Financial Data and Key Metrics Changes - The company achieved remarkable revenue growth of 20% in fiscal 2023, with fourth-quarter growth of 22% [14][116] - Gross profit margin for fiscal 2023 was 62.1%, up 180 basis points compared to fiscal 2022, although it slightly decreased by 20 basis points when adjusting for prior year effects [14][15] - Adjusted EBITDA for fiscal 2023 was EUR 483 million, up 11% compared to fiscal 2022, with an adjusted EBITDA margin of 32.4% [18][117] - Pro forma fully diluted adjusted earnings per share for fiscal 2023 were EUR 1.10, representing growth of 19% [20] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) revenues grew by 26% in fiscal 2023, significantly outperforming B2B growth [32] - In the fourth quarter, revenues increased by 40%, primarily driven by a strong B2B quarter with 73% growth [33] - DTC revenue growth in Europe was 24%, significantly outperforming B2B, which saw 15% growth [46][44] Market Data and Key Metrics Changes - The Americas region achieved a revenue growth of 20% in fiscal 2023, making it the largest contributor to overall revenue growth [119] - The APMA segment showed the highest growth rates of all segments in fiscal 2023 with 27% [49] - In Europe, fiscal 2023 revenues increased by 18%, with DTC penetration reaching 40% [42][117] Company Strategy and Development Direction - The company aims to provide guidance on a full-year basis rather than quarterly, reflecting a long-term success strategy [27] - The company plans to invest approximately EUR 150 million in capital expenditures in fiscal 2024, primarily for production capacity expansion and global retail store expansion [30] - The company is focused on maintaining scarcity in the market to drive demand, with a disciplined approach to distribution [36][66] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing strong consumer demand for the brand and a unique position in the market [116][100] - The company anticipates modest headwinds to adjusted EBITDA margins in fiscal 2024 due to planned ramp-up costs and initial under-absorption [29] - Management noted that inflationary pressures were underestimated, impacting margins, but they remain confident in their pricing power [80][105] Other Important Information - The company achieved cash flow from operating activities of EUR 359 million, up 53% compared to the prior year [23] - The company has been actively deleveraging post-IPO, reducing leverage to below 2.5 [26] - The new factory in Pasewalk is expected to significantly increase production capacity, with benefits anticipated in fiscal 2024 and beyond [28][104] Q&A Session Summary Question: Clarification on fiscal 2024 revenue growth expectations - Management indicated that the fourth-quarter growth rate of 22% is a good indicator for early fiscal 2024 revenue growth, with a full-year guidance of 17% to 18% [12][27] Question: Insights on the new factory's impact on unit volume growth - Management confirmed that the new factory will enhance distribution and capacity, with benefits expected to materialize later in fiscal 2024 [12][28] Question: Discussion on land grabs in the U.S. market - Management explained that "land grabs" refer to aggressively capturing market share, particularly in challenging consumer spending environments [36] Question: Changes in U.S. consumer demand - Management noted that despite challenges, the demand for their products remains strong, with intentional purchasing patterns observed [64][83] Question: Regional growth expectations for fiscal 2024 - Management indicated that Europe and the Americas are growing at similar rates, while APMA is experiencing higher growth due to increased DTC penetration [79] Question: Insights on inventory levels and SKU performance - Management reported a decrease in inventory compared to revenue, with over 75% of inventory already allocated to customers [98]
Birkenstock plc(BIRK) - 2023 Q4 - Earnings Call Transcript