Birkenstock UK has reported a drop in full year profits, despite sales continuing to skyrocket. According to the company's financial results for the year ending 30 September 2022, pre-tax profits fell 24% to £727,000, down from £954,000 the year before.

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The footwear retailer attributed the fall to £4.4m of “administrative expenses” relating to property costs, advertising, higher salaries and foreign exchange losses. Despite this, total sales increased by 49% to £34.55m in 2022, boosted by a 40% increase in wholesale revenue to £30.1m, up from £21.3m the year before.

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Retail revenue more than doubled over the period, skyrocketing 139% to £4.5m compared to £1.88m in 2021. Birkenstock, which operates three retail stores in the UK, said its shops “have all shown growth as consumers revert to retail store shopping after lockdown online consumption”.

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The retailer issued a £2m dividend to its parent company Birkenstock International, resulting in a net asset decrease of £1.077m, down from £2.438m in 2021.

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Birkenstock UK said sales in the current financial year have been “above initial expectations” and expects revenue to continue to increase. The company has seen a surge in popularity in recent years, with Birkenstocks becoming one of the most purchased fashion items of 2022.

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Private equity owner L Catterton is reportedly considering launching an IPO of the shoe company as soon as September in a market listing that could value the business at over £6.3bn ($8bn). According to a report by The Financial Times, the listing could take place in Frankfurt, Germany, where the company is based.



Sources: https://www.retailgazette.co.uk/blog/2023/08/birkenstock-profits-fall/