasing up to 30% year over year during gifting season. We opened a new store in Amsterdam, Netherlands during the quarter. bringing our store count in EMEA to 35, and identified key locations throughout Europe for additional owned retail stores through 2025. The APEC region was again the fastest growing segment in the quarter, growing 47%, two and a half times the pace of the overall business, and now representing 13% of total revenue, up from 10.5% a year ago. Growth in the quarter benefited from an accelerated pace of store openings and earlier shipments to some B2B partners as we continue to make progress toward penetrating this significant white space for the Birkenstock brand. Aligned with our roadmap and commitment to the region, we added two new own retail stores, bringing our total to 27 in the APAC region. We also expanded our strategic partnerships, increasing our monobrand partner doors by 19. We expect the pace of openings to moderate in the coming quarters, leading to a more normalized APEC growth rate of double the group average. Greater China made up approximately 30% share of APAC revenue and grew above segment average. We are still in the early stages of our market rollout there, but are steadily building brand awareness and demand through our increased retail and online presence. It is a market where we see a tremendous opportunity for strong brands to take share. We opened our first own store in Chengdu in October and will turn our successful pop-up store in Shanghai into a permanent store later this year. I will now turn it over to Eric to discuss our financial results in more detail.