German footwear manufacturer Birkenstock raised expectations for the remaining year after reporting strong quarterly financial results on Thursday.
Birkenstock said that sales should climb by about 20% on a currency-adjusted basis during the company's financial year, which ends in October. The company had previously targeted sales growth of 17 to 18%.
Birkenstock chief executive Oliver Reichert said the company continues to have great opportunities to expand sales of its existing products. He contended that sales of Birkenstock products - including the company's iconic scandals - are only minimally affected by short-term fashion trends.
In the company's second quarter, which ran until the end of March, Birkenstock increased its turnover by 22% to €481 million ($520 million).
Markest in Asia in particular grew strongly, according to the company, although gross margins declined because Birkenstock is expanding production. The costs of expansion had a temporary negative impact on financial results.
According to the company, it also had to shoulder higher personnel costs.
Adjusted for special effects, earnings before interest, taxes, depreciation and amortization (EBITA) grew less strongly than sales, rising by 7% to €162 million.
The corresponding EBITA margin was 33.7%. For the year as a whole, it is expected to reach 30 to 30.5%.
Bottom-line profits for Birkenstock jumped by 45% in the quarter compared to the same quarter last year, reaching €72 million.
The comparison was boosted by lower profits at Birkenstock in the second quarter of last year, when higher foreign currency losses, share-based payments and remodelling expenses had a negative impact on profits.