Shares of Birkenstock (BIRK) fell sharply on Thursday after the company posted third quarter profits that fell short expectations. The company did, however, tout strong sales growth in its B2B segment with revenue growing 23% year-over-year in the third quarter as wholesale demand remained high.

Stifel managing director, equity research analyst Jim Duffy joins Catalysts to break down Birkenstock's recent performance and what investors need to know about the stock moving forward.

"Myself and others expected them to over-deliver on the quarter and raise the guidance. Indeed, they did overdeliver on the EBITDA line, but they did see some deceleration on a sequential basis relative to the fiscal second quarter. All indicators in the marketplace are that appetite for the product remains strong. Inventories in the marketplace are well managed. I think it's just a temporary setback in the stock," says Duffy.

On the consumer and why Birkenstock may still be in a good position, Duffy states: "The consumer is becoming more discerning. We do think they still have good capacity to spend in discretionary categories. They're just being more selective about where they're allocating those dollars. Those companies like an On Running (ONON), like Birkenstock that are bringing excitement to the marketplace. We think they can continue to drive growth."

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This post was written by Nicholas Jacobino