When you think of growth stocks, you probably don’t think of footwear makers, but the industry has had a surprising number of big winners in recent history. Nike (NYSE: NKE) is likely the best known of the group, and the Swoosh has delivered monster returns over its history.
But more recently, other footwork stocks have shined. These include Deckers Outdoor, the parent of the Ugg, Hoka, and Teva brands; Crocs; and Skechers USA. All have outperformed both Nike and the S&P 500 by a wide margin over the last decade, as the chart below shows:
Unlike much of the broader apparel industry, footwear companies benefit from strong branding. And demand for casual footwear has been strong over the last decade, driven in part by the remote-work trend kicked off by the COVID-19 pandemic.
Now, Birkenstock Holding (BIRK 1.24%) has become the latest company to enter the fray. The 249-year-old company went public on Wednesday, but the debut was not so well-received; the stock finished the session down 12.6% from its $46 listing price.
However, investors shouldn’t write off Birkenstock on the basis of a weak opening day. Let’s take a closer look at what the footwear stock offers to see if it can repeat the performance of peers like Deckers.
A big step forward
Birkenstock has been well-known for its leather sandals for generations, Over the last decade the company has reinvented itself, in part due to the influence of new investors, and its growth has been impressive. Revenue has risen by more than 300% from 2014 to 2022, for a 20% compound annual growth rate, reaching 1.24 billion euros last year.
Its growth took off after the Birkenstock family brought in its first outside