Birkenstock UK has posted a drop in full year profits, despite sales continuing to skyrocket.
Pre-tax profits for the footwear retailer fell 24% to £727,000 in the year to 30 September 2022, down from £954,000 the year before.
Birkenstock attributed the fall to £4.4m of “administrative expenses” relating to property costs, advertising, higher salaries and foreign exchange losses.
It comes as the retailer reported a significant increase in total sales, which rocketed 49% to £34.55m in 2022.
The was boosted by a 40% increase in wholesale revenue to £30.1m, up from £21.3m the year before. Wholesale represents 87% of total sales.
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Full-year retail revenue more than doubled over the period, skyrocketing 139% to £4.5m compared to £1.88m in 2021. Retail sales represents 13% of the total revenue.
Birkenstock, which carries a three retail store portfolio in the UK, said its shops “have all shown growth as consumers revert to retail store shopping after lockdown online consumption”.
The retailer issued a £2m dividend to its parent company Birkenstock International. There was a net asset decrease as a result of dividend payment, being offset partially by profit, with net assets at £1.077m, down from £2.438m in 2021.
Birkenstock UK said sales in the current financial year have been “above initial expectations” and expects revenue to continue to increase.
The retailer has soared in popularity in recent years, with Birkenstocks becoming one of the most purchased fashion items of 2022.
Keen to build on its momentum, private equity owner L Catterton is said to be 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).
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