Birkenstock on Thursday beat holiday quarter revenue expectations, reporting a 22% year-on-year jump, as the German sandal company benefited from higher pricing and rising U.S. demand.

As a newly public company, Birkenstock is still getting into a public reporting rhythm and only just released its fiscal 2023 results and 2024 guidance a little over a month ago. On Thursday, it said it stands by guidance issued then and still expects sales to be between 1.74 billion euros and 1.76 billion euros ($1.89 billion and $1.91 billion), representing growth of 17% to 18%.

The shoemaker, which started trading on the New York Stock Exchange under the ticker “BIRK” in October, saw a muted debut when it first hit the public markets, with shares sliding more than 12% on its first day as a public company. The stock has since rebounded and is up more than 5% this year, as of the Wednesday close. 

Birkenstock’s shares closed more than 2% lower Thursday.

Here’s how the shoemaker did in its fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

• Earnings per share: 9 euro cents adjusted vs. 9 euro cents expected
• Revenue: 302.9 million euros vs. 288.7 million euros expected.

The company reported a net loss of 7.15 million euros for the three-month period that ended Dec. 31, or a loss of 4 euro cents per share. A year earlier, it reported a loss of 9.19 million euros, or a loss of 5 euro cents per share. Excluding one-time items, Birkenstock reported a profit of 17 million euros, or 9 euro cents per share.

Sales rose to 302.9 million euros, up 22% from 248.5 million euros a year earlier.

Adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) rose 12% year on year to 81 million euros, with an adjusted EBITDA margin of 26.9%, down from 29.1% a year earlier.

The retailer has been making strides to grow its direct-to-consumer business, which comes with better profits and more customer insights than relying on wholesale partners. 

CEO Oliver Reichert has said the company deliberately engineers its distribution strategy so demand is higher than supply but it’s working to double its production capabilities over the next three years to narrow that gap. The chief executive said those investments, along with other efforts the company is undertaking to drive growth, is having a “planned” but “temporary” impact to profitability.

The company’s gross profit margin inched down to 61% from 61.7% during the same period last year, with Birkenstock citing “unfavorable currency translation and the planned, temporary under-absorption from our ongoing capacity expansion.” The company said it continues to carefully track input costs and is mitigating inflationary pressures with “executed, selective price increases.”

In Europe, the company said it had “two consecutive price adjustments” with “no signs of rejection.”

For the first time, closed-toe shoes, including everything from sneakers to clogs, accounted for a larger percentage of sales than sandals, executives said. Strong sales outside of Birkenstock’s traditional sandal have given the company a boost during the fall and winter months when people aren’t buying opened-toed shoes as often and opens up an additional growth area for the retailer.

“It’s a broadly based closed-toe business right now, and I think that’s quite significant to say that this was the first time that non-sandals were the larger percentage of our business,” said David Kahan, Birkenstock’s president of the Americas.

During the quarter, Birkenstock saw more gains in its direct channels and said DTC sales accounted for 53% of overall revenue. While DTC is strong and a focus for the business, Birkenstock is still seeing robust demand across its wholesale channels, even as other retailers contend with a slowdown in orders as department stores and other big-box stores look to keep inventory levels in check and grapple with uncertain demand.

Executives noted that wholesalers are not only increasing their orders for Birkenstock’s products, they’re also increasingly opting for early delivery days to keep up with demand.

As other retailers like Nike, Under Armour and Timberland-owner VF Corp. contend with soft demand in North America, Birkenstock reported outsized strength in the region with sales up 21% during fiscal 2023. That momentum continued during its fiscal first quarter with sales up 14% in the region. In Europe, where demand in some parts has been softer than in North America, sales grew 32%, and in the Asia-Pacific, Middle East and Africa region, revenue jumped 47%.