Why Birkenstock stock hit an all-time high today, surpassing $57 per share.

stock of shoe company Birkenstock (Burke 11.66%) It hit an all-time high on Thursday after the company reported financial results for its second quarter of fiscal 2024. Shares rose as much as 15% and were up 12% by market close for the day.

This old company is still going strong.

Birkenstock certainly doesn’t have a demand problem. This is encouraging for a shoe company that has been in business for 250 years. In the second quarter, the company reported record sales of 481 million euros (about $521 million), up 22% year-over-year.

Birkenstock’s second-quarter gross profit retreated to unexpected levels. In the second quarter, we had a margin of 56%, compared to a margin of nearly 60% a year earlier. However, management has pointed to temporary issues and still expects gross margins to hit 60% in the medium term, which may explain why investors have been willing to overlook the issue.

Investors may be most excited about Birkenstock’s annual outlook. Management had previously projected annual sales growth of 17 to 18 percent, but now thinks it will grow sales by 19 percent. And this increased outlook pushed the stock to new highs today.

Can Birkenstock continue to grow?

Birkenstock was listed at the end of 2023 and has achieved remarkable performance since then. The stock has soared to about six times its selling price, which seems expensive for shoe stocks in general. However, profit margins are good and growth continues, which generally makes the stock more valuable.

The real question for long-term investors is how much room there is for Birkenstock to expand. Growth was fastest in Asia, the Middle East and Africa, up 42% in the second quarter. And this is encouraging as the region currently only accounts for about 11.5% of total business. This suggests continued growth potential and could be a good reason to hold on for now.