Birkenstock Holding Ltd. shares tumbled nearly 12% from their IPO price in the sandal brand’s first day of trading on the New York Stock Exchange Wednesday.
The German-based company priced its IPO at $46 a share late Tuesday, which reflected the midpoint of an earlier stated range. However, the company opened Wednesday at just under $41 and ended its first day of trading down nearly 13% to $40.06 and a market cap of $7.45 billion.
It was a lackluster start to trading for the business, which generated revenue of 1.24 billion euros ($1.32 billion) during its fiscal year ended Sept. 30, according to filings with the Securities and Exchange Commission. The company recorded a net profit of 187.1 million euros ($198.68 million) during that same year.
Birkenstock has big ambitions to continue to grow by expanding into new markets beyond its largest in the U.S. and Europe. It also outlined in its SEC filings plans to grow the brand’s reach in categories such as professional, orthopedic, active and outdoor, and kids.
Part of its more recent successes have been its fashion collaborations, with brands such as Dior and Fear of God among many others, that have made it a closet staple for trendsetters.
About 10 years ago, the once family-owned business brought in outside management, tapping current CEO Oliver Reichert to lead the company. Birkenstock has seen a compounded annual growth rate of 20% between fiscal year 2014 and fiscal 2022.
Private equity firm L Catterton bought a majority stake in Birkenstock in 2021.
“The best thing for the brand would be staying family owned, but within the family there were so many problems, so we go for the second-best option and that’s to be public and give the brand back to the people,” Reichert told CNBC Wednesday in explaining the thinking behind taking the company public.
Shares of other footwear brands that have recently gone public were also trading down on Wednesday.
Allbirds Inc. shares fell 3.75% to 94 cents. The company went public in 2021 and has fallen 94% from its opening price. Dr. Martens PLC, which also went public in 2021, ended Wednesday with a 4.85% decline and shares off 74% since it first began trading.