On Wednesday, Mizuho (NYSE:MFG) Securities reaffirmed its positive stance on Birkenstock Holding plc (NYSE: NYSE:BIRK), maintaining an Outperform rating and a $60.00 price target for the company's stock.
The endorsement follows Birkenstock's report of continued robust growth in the fourth quarter, with both direct-to-consumer (DTC) and wholesale channels accelerating across various regions.
Despite gross margins (GM) falling short of Wall Street expectations, which management attributed to a reclassification of expenses from the previous year, a temporary increase in capacity, and higher wholesale costs, the company's adjusted EBITDA margin outperformed predictions. Birkenstock has provided guidance for full-year constant currency revenues to grow by 15-17%, with gross margins approaching the long-term target of around 60%, resulting in an adjusted EBITDA Margin between 30.8% and 31.3%.
The company reiterated its medium and long-term objectives, aiming for mid to high-teens sales growth and maintaining gross margins and adjusted EBITDA of approximately 60% and over 30%, respectively.
"Along with improving BS deleveraging, we continue to flag industry-leading growth and see whitespace ahead at strong margins," the analysts added.
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