Birkenstock Stubs Its Toe in IPO

Did you know the human foot uses 26 bones, 33 muscles and more than 100 tendons and ligaments when a person is walking? Neither did I, until I read the quirky IPO prospectus for Birkenstock, the German maker of sublimely ugly, supremely comfortable sandals that went public on Wednesday. It was a lackluster debut: Birkenstock shares closed at $40.20, down nearly 13% from their $46 offering price. It was another sign the good vibes in the IPO market in recent weeks have mostly dissipated. One recent IPO poster child, Instacart, trades below its offering price, while two others, Arm and Klayvio, are barely trading above theirs.     

The investor reaction to Birkenstock is a pity. This isn’t some sickly direct to consumer business. It’s a beloved brand with an uncanny appeal across generations—from the free lovin’ hippies of the 1960s to today’s tweens and high-end fashionistas. Its free cash flow is also growing nicely: €163 million in the nine months ended June 30, more than double the €73 million in free cash flow from the same period a year earlier. And revenue grew 21% to €1.12 billion between those same time periods.