The development plans of Birkenstock do not impress investors.

In spite of the possibility of changing fashion, Birkenstock is increasing its expenditure to add stores and increase manufacturing because it believes that the market for its robust two-strap sandal will remain strong. The German shoe manufacturer anticipates growth in sales for its 2024 fiscal year to exceed 15%, following a 20% increase to about €1.5 billion (£1.29 billion) in 2023. However, investors were unimpressed with the prediction, which caused shares to drop. These were the company’s first results since its shares were listed in the US. It has exposed the long-standing family business to criticism on the open market.

Executives expressed optimism about the future, but Birkenstock shares plunged more than 8% after the results were released. The company’s profitability decreased the previous year, and as it continues to invest, margins are predicted to decline even more in 2024. The company is also encountering doubts about the sustainability of the robust consumer spending that has fueled its sales, given the slowdown in major economies like the US and the decline in luxury sales. Oliver Reichert, the boss, stated that he had not noticed a noticeable decline in demand and was “undeterred” by the general financial doldrums. In a conference call with analysts to go over the results, he stated, “It is a bit different from the desire-driven luxury brands.”

“Under pressure, they weigh significantly more. We observe growth everywhere, therefore we are not.” Over the past ten years, Birkenstock—once synonymous with a certain kind of granola-eating, nature-loving dorkiness—has undergone a change in reputation because to designer partnerships and leading roles in movies like Barbie. However, the company’s voyage on the stock markets has been rocky, raising concerns about how to value the business that manufactures “luxury” shoes for the mainstream market while operating in an unknown area. When it first began trading in October, its shares saw a significant decline, but they have since rebounded. Following the release of the findings, they were trading at about $45 per share in mid-morning New York trade on Thursday.

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