BIRK

Image source: The Motley Fool. Thursday, Aug. 13, 2026, at 8 a.m. ET Director of Investor Relations-Megan Kulick Director of Birkenstock Holding plc and Chief Executive Officer of the Birkenstock Group-Oliver Reichert Chief Financial Officer of the Birkenstock Group-Ivica Krolo Operator: Good morning, and thank you for standing by. Welcome to Birkenstock's Third Quarter of Fiscal 2026 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded. I will now turn the call over to Megan Kulick, Director of Investor Relations. Megan Kulick: Hello, and thank you, everyone, for joining us today. On the call are Oliver Reichert, Director of Birkenstock Holding plc and Chief Executive Officer of the Birkenstock Group; and Ivica Krolo, Chief Financial Officer of the Birkenstock Group. Today, we are reporting the financial results for our fiscal third quarter ended June 30, 2026. You may find the press release and a supplemental presentation connected to today's discussion on our Investor Relations website at birkenstock-holding.com. Results have also been filed on Form 6-K with the SEC. We would like to remind you that some of the information provided during this call is forward-looking and accordingly is subject to the safe harbor provisions of federal security laws. These statements are subject to various risks, uncertainties and assumptions, which could cause our actual results to differ materially from these statements. These risks, uncertainties and assumptions are detailed in this morning's press release as well as in our filings with the SEC, which can be found on our website at birkenstock-holding.com. We undertake no obligation to revise or update any forward-looking statements or information, except for as required by law. We will reference certain non-IFRS financial information. We use non-IFRS measures as we believe they represent the operational performance and underlying results of our business more accurately. The presentation of this non-IFRS information is not intended to be considered by itself or as a substitute for the financial information prepared and presented in accordance with IFRS. Reconciliations of non-IFRS measures to IFRS measures can be found in this morning's press release and in our SEC filings. Now I'll turn the call over to Oliver. Oliver Reichert: Good morning, everybody. We performed exceptionally well in Q3 and once again demonstrated the strength of our brands. Given this continued momentum for fiscal 2026, we raised our guidance for revenue growth to 15% in constant currency and adjusted EBITDA of at least EUR 710 million. We delivered another strong quarter. Our revenue grew 15% in constant currency at the high end of our annual target of 13% to 15%. EMEA growth accelerated to 15%. DTC growth accelerated to 16% in constant currency. Adjusted EBITDA margin on a like-for-like basis improved 60 basis points year-over-year. We achieved this despite an increase in costs, especially freight rates due to the conflicts in the Middle East. We returned capital to shareholders by repurchasing EUR 230 million in shares. We also refinanced and upsized our senior notes at a 75 basis points lower rate. We continue to grow in our white spaces. APAC continued its high-quality and DTC-led growth, especially in China. We accelerated the pace of retail expansion. We are on track to meet our target of approximately 140 doors by the end of fiscal '26. Importantly, own retail revenue grew 50% in constant currency. Same-store sales were up high single digits. We saw a strong acceleration in EMEA digital growth, capturing more demand in our own e-com channel. Closed-toe penetration was up 500 basis points, consistent with recent trends and in line with our goal to expand usage occasions for our footbed. Product mix contributed over half of the growth in ASP. We saw double-digit growth across all of our regions. Our Americas business was up 14% in constant currency. Youth retailers and sporting goods stores continue to lead B2B growth with sellout at key partners in these channels up above 20% year-over-year. Within the Americas DTC business, we saw very strong retail growth as we continue to open new stores to capture more in-person shopping demand in our own doors. We opened 4 new stores in the U.S., bringing the total to 21. Growth in EMEA was 15%. In the largest, most important quarter for EMEA, we saw accelerating consumer demand, especially in our DTC business, both online and in-store with strong full price realization of 93%. We opened 4 stores during the quarter, bringing the total in EMEA to 50. APAC grew 23% in constant currency. Excluding Australia, APAC growth was close to 30%. Australia's growth in the quarter was impacted by a shift in quarterly cadence as a result of the distributor acquisition. We are very confident in our APAC target for the full year. Importantly, we had over 50% growth in China, the country with the highest ASP, a testament to our high-quality premium brand positioning in the region. Within the APAC segment, we opened 5 new owned stores, bringing the total to 53. On the product side, we continue to innovate and drive newness in both closed-toe and sandals. This innovation is most visible with our premium 1774 collection. We introduced new Raffia, Canvas and premium leather executions in Naples, Boston, Arizona and Gizeh. We also collaborated most recently with Song for the Mute, Ader Error and Repetto, a very successful launch targeting the female-led and growing popularity of ballet flats. This global movement also resulted in a very strong demand for the Mary Jane style, Santa Clarita, one of the newest mainline silhouette launches. This once again demonstrates our ability to create a trend within our brand. While demand for the Boston remains very strong, other clog executions also performed exceptionally well. For example, the Naples grew by more than 4x the units sold year-over-year. We also saw very strong growth in shoes, led by Utti, a lace-up moc-toe, which more than doubled in units sold year-over-year. Overall, non-Boston closed-toe executions were up more than 50%. About half of our top 20 silhouettes are closed-toe, including 3 that were introduced within the past 3 years. In our sandal business, we saw the strongest growth from our newest seasonal execution such as flowers, rivets, buckles, prints and textiles. Growth was especially strong in our Mayari, Madrid and Siena silhouettes. We highlight this newness most prominently within our DTC business, driving growth in our own channels. We remain super confident in the strength of our brand. We are purpose-driven and see strong global demand for the footbed. We target a diverse range of consumers across geography, gender, age and income. Our total addressable market is only limited by the global population. This gives us flexibility to drive growth regardless of global or regional macro conditions. We manage our distribution with discipline to maintain scarcity, properly segment the market, manage channel growth and protect full price realization. Now I will pass the call over to Ivica to go through the quarterly results in more detail. Ivica Krolo: Thanks, Oliver. I'm happy to share with you details of Birkenstock's performance for the third quarter of fiscal 2026, which exceeded our expectations. We generated third quarter revenues of EUR 720 million, growth of 13% on a reported basis. Growth in constant currency was 15% at the high end of our 13% to 15% expectation. The depreciation in the U.S. dollar, Canadian dollar and Asian currencies like the Indian rupee and the Japanese yen compared to the third quarter of 2025 caused a 180 basis points headwind to revenue growth in the quarter. For reference, in the third quarter of 2026, the average euro to U.S. dollar rate was $1.16, up from $1.13 in Q3 of fiscal 2025. We saw strong growth across all segments in the quarter. The Americas segment was up 14% in constant currency, continuing the trend we saw in the first half of the year and reflecting the consistent strength in our most developed markets. EMEA was up 15% in both reported and constant currency, a strong acceleration from Q2, driven by particularly strong D2C in Europe in both online and retail. We continue to see some localized impact in the Middle East related to the conflicts in the Gulf region, particularly in the UAE, which is highly dependent on tourism and export demand. This has been offset by strong domestic demand in markets such as Saudi Arabia. Overall, the Q3 performance was better than anticipated. APAC was up 23% in constant currency. APAC quarterly growth rates are skewed due to the changed revenue pattern from the Australia business. Prior to the acquisition, revenues were recognized when we delivered to the distributor before the peak season. We are now realizing revenues in line with the local market dynamics and seasonality. The Australian spring/summer months are September to February and D2C and B2B sellout peaks in these months, which aligns with our Q1 and Q4, which differs from the revenue realization pattern pre-transaction. Therefore, Q3 Australia growth was lower versus last year, which, as one of our top markets in the region had an impact on the APAC growth rate. Excluding the impact from Australia timing shifts, our APAC growth was close to 30%. We continue to expect APAC to grow at twice the pace of the other segments for the full year. By channel for the year, B2B was up 15% in constant currency, consistent with the trends of the last few quarters on the back of continued strong demand at our key partners. D2C accelerated strongly to 16% in constant currency, up 400 basis points from 12% growth in Q2 and outpaced B2B in the quarter. Our digital growth accelerated very nicely compared to the first half of the year. Many of the actions we are taking to drive improved conversion are beginning to show results. This includes improved content, enhanced user experience, including simplified checkout options and expanded loyalty and member benefits. Retail was up 50% as we continue to see very strong performance from our new and existing doors. We added 13 new owned stores, bringing our total to 124. Same-store sales growth was up high single digits. Adjusted gross profit margin for the third quarter was 59.2%, down 130 basis points year-over-year, mainly driven by 60 basis points of pressure from FX and 70 basis points of pressure from incremental U.S. tariffs. Adjusted gross profit margin, excluding these effects, was up 10 basis points year-over-year. While we continue to benefit from better capacity absorption, which contributed 50 basis points to adjusted gross profit margin, product mix caused a 40 basis points drag on margin. The ongoing shift to closed-toe silhouettes comes with a slight margin drag due to the manufacturing complexity and higher consumption of production minutes. However, the shift is very beneficial for us as it yields higher ASP and higher gross profit per pair despite the slightly lower-than-average gross margin percentage. Selling and distribution expenses were EUR 186 million in the third quarter, representing 25.9% of revenue. This was up 30 basis points from the prior year, primarily due to accelerated retail expansion and some higher logistics costs as a result of the conflicts in the Middle East. General and administration expenses were EUR 33 million or 4.5% of revenue, down 40 basis points year-over-year due to lower IT expenses and fixed cost leverage. Adjusted EBITDA in the third quarter of EUR 242 million was up 11% year-over-year. The flow-through of FX effects reduced adjusted EBITDA by EUR 8 million. Excluding this FX impact, EBITDA was up 15%. Adjusted EBITDA margin of 33.7% was down 70 basis points year-over-year due to 130 basis points of pressure from FX and tariffs. Excluding these impacts, adjusted EBITDA margin would have been up 60 basis points. This improvement is despite the increase in freight and logistics costs. Adjusted net profit was EUR 134 million in the third quarter, up 15% year-over-year. Adjusted EPS for Q3 was EUR 0.74, up 19% from EUR 0.62 a year ago. The debt refinancing triggered a EUR 11.7 million expense from the accelerated amortization of the transaction cost and the derecognition of the embedded derivative of the original senior notes. The ASR triggered a EUR 10.6 million expense from fair value changes due to share price movements during the term of the ASR. These onetime noncash expenses were recognized in finance costs and were excluded from adjusted net profit. We generated EUR 247 million in operating cash during the quarter compared to EUR 261 million in the prior year due to higher income tax payments totaling EUR 77 million. We ended the quarter with cash and cash equivalents of EUR 694 million after the share repurchase of EUR 230 million and the refinancing and upsizing of our long-term senior notes. As a reminder, in June, we repaid EUR 428.5 million of 5.25% senior notes due 2029 and issued EUR 900 million new senior notes due 2033 at 4.5%. The remaining excess cash added to the balance sheet gives us flexibility to further enhance shareholder value with an additional EUR 500 million share repurchase or the refinancing of other existing debt subject to market conditions. Our inventory to sales ratio was 37% in the quarter, up from 33% a quarter ago. The increase from last year is largely driven by the increase in capitalized tariffs and FX effects. Our DSO for the quarter were healthy 45 days, up slightly from 43 a year ago. During the quarter, we spent EUR 26 million in CapEx, adding to our production capacity in Arouca, Gorlitz and Pasewalk, beginning the build-out of Wittichenau and continuing our investments in retail and IT. We also paid the second tranche of the purchase price for Birkenstock Australia of EUR 9 million. Our net leverage was 1.8x as of June 30, 2026, up from 1.5x at September 30, 2025, reflecting the cash outflows from the ASR. Excluding the ASR, net leverage would have been approximately 1.4x. Turning to our outlook for the fourth quarter and fiscal 2026. In the fourth quarter, we expect revenue growth in constant currency within our annual guidance range of 13% to 15%. We expect FX to be relatively neutral in Q4, resulting in similar growth rate on a reported and constant currency basis. On margins for Q4, we expect FX to be neutral. On tariffs, given the recently announced agreement with the European Union and the implementation of Section 301 tariffs, we now expect a blended tariff rate for Q4 of just over 15%, below what we have experienced under the Section 122 tariffs. As a result, tariffs should also be relatively neutral year-over-year in Q4. For the full year, we now expect revenue growth of 15% at the high end of our guidance range of 13% to 15%. For the full year, the FX drag is expected to be 350 basis points. For the full year, we continue to expect adjusted gross margin of 57% to 57.5% and adjusted EBITDA margin of 30.2% to 30.5%, inclusive of approximately 200 basis points of pressure from FX and U.S. tariffs combined. Adjusted EBITDA is now expected to be at least EUR 710 million for the fiscal year. Our expected tax rate is 30% to 31%, up from our prior forecast of 26% to 28% due to the nontax deductible expenses largely associated with the ASR and debt issuance. Including the tax impact of the accelerated share repurchase as well as the refinancing and upsizing of our senior notes, adjusted EPS is expected to be EUR 1.90 to EUR 2.05, in line with our prior forecast. This includes approximately EUR 0.15 to EUR 0.20 of pressure from FX. This does not include the impact of any additional share repurchase beyond the ASR completed end of June. CapEx should be in the range of EUR 110 million to EUR 130 million. We have a net leverage target for the end of fiscal 2026 of approximately 1.6 to 1.7x, up from our previous forecast of 1.3 to 1.4x after the impact of the ASR, but excluding any additional share repurchases. With that, I'll turn it back to Oliver to close. Oliver Reichert: Thanks, Ivica. We are super happy increasing our revenue growth target to 15% in constant currency and adjusted EBITDA to at least EUR 710 million. Our third quarter results once again prove that demand for our beloved brand remains strong. Even in times of inflationary pressure on consumer wallets, we remain an accessible and desired brand. We are excited about the opportunities in the fast-growing and underpenetrated APAC market in expanding our own retail fleet and in the newness and innovation within our brand. As we look toward the final quarter of our fiscal 2026 and beyond, we plan to continue to grow our share and expand our following within our new younger target group, building lifetime connections with our consumers across regions and channels, drive innovation and create newness in both our closed-toe and in our sandal business, actively steer product between geographies and channels to optimize margins, maintain scarcity and protect brand equity, continue to use our strong balance sheet and capital allocation decision to drive shareholder returns. Our organic growth generates substantial cash flow. Over the past 2 years, our operating cash flow totaled EUR 774 million. Our first priority remains to invest in the business. Of this EUR 774 million, EUR 189 million was invested in CapEx. Given our currently undervalued shares, we will look for opportunities to continue our buybacks. We will now take your questions. Operator: [Operator Instructions] Your first question comes from the line of Matthew Boss with JPMorgan. Matthew Boss: Congrats on a nice quarter. So Oliver, nice recovery in direct-to-consumer growth this quarter, came in above B2B for the first time in 2 years. Can you speak to drivers of the improvement at direct-to-consumer and what you're seeing in B2B relative to D2C? And then relative to the raised top line guide for the year, could you talk to trends in the fourth quarter? And do you think there's potential upside to your 15% top line forecast for the year? Oliver Reichert: Matt, thank you for your question. I'm -- maybe a bit hard to understand because I'm dialing in from [indiscernible]. I'm heavy selling shoes here, as you can imagine, it's quite hot. But hopefully, you can hear me loud and clear. So to come back to your question, we delivered strong growth across both channels, of course, D2C outpaced B2B supported by the investments we are making in both own retail and in our own digital business. Both channels are and will remain important drivers for our business. The D2C performance was driven by own retail, where our expanded footprint and faster store opening pace delivered 50% growth. Same-store sales were also strong, up high single digits, which reflects the continued demand for our brand across our existing store fleet. We also saw accelerating online growth. Newness on the product side, greater personalization and stronger storytelling are making the digital experience more compelling and driving the conversion. This was most impactful in Europe, where we saw a clear step-up in online performance with 93% full price realization, even as the broader market became more promotional, as you know. So we are focused on growing the business where we can and create the most value. That means continuing to invest in D2C while maintaining a strong disciplined B2B business. Our wholesale partners are an important part of our growth strategy. They give us efficient access to new customers, particularly younger consumers while helping us maintain high-quality distribution across our markets. Our 15% constant currency revenue growth guidance reflects the strength we are seeing today across channels and markets. And last part of your question, we feel very confident about the momentum in the business and our long-term revenue growth target is 13% to 15%. Operator: Your next question comes from the line of Laurent Vasilescu from BNP Paribas. Laurent Vasilescu: I wanted to ask about EMEA. EMEA growth accelerated nicely versus Q2. Did you see any impact from the conflict in the Middle East? Could you provide additional color on key drivers behind the acceleration in growth? And to what extent did favorable weather conditions contribute to the growth relative to the underlying trends in the business? And curious, are you seeing any continuation of these trends into 4Q within EMEA? Ivica Krolo: Laurent, thank you for your question. It's Ivica. So indeed, we did continue to see an impact from the conflict in the Middle East, although certainly it was less pronounced than in Q2, basically at the onset of the conflicts back then. We were able to mitigate much of the pressure through adjustments in the delivery routes and strength in the other parts of the region. For instance, if you think of Saudi Arabia, a very resilient market and less dependent on tourism and expats. So in general, Q4 is a larger quarter in the Middle East. So we expect slightly more of an impact also due to the resumption of hostilities in the region itself. That said, we expect the total second half impact to be below the EUR 10 million to EUR 12 million we originally estimated. We now see this totaling high single-digit millions. Overall, the growth acceleration was largely driven by D2C demand, as Oliver already mentioned. Demand proved very resilient across the region, and we saw nice growth in both retail and online. We're also seeing the benefits of the investments and actions we've taken to drive traffic and improve conversion. This is also something we've spoke about in January at our Capital Markets Day, and this includes enhanced upper funnel online marketing, stronger content and optimization of the inside experience, and this is all contributing positively. So on the weather, definitely, warmer temperatures are generally favorable to our business. However, we are already seeing improved trends ahead of that, and those trends have continued into the first weeks of our fiscal Q4. And finally, to note, there was bad weather in some of our other markets in Q3 as well. Operator: Your next question comes from the line of Lorraine Hutchinson with Bank of America. Lorraine Hutchinson: So pricing over inflation was not a contributor to gross margin this quarter as it has been for the past few. Were you more promotional? And how should we think about your ability to pass inflation through with pricing when customers are a little more price sensitive? Are you seeing any signs of consumer pushback on pricing, particularly in early back-to-school? Ivica Krolo: Lorraine, it's Ivica. So our pricing decisions are made with the goal of passing through inflation and protecting gross margin, something that we do very consistently. There can be timing differences from when we take pricing and when the inflation works its way through the inventory and flows through the COGS. And please keep in mind year-to-date, the pricing over inflation benefit to gross margin is 30 basis points. On promotion, at an overall industry level, we see indeed a higher markdown activity as retailers compete for a more constrained consumer wallet. In this context, we continue to deliver a superior full price realization and gross margin. This basically underlines the strength of our brand and our markdown discipline, which remains unchanged. We are and will selectively discount as we always have. Any active markdown we do is to effectively manage our seasonal excess stock as our business continues to grow. So as you know, 75% to 80% of our business is core products and evergreen styles. Our markdown assortment is centered very much around prior season merchandise, seasonal colorways and broken size runs. And the beauty of our brand is we serve a broad range of price points from $50 to $1,500 and remain accessible when consumers are tightening up their spending. For those consumers who are more price sensitive, we offer executions in Birko-Flor, EVA or textile, for example. And importantly, any action we have taken are not negatively impacting our margin. As you can see from our results, gross margin was even up 10 basis points on a like-for-like basis. And finally, on back-to-school, we continue to be a must-have brand for the school year, and we continue to see a very strong youth-driven demand in the U.S. Operator: Your next question comes from the line of Krisztina Katai, an equity research analyst. Krisztina Katai: Congrats on a good quarter. You provided helpful color that the shift toward closed-toe silhouettes created, I think, a roughly 40 basis point pressure on gross margin. Can you help us quantify that further? What is the difference in gross margin between closed-toe and open toe? And then secondly, maybe if you could provide more color on the components of growth this quarter just across ASPs and volume. Ivica Krolo: Krisztina, it's Ivica. Thank you for your question. And first, on the margin impact. So as you know, we don't disclose specific margin on a product level, but the complexity of higher ASP, non-Boston closed-toe shoes and boots executions require more labor input and consume more production minutes. So this quarter, we saw an over 500 basis points increase in our closed-toe share, and this is driven by over 50% growth in the non-Boston silhouettes with Naples units up more than 4x and Utti more than doubling year-over-year in Q3. That impacted the gross margin. These are great, highly profitable products, which are helping us to attract new consumers and broaden the usage occasions for the footbed. And they generate a higher ASP and profit dollars per pair, although a slightly lower but still very strong margin. And we use contract manufacturers in Portugal for some of their production. So in-sourcing parts of this production now, the demand is scaling is a future margin opportunity for us definitely. And then on your -- the second part of your question on ASP versus volume, it was very much in line with our 1/3, 2/3 target and reflects the continued build-out of our production capacity across the network, which is progressing according to plan. Operator: Your next question comes from the line of Michael Binetti with Evercore ISI. Unknown Analyst: It's Carson on here for Michael. Sorry to get into the nitty-gritty of the model, but can you walk us through the tax rate? It's coming in above the original guidance of 27% to 28%. Is this 30% to 31% the new baseline for taxes? And then I would have expected more upside to EPS for the year given the strong EBITDA outlook and share repurchase. Why aren't we seeing the flow-through to EPS? And then related to that, what's the normalized finance cost on a quarterly basis with the new debt issued? And then should we expect to see less volatility in total finance costs going forward? Ivica Krolo: Carson, thank you for your question. The first one on tax. No, we do not believe that 30% to 31% is the new baseline. Going forward, we expect a recurring tax rate in the high 20s. This year, it is elevated due to the nondeductible, nonrecurring, noncash finance expenses associated with the refinancing that we have completed over the course of Q3, the ASR and the mark-to-market valuations in the embedded derivative expenses. On EPS, this year will be impacted by this higher effective tax rate with a normalized tax rate, adjusted EPS growth would have been 23% in the third quarter. For the full year, the impact is about EUR 0.08 per share. To your last part of your question on the finance cost. This quarter, finance costs were impacted by, again, one-time noncash expenses related to the refinancing of EUR 11.7 million and the ASR of EUR 10.6 million. So we do not expect to incur these expenses going forward. What will result, however, in a recurring way and with a recurring change is the issuance of the new EUR 900 million senior notes and the repayment of the original close to EUR 430 million notes. This will increase interest expense within finance costs by approximately EUR 4.5 million per quarter and finance costs should normalize at around EUR 25 million per quarter. Overall, we expect volatility to decrease due to lower fluctuations in the embedded derivative resulting from the longer time to optional redemption of the new senior notes. Operator: Your next question comes from the line of Simeon Siegel with Guggenheim Securities. Simeon Siegel: Ivica, can you just speak to the spread between inventory and sales? How are you thinking about the composition of your inventory now? Maybe how the change in units versus euros? And how are you thinking about the go-forward inventory levels? And then just to clarify on the Australia timing shift. Did sales shift earlier into 2Q or later into 4Q? And is that change now behind us? Just curious how to think about the underlying comment you made or the underlying trends comment you made and the go-forward expectations. Ivica Krolo: Simeon, it's Ivica again. Thank you for your question. The first part on the inventory -- so as you are well aware, over 70% of our finished goods inventory is already contracted. Most of this inventory is core basically evergreen products, which don't go out of style and definitely allowing us for better preproduction and production balancing and definitely also helps our planning. More than half of the increase in our stock-to-sales ratio is attributable to FX and capitalized tariffs, and this is something that we've spoken about already in our earnings call in Q2. The other half is largely attributable to the consolidation of the Australia business and the timing of revenue recognition and sell-through of the inventory there. We're now running an onshore business and are more bound to the cadence of selling in the region itself. Operator: Your next question comes from the line of Adrien Duverger with Goldman Sachs. Adrien Duverger: Could you please comment a bit more on the performance in the U.S.? More specifically, how is the order book performing? Could you please comment maybe on the sell-in versus sell-out at your wholesale partners? I think you commented already that you have seen very good growth from these youth department stores and sporting goods. And also, yes, I guess, following up on the prior question, are you confident that there is no buildup of inventory anywhere in the wholesale channel? And is there anything you're seeing in terms of wholesale appetite for your products, I guess, as well in terms of consumer feedback? That would be super helpful. Ivica Krolo: Thank you very much, Adrien. It's Ivica again. So on your question with regards to U.S. B2B. And indeed, as Oliver said earlier in this call, we're continuing to see strong youth-led demand, and basically, this is the cohort that is highly growing and effectively being new to the brand. So this is what we call the footbed newbies. Sell-through across these channels in Q3 was up by 20% plus year-over-year. So continued strength we've observed for the last couple of quarters and very similar to what you have seen already before. With regards to back-to-school, as mentioned, we are one of the must-have brand. We have -- are continuing to see this youth-driven growth. And with regards to coming back again to the markdown activity, there is no change to our approach. And if we would be marking down, you would immediately see it in our gross margin, but you don't see it. It's just the opposite. You see an increase on a like-for-like basis, and this is what we will continue to build on. Operator: Your next question comes from the line of Ed Aubin with Morgan Stanley. Edouard Aubin: So just a question on China, actually. Obviously, your exposure to China is small. I think it was about 2% last year, but you mentioned on the call that you're growing about 50% year-over-year. Could you just update us on your plan to continue to grow in that market? And then just on production capacity because Oliver mentioned your sustained CapEx investment. I think on my estimates, you're going to be selling about 42 million pairs this year. When will you start to be thinking about building new factories or with the existing capacity, what could be the -- potentially the number of pairs you could be producing every year? Ivica Krolo: Edouard, it's Ivica. So the first part of your question on China. So the business there was up 50% in the quarter and was our largest market in APAC in Q3. And it's very much a premium market for us. It's high-quality retail-led growth with the highest ASP globally. We'll continue to follow the road map we outlined for the market at our Capital Markets Day in January. So this is including raising brand awareness through new stores, both company-owned and partner doors, local activation, brand-building events. So events do play a key role in increasing the brand awareness through the region, and this will be built up further. So the second part on your question, Edouard, with regards to build-out of capacity, especially with regards to production. So we are on track to deliver 10% unit growth, as we've said at our Capital Markets Day and the build-out of the entire manufacturing network, especially with regards to Wittichenau, but also Arouca in Portugal and Gorlitz is progressing according to plan, and we are well on track to deliver the target unit growth. Operator: Your next question comes from the line of Mark Altschwager with Baird. Mark Altschwager: I wanted to hit on capital allocation. You have another, I believe, EUR 500 million of liquidity for buybacks. How do you anticipate executing the additional buyback program going forward? The last one was the ASR, obviously, how are you thinking about that versus a regular ongoing buyback program? And relatedly, net leverage 1.8x today, guiding to 1.6x, 1.7x by year-end. Do you have a target leverage ratio? Or what is the leverage level you're going to run in order to complete the buyback program? Ivica Krolo: Mark, thank you for your question. It's Ivica again. And you are right, we have a significant cash balance from which we can execute additional buybacks, and we plan to do so. We will be responsive to capital market activity and make the decision how and when to utilize that cash based on a number of factors, including a potential liquidity events for our largest shareholder, the timing naturally of which we do not control. Ideally, we would utilize the cash as we did the EUR 200 million last year and buy shares as part of a larger transaction. So we do not further reduce our public float, which is, as you know, already very low. That said, as we did this year with our most recent ASR, we don't have to wait for a bigger transaction and we'll buy back from the public float if our Board decides that it's in the best interest of our shareholders. With regards to leverage, we do not have a specific leverage target set. We will keep our options open to allocate capital. However, it is in the best interest of our shareholders. Operator: Your next question comes from the line of Anna Andreeva with Piper Sandler. For now, we will move on to Dana Telsey from Telsey Advisory Group. Dana Telsey: Congratulations on the nice results. Oliver, as you think about the closed-toe penetration, which was up so nicely in the quarter, which typically is a summer quarter that's usually more sandals heavy. What was the growth in the sandals category? And the go forward, how do you think about product innovation and newness, whether in sandals or closed-toe and pricing? Oliver Reichert: Dana, it's Oliver again. Thank you for your question. As you know, our sandal business remains very strong, up mid- high-single digits in constant currency year-over-year. So sandals were particularly strong in our own D2C channel, driven by newness. There's no one else with the footbed and its benefits. So this is a category we own. It's not just Arizona, which is still growing and benefiting from newness. The Mayari, the Madrid and the Siena silhouettes performed particularly well this summer. The success of our closed-toe business, especially clogs has created true 4-season demand, reducing the seasonal dependence on sandals. This is not just the Boston, it includes the Naples, [indiscernible], Amsterdam and others, all of which are doing very well and building on our momentum in clogs. We are constantly driving newness and innovation in both open toe and closed-toe, growing our global fan base. We create new trends from within our brands to build and expand our archive and extend usage occasions. I mentioned 2 good examples of this in my opening comments, like the Santa Clarita and the Repetto collaboration to capture the increasing global demand for ballerinas. This will be -- don't forget this, this will be the trend for the next 3, 5 years, the Ballerinas for ladies. Operator: And with that, we have reached the end of the Q&A session. This concludes today's call. Thank you so much for attending. You may now disconnect. Before you buy stock in Birkenstock Plc, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Birkenstock Plc wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,621!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,314!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 20, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Birkenstock (BIRK) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by a successful transition to a four-season brand, with closed-toe penetration increasing 500 basis points as management expands usage occasions beyond traditional sandals. Direct-to-Consumer (DTC) growth of 16% outpaced wholesale for the first time in two years, fueled by a 50% increase in own retail revenue and high single-digit same-store sales. Management attributed the 23% constant currency growth in APAC to high-quality, premium positioning, specifically noting that China grew over 50% and now represents the company's highest Average Selling Price (ASP) market. Strategic scarcity and disciplined distribution maintained a 93% full-price realization in EMEA despite a broader market environment characterized by heavy promotional activity. Operational complexity from non-Boston closed-toe silhouettes created a slight margin drag, but management views this as a positive trade-off for higher absolute profit dollars per pair. The Americas business saw 20% plus sell-out growth at key youth and sporting goods partners, indicating successful brand resonance with younger 'footbed newbie' consumers. Full-year revenue guidance was raised to 15% constant currency growth, reflecting sustained momentum in digital conversion and retail footprint expansion. Management expects the APAC region to continue growing at twice the pace of other segments, supported by a retail-led strategy and localized brand activations in China. Future margin expansion is expected to come from in-sourcing production of complex closed-toe and boot executions currently handled by contract manufacturers in Portugal. The company plans to reach approximately 140 owned retail doors by the end of fiscal 2026 to capture more in-person shopping demand and enhance brand storytelling. Guidance assumes a blended tariff rate of just over 15% in Q4, which is expected to be relatively neutral year-over-year following new agreements with the European Union. Middle East conflicts resulted in higher logistics costs and localized demand impacts in the UAE, though management mitigated this by adjusting delivery routes. A significant increase in the inventory-to-sales ratio to 37% was primarily driven by capitalized tariffs, FX effects, and the consolidation of the Australia business. The effective tax rate was raised to 30%-31% for the year due to non-deductible expenses related to debt refinancing and an Accelerated Share Repurchase (ASR) program. Net leverage increased to 1.8x following share repurchases, though management has a net leverage target for the end of fiscal 2026 of 1.6x to 1.7x while seeking further buyback opportunities. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that DTC outperformance was driven by a faster store opening pace and improved digital storytelling that increased online conversion. Wholesale remains a critical 'efficient access' point for younger consumers, with youth-led demand showing no signs of slowing down. The 40 basis point drag from product mix is due to higher labor input and production minutes required for shoes and boots compared to sandals. Management emphasized that while the margin percentage is slightly lower, the higher ASP results in superior absolute profit per unit. Management dismissed concerns about promotional pressure, stating that 75% to 80% of the business is 'evergreen' core product that does not go out of style. Inventory increases were characterized as structural (tariffs/FX) rather than a buildup of slow-moving seasonal goods. Birkenstock has EUR 500 million in remaining liquidity for buybacks and will be 'responsive' to market conditions. Management prefers to execute buybacks alongside larger shareholder transactions to avoid further reducing the already low public float.

Birkenstock (BIRK) came out with quarterly earnings of $0.86 per share, missing the Zacks Consensus Estimate of $0.87 per share. This compares to earnings of $0.7 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -1.15%. A quarter ago, it was expected that this sandal maker would post earnings of $0.7 per share when it actually produced earnings of $0.59, delivering a surprise of -15.71%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Birkenstock, which belongs to the Zacks Shoes and Retail Apparel industry, posted revenues of $836.48 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.66%. This compares to year-ago revenues of $720.54 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Birkenstock shares have lost about 10.2% since the beginning of the year versus the S&P 500's gain of 13.2%. While Birkenstock has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Birkenstock was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.54 on $694.49 million in revenues for the coming quarter and $2.27 on $2.7 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Shoes and Retail Apparel is currently in the top 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Caleres Inc. (CAL), is yet to report results for the quarter ended July 2026. This footwear wholesaler and retailer is expected to post quarterly earnings of $0.38 per share in its upcoming report, which represents a year-over-year change of +8.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Caleres Inc.'s revenues are expected to be $705.67 million, up 7.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Birkenstock Holding PLC (BIRK) : Free Stock Analysis Report Caleres, Inc. (CAL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: EUR720 million in Q3 fiscal 2026, up 13% reported and 15% in constant currency. Adjusted EBITDA: EUR242 million, up 11% year over year; margin of 33.7%. Adjusted Net Profit: EUR134 million, up 15% year over year. Adjusted EPS: EUR0.74, up 19% from EUR0.62 a year ago. Adjusted Gross Profit Margin: 59.2%, down 130 basis points year over year. Segment Performance (Constant Currency): Americas up 14%, EMEA up 15%, APAC up 23%. Channel Performance: B2B up 15% in constant currency; D2C up 16% in constant currency. Own Retail Revenue: Up 50% in constant currency. Same-Store Sales: Up high single digits. Store Locations: Added 13 new owned stores, bringing total to 124. Operating Cash Flow: EUR247 million in the quarter. Cash and Cash Equivalents: EUR694 million at end of quarter. Net Leverage: 1.8x as of June 30, 2026. Inventory-to-Sales Ratio: 37% in the quarter. CapEx: EUR26 million spent during the quarter. Full-Year Guidance: Revenue growth of 15% in constant currency; adjusted EBITDA of at least EUR710 million. Warning! GuruFocus has detected 3 Warning Sign with BIRK. Is BIRK fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue grew 15% in constant currency, at the high end of the annual target, leading to a raised full-year guidance. Direct-to-consumer (D2C) growth accelerated to 16% in constant currency, outpacing B2B for the first time in two years. Own retail revenue surged 50% in constant currency, with same-store sales up high single digits, driven by rapid store expansion. APAC region grew 23% in constant currency, with China up over 50%, showcasing strong premium brand positioning. Adjusted EBITDA margin improved 60 basis points on a like-for-like basis, despite increased freight and logistics costs. Successful refinancing of senior notes at a 75-basis-point lower rate, reducing interest expense and enhancing financial flexibility. Strong product innovation, with non-Boston closed-toe silhouettes up over 50% and new styles like Naples and Utti performing exceptionally well. Full price realization remained high at 93% in EMEA, demonstrating brand strength and markdown discipline despite industry-wide promotional pressure. Adjusted gross profit margin declined 130 basis points year over year, pressured by FX and incremental US tariffs. Ongoing conflicts in the Middle East continue to impact the business, particularly in the UAE, with localized sales disruptions. Inventory-to-sales ratio increased to 37% from 33% a year ago, partly due to capitalized tariffs and FX effects. Effective tax rate rose to 30%-31% from prior guidance of 26%-28%, due to non-deductible expenses from the ASR and debt issuance. Net leverage increased to 1.8x from 1.5x at fiscal year-end 2025, reflecting cash outflows from the share repurchase. The shift to closed-toe silhouettes, while beneficial for ASP, creates a slight drag on gross margin due to manufacturing complexity. FX headwinds are expected to cause a 350-basis-point drag on full-year revenue growth, impacting reported results. The Australia business experienced a timing shift in revenue recognition, impacting APAC growth rates in the quarter. Q: Can you speak to the drivers of the improvement in direct-to-consumer (D2C) growth, which outpaced B2B for the first time in two years, and the potential upside to the raised 15% top-line forecast? A: Oliver Reichert (CEO) stated that D2C outperformed B2B, driven by investments in owned retail and digital. Owned retail delivered 50% growth due to an expanded footprint and faster store openings, with same-store sales up high single digits. Online growth accelerated due to improved product newness, personalization, and storytelling, particularly in Europe, which saw a clear step-up in performance with 93% full-price realization. He emphasized that both channels remain important, with B2B providing efficient access to new, younger consumers. The 15% constant currency revenue growth guidance reflects the strength seen across channels and markets, and the company feels very confident about its momentum. Q: Can you provide additional color on the key drivers behind the acceleration in EMEA growth, the impact from the Middle East conflict, and whether these trends have continued into Q4? A: Ivica Krolo (CFO) explained that while the Middle East conflict continued to have an impact, it was less pronounced than in Q2. The company mitigated pressure through adjusted delivery routes and strength in other markets like Saudi Arabia. The growth acceleration was largely driven by resilient D2C demand in both retail and online, benefiting from investments in upper-funnel marketing, content, and in-store experience. While warmer weather was favorable, improved trends were seen ahead of it and have continued into the first weeks of Q4. The total second-half impact from the conflict is now expected to be below the original EUR10-12 million estimate, at high single-digit millions. Q: Pricing over inflation was not a contributor to gross margin this quarter. Were you more promotional, and how should we think about your ability to pass inflation through with pricing given consumer price sensitivity? A: Ivica Krolo (CFO) clarified that all pricing decisions are made to pass through inflation and protect gross margin, noting a 30-basis-point benefit from pricing over inflation this quarter. While the industry saw higher markdown activity, Birkenstock continued to deliver superior full-price realization and gross margin, which underscores brand strength and markdown discipline. Any selective discounting is for managing seasonal excess stock, centered on prior-season merchandise and broken size runs. The brand's broad price range (from $50 to $1,500) keeps it accessible, and actions taken have not negatively impacted margins, with gross margin up 10 basis points on a like-for-like basis. Q: Can you help quantify the gross margin pressure from the shift toward closed-toe silhouettes and provide more color on the components of growth between ASPs and volume? A: Ivica Krolo (CFO) stated that while specific product-level margins are not disclosed, higher-ASP non-Boston closed-toe shoes and boots require more labor and production minutes. The over 500-basis-point increase in closed-toe share, driven by over 50% growth in non-Boston silhouettes (Naples units up 4x, Utti more than doubling), impacted gross margin. However, these products generate higher ASP and gross profit per pair. On growth components, the quarter was in line with the one-third ASP, two-thirds volume target, reflecting the continued build-out of production capacity. Q: Is the elevated tax rate of 30% to 31% the new baseline, and why isn't the strong EBITDA outlook flowing through to EPS? What is the normalized finance cost with the new debt? A: Ivica Krolo (CFO) said the 30% to 31% rate is not the new baseline, expecting a recurring rate in the high 20s. This year's rate is elevated due to non-deductible, non-recurring, non-cash finance expenses from the refinancing and ASR. With a normalized tax rate, adjusted EPS growth would have been 23% in Q3, with a full-year impact of about EUR0.08 per share. Finance costs were impacted by one-time expenses (EUR11.7 million from refinancing, EUR10.6 million from ASR), which will not recur. However, the new EUR900 million notes will increase recurring interest expense by approximately EUR4.5 million per quarter, normalizing finance costs at around EUR25 million per quarter. Q: Can you speak to the spread between inventory and sales, the composition of inventory, and clarify the Australia timing shift? A: Ivica Krolo (CFO) explained that over 70% of finished goods inventory is contracted, mostly core, evergreen products. More than half of the increase in the stock-to-sales ratio is attributable to FX and capitalized tariffs, with the other half largely from consolidating the Australia business and the timing of revenue recognition. The Australia shift is due to the transition from a distributor model to an on-floor business, which is now more bound to local selling cadence, with the spring/summer peak season aligning with Q1 and Q4. Q: How is the order book performing in the US, and are you confident there is no buildup of inventory in the wholesale channel? A: Ivica Krolo (CFO) confirmed continued strong youth-led demand in the US B2B channel, with sell-through up over 20% year over year in Q3. Birkenstock remains a must-have brand for back-to-school, driving this youth-led growth. He reiterated that there is no change to the markdown approach; any increase in markdown activity would be immediately visible in gross margin, but instead, the company saw an increase on a like-for-like basis, indicating no inventory buildup issues. Q: Can you update us on your plan to continue growing in China, and when will you start building new factories given the sustained CapEx investment? A: Ivica Krolo (CFO) noted that China was the largest market in APAC in Q3, with business up 50%, representing high-quality, retail-led growth with the highest ASP globally. The company will follow its Capital Markets Day roadmap, including raising brand awareness through new stores, local activations, and brand-building events. On capacity, the company is on track to deliver 10% unit growth, with the build-out of the manufacturing network in Wittichenau, Arouca, and Gorlitz progressing according to plan. Q: How do you anticipate executing the additional EUR500 million buyback program, and do you have a target leverage ratio? A: Ivica Krolo For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Birkenstock Holding PLC? Here are five stocks we like better. Birkenstock raised its fiscal 2026 outlook after third-quarter revenue rose 13% reported and 15% in constant currency to €720 million. Full-year constant-currency revenue growth is now expected at 15%, with adjusted EBITDA of at least €710 million. Direct-to-consumer sales accelerated 16% in constant currency, supported by digital improvements and store expansion; owned retail revenue jumped 50% after the company opened 13 stores. Regional growth was broad, led by APAC at 23% and China at more than 50%. Profitability faced pressure from foreign exchange and U.S. tariffs, which reduced adjusted gross margin to 59.2%, though adjusted EBITDA increased 11% to €242 million. Birkenstock also repurchased €230 million of shares and retains flexibility for up to €500 million in additional buybacks or refinancing. Top Consumer Discretionary Brands Add Buyback Capacity Amid Weakness Birkenstock (NYSE:BIRK) raised its fiscal 2026 outlook after reporting third-quarter revenue growth at the high end of its annual target range, supported by broad regional demand, accelerating direct-to-consumer sales and expansion of its owned retail footprint. For the quarter ended June 30, revenue totaled €720 million, up 13% on a reported basis and 15% in constant currency. Chief Financial Officer Ivica Krolo said currency movements, including depreciation in the U.S. dollar, Canadian dollar, Japanese yen and Indian rupee against the euro, reduced reported revenue growth by 180 basis points. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be Growth Picks: 3 Low-Cost Stocks That Could Double in Value The company now expects full-year constant-currency revenue growth of 15%, at the top end of its previous 13% to 15% range, and adjusted EBITDA of at least €710 million. Birkenstock expects fourth-quarter constant-currency revenue growth to remain within the 13% to 15% range, with foreign exchange effects expected to be relatively neutral. Direct-to-consumer revenue rose 16% in constant currency during the third quarter, outpacing 15% growth in business-to-business revenue. DTC growth accelerated from 12% in the prior quarter, which Krolo attributed to gains in digital conversion and continued store expansion. → Nebius’ Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand After Earnings Beats, These 3 Stocks Are on Analysts’ Radars The company opened 13 owned stores during the quarter, bringing its total to 124. Owned retail revenue increased 50% in constant currency, while same-store sales rose by a high-single-digit percentage. Chief Executive Officer Oliver Reichert said investments in new stores, digital content, personalization, checkout options and loyalty benefits supported the DTC performance. He said the company also maintained a disciplined wholesale strategy, with youth-focused retailers and sporting-goods stores leading B2B growth. Sell-through at key partners in those channels increased more than 20% year over year, according to management. → On Holding's Price Stumble May Be an Opening for a Company Built to Run Birkenstock reported 14% constant-currency growth in the Americas, where it opened four U.S. stores to bring its U.S. total to 21. EMEA revenue increased 15%, aided by stronger online and retail demand in Europe and 93% full-price realization. The company opened four EMEA locations during the quarter, bringing the regional total to 50. APAC revenue climbed 23% in constant currency, or nearly 30% excluding Australia. Management said Australia’s quarterly comparison was affected by a shift in revenue timing following the acquisition of its distributor, as sales are now recognized based on local market seasonality rather than distributor deliveries. China grew more than 50% and was Birkenstock’s largest APAC market during the quarter, Krolo said, with the highest average selling price globally. Management highlighted continued momentum in closed-toe footwear, which helped expand the brand’s appeal across seasons. Non-Boston closed-toe styles grew more than 50%, while Naples unit sales rose more than fourfold and Utti unit sales more than doubled from a year earlier. About half of Birkenstock’s top 20 silhouettes are now closed-toe, including three introduced over the past three years. Reichert said the company also saw solid sandal demand, with mid- to high-single-digit constant-currency growth. New seasonal executions, including flowers, rivets, buckles, prints and textiles, supported demand, particularly for Mayari, Madrid and Siena styles. The shift toward more complex closed-toe footwear carried a modest margin impact because those products require more labor and production time. Krolo said, however, that they generate higher average selling prices and higher gross profit per pair despite a somewhat lower gross-margin percentage. Product mix contributed more than half of the increase in average selling price, and the company said quarterly growth was in line with its long-term target of roughly one-third average selling price growth and two-thirds unit growth. Adjusted gross margin was 59.2%, down 130 basis points from a year earlier. Krolo said foreign exchange reduced gross margin by 60 basis points and incremental U.S. tariffs accounted for another 70 basis points of pressure. Excluding those factors, adjusted gross margin increased 10 basis points. Adjusted EBITDA rose 11% to €242 million, while adjusted EBITDA margin was 33.7%, down 70 basis points. Excluding foreign exchange and tariff effects, adjusted EBITDA margin would have increased 60 basis points year over year, the company said. Adjusted net profit rose 15% to €134 million, and adjusted earnings per share increased 19% to €0.74. The quarter included non-cash finance costs tied to debt refinancing and the company’s accelerated share repurchase, which were excluded from adjusted net profit. Full-year adjusted gross margin is expected to be 57% to 57.5%. Full-year adjusted EBITDA margin is expected to be 30.2% to 30.5%, including about 200 basis points of combined pressure from foreign exchange and U.S. tariffs. Full-year adjusted EPS guidance remained €1.90 to €2.05. The expected tax rate was raised to 30% to 31% from 26% to 28%, largely because of non-tax-deductible expenses related to the share repurchase and debt issuance. Birkenstock generated €247 million in operating cash flow during the quarter and ended June with €694 million in cash and cash equivalents after repurchasing €230 million of shares and refinancing its senior notes. In June, the company repaid €428.5 million of 5.25% notes due in 2029 and issued €900 million of 4.5% senior notes due in 2033. Krolo said the company has flexibility for an additional €500 million of share repurchases or other debt refinancing, subject to market conditions. Net leverage was 1.8 times at quarter-end, or about 1.4 times excluding the accelerated share repurchase. Management expects year-end leverage of roughly 1.6 to 1.7 times after the repurchase’s impact. Capital expenditures totaled €26 million in the quarter for production capacity, retail and technology investments. Birkenstock said its manufacturing expansion in Arouca, Görlitz, Pasewalk and Wittichenau remains on track to support 10% unit growth, while full-year capital expenditures are expected to total €110 million to €130 million. Birkenstock Group AG, listed on the New York Stock Exchange under the symbol BIRK, is a global footwear manufacturer renowned for its anatomically contoured footbeds and iconic sandal designs. The company’s core product lines include classic models such as the Arizona, Boston and Madrid, alongside a range of clogs, shoes and orthotic insoles. In addition to footwear, Birkenstock offers complementary accessories, including socks and leather care products, reinforcing its commitment to foot health and comfort. Birkenstock reaches consumers through a diversified distribution network that combines direct-to-consumer channels—such as branded retail stores and e-commerce platforms—with wholesale partnerships spanning specialty footwear retailers, department stores and select online marketplaces. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Birkenstock Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Birkenstock (BIRK) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 13. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This sandal maker is expected to post quarterly earnings of $0.87 per share in its upcoming report, which represents a year-over-year change of +24.3%. Revenues are expected to be $823.02 million, up 14.2% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 1.04% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Birkenstock, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +1.04%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that Birkenstock will most likely beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Birkenstock would post earnings of $0.7 per share when it actually produced earnings of $0.59, delivering a surprise of -15.71%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Birkenstock appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Birkenstock Holding PLC (BIRK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Heading into the summer selling season, overall industry growth for footwear appears to be slowing for a number of reasons. However, there are some standouts, including continued acceleration for Adidas, On and the Arc’teryx and Salomon brands. The latter two are part of the Amer Sports umbrella. That said, the perceived slowdown appears to center primarily in direct-to-consumer (DTC) sales, particularly in the U.S. market, and could see lower sales down the road for Birkenstock, Deckers and Crocs. And Nike, an ongoing turnaround story, doesn’t report fourth quarter earnings until June 30, but some analysts continue to take a cautious view of the company believing that a turnaround could take longer than initially expected. More from WWD Why Olivia Wilde's Low-profile Black and White Sneakers Are Going to Be Everywhere by Next Year AI Could Boost European Retail By More Than $360 Billion Puma Could Be Back in Growth Mode by Late 2027, Thanks to Anta Below are some of the key points and concerns noted by Wall Street analysts in their recent research notes and other data points tracked for shoe brands. Drake MacFarlane, research analyst at global data analytics firm M Science, a division of the Jefferies Financial Group Inc., sees Adidas as the winner in the ultra-low profile category, given its predominance in the sneaker trend. “Adidas spending growth accelerated in our [proprietary] e-receipt data in May, supported by the DTC channel, particularly in the U.S.,” MacFarlane said, noting “particularly positive trends for Samba, both in the DTC and wholesale channels, driven by the salience of the Samba Jane product model.” The Samba Jane is part of the ultra-low profile trend that M Science has been tracking industry-wide. “Within our consumer transaction data, we observe both in-store and online spending growth accelerating for Addidas from April to May,” the M Science analyst said. He also noted that while there were first-quarter declines in Terrace sell-through, driven primarily by Gazelle, the slowdown is less pronounced in the second quarter. “Indeed, within the DTC channel, the Samba Jane is the primary driver of an observed reacceleration in Terrace year-over-year growth” in Q2 relative to Q1. The thick-soled or “chunky” style shoe trend has been ongoing over the past several years, and MacFarlane said he and his team plans to continue to track what appears to be an emerging low-profile trend. Thus far, Footwear News is seeing an increase in the low-profile, with New Balance’s hit low-profile sneaker — the 204L — now released in five new colorways and material options for summer. And on Tuesday, actress Olivia Wilde ditched high heels for “The Invite” press tour when she sat down for an interview with Seth Meyers wearing a pair of low-profile black-and-white Onitsuka Tiger Mexico 66 sneakers. Other brands and celebs are getting into the low-profile movement too. Rihanna seems to have picked the Nike x Jacquemus Moon Shoes SP as her “it” shoe for this summer. Last November saw Zadig & Voltaire bring the western shoe trend into the low-profile silhouette, while earlier this year Marc Jacobs updated the retro bowling shoe as the designer’s latest sneaker launch. The brands expected to see continued acceleration include On Holding and Arc’teryx and Salomon parent Amer Sports. Telsey Advisory Group’s Cristina Fernández sees upside to On’s 2026 revenue guidance, citing to the brand’s pricing power, ongoing high full price selling and benefits of scale. “Overall, we continue to see plenty of room for On to drive profitable growth ahead,” the Telsey analyst said, citing product innovation, 20 to 25 annual store openings, annual wholesale door growth at between 5 percent to 6 percent, and expansion in underpenetrated markets across Asia, parts of Europe and Latin and South America. “On’s brand is gaining heat with younger consumers,” noted UBS analyst Jay Sole, after the brand’s management in a first quarter conference call said that the share of consumers between ages 18 to 24 significantly grew within the company’s DTC customer base. Sole’s conclusion: “We believe On’s expanding reach with this younger demographic is an underappreciated long term growth driver.” Another plus for the On brand could be management’s cautious outlook, maintaining full-year sales outlook, excluding foreign exchange, at up 23 percent even after delivering a 26 percent-plus topline growth in the first quarter. “We view this as a sign of management’s caution given the uncertain macro environment, rather than an indication of weaker demand expected in the second half of 2026,” Sole concluded. “We believe the company’s brand building investments and healthy product pipeline should continue to support topline momentum.” At Amer Sports, chief financial officer Andrew Page told Footwear News last month when the company posted first quarter earnings results that the company is set to gain from the outdoor “tailwind” as people prioritize health and wellness. “As long as we continue to remain focused and continue to build these technically superior products for the core athlete, I think it has this compounding halo impact to the broader population,” Page said. He added that the thesis for the compounding halo impact will continue through 2026, 2027 and possibly beyond. UBS’ Sole has reiterated his “Buy” rating on shares of Amer, calling it one of softlines “most compelling growth stocks.” For Sole, the Arc’teryx and Salomon brands have “strong long-term growth opportunities.” “We expect Arc’terys to gradually expand distribution along retail partners to reach locations where it would not traditionally open stores, such as places near ski resorts,” Sole said. “We also think the company’s expansion into footwear should open more wholesale door opportunities, especially given the brand’s repositioning as a more premium player.” Currently the plan is to open 30 to 35 net new stores for Arc’teryx, up from the prior outlook of about 25 net new stores. At Salomon, the brand continues with its epicenter store strategy and is expected to include more cities in the U.S. and in Europe. The brand is also planning on more store openings in China, with bigger store footprints, which Sole sees as a plus. And adding to the growth opportunity are plans to rollout Salomon across U.S. wholesale, including retailers such as REI and Nordstrom, as well as expansion into athletic specialty doors that include a combined 100 doors via Foot Locker and JD Sports. “Importantly, we believe DTC will likely prevail as the key growth driver by channel as the brand carefully balances shelf space expansion with sell-through,” Sole concluded. For some brands, muted DTC trends could be a drag on sales. For the most part, analysts are upbeat on the Birkenstock brand. Telsey Advisory’s Group’s Dana Telsey, Jefferies retail analyst Randal Konik and Williams Trading analyst Sam Poser all having “Buy” ratings on shares of Birkenstock. That said, Poser did have one point of caution. “We remain confident that Birkenstock’s business in the America’s is healthy,” he said, noting that opportunities in China, India and Japan “are great” and will be driven by the brand’s premium product. “We remain concerned that the Birkenstock brand is not being managed to its full potential in the EMEA” region, he said. EMEA includes Europe, the Middle East and Africa. The expectation is that there could be continued deceleration in the European market due to weaker consumer outlook. A second concern is the conflict in the Middle East, which had impact the deliver of product to the region. And while there is now an interim memorandum of understanding between the U.S. and Iran to end the war and put in place a ceasefire, there are already concerns on the political front that tougher talks to reach a final agreement might not be obtainable within 60-day required timeframe. William Blair analyst Sharon Zackfia cited two key risks: the potential for higher markdowns should Birkenstock sales soften in key markets and an “intense competitive environment with copycat products” that are “often at lower prices.” On the DTC front, MacFarlane, the M Science analyst, saw soft trends across the U.S. in both wholesale and direct channels for Birkenstock during May based on his firm’s proprietary e-receipt data, and believes momentum appears weak heading into June. That data points were for both closed- and open-toe product segments, he noted. MacFarlane also cited to muted trends for Deckers — slightly for the Hoka brand and more so for Ugg in the U.S. DTC channel due to soft trends for the Golden franchise. He sees that as a risk to consider, but noted that there could be some offset as the brand appears to be having solid growth for franchises like the Lowmel and Scuff styles. Another brand he raised cautionary concerns is Crocs, due to sales softening in the U.S. for “crocs.com and slowdowns on Amazon, offsetting still positive contribution from TikTok Shop.” The M Science analyst said he’s seeing a “similar dynamic in our European e-receipt visibility, with trends also slowing in May as well for the direct channel.” For now, there appears to be positive spending indications for European in-store, but current trends are unclear as data points are still being compiled. For the Hey Dude brand, spending appears to be slowing within the DTC channel, but less so in the wholesale channel. Given some of the issues and general concerns in EMEA and what appears to be slowing DTC sales in the U.S., MacFarlane believes direct to consumer is underperforming relative to the wholesale channel. He also attributed the sales dynamic in Europe as being under pressure “given Nike weakness in the region.” When Nike reported third quarter results on March 31, its problems in China were in the spotlight, with weakness in Europe a new front to worry about. Third quarter results saw revenues drop 7 percent in the EMEA region due to softness in its sportswear offering and promotional retail environment. But it isn’t just Nike that’s seeing a slowing of sales in the region. BNP Paribas equity research senior analyst Laurent Vasilescu issued a note where he concluded that there’s softness in lifestyle sneaker demand across Europe and he doesn’t think a near-term recovery is on the way for the category. According to the analyst, lifestyle footwear — primarily sneakers — accounted for 18 percent to 19 percent of 2025 sales at leading sporting goods retailer Sport 2000, down from 25 percent in 2024. And based on a series of calls with Sport 2000’s commercial director and senior executive Dieter Schott, the segment is under pressure amid elevated inventory levels and heavy promotion that has continued into the first half of 2026. Sporting Goods has 3,000 locations that generated 5.3 billion euros in revenue in 2025. There’s also concern that Adidas is seeing broader softness in lifestyle sneaker demand. That’s something that Adidas chief executive Bjørn Gulden noted on March 4 during a fourth quarter report when the German sports brand forecast that growth would slow in 2026, with the CEO citing to “a lot of red-marked product.” He explained the reference was about the discounts retailers were offering because of fear of losing top-line momentum. And Vasilescu noted that the slowdown in lifestyle sneaker momentum seems to match the “recent return to dress trend with consumer preferences shifting toward dressier silhouettes like ballet flats and Mary Janes.” Best of WWD Zendaya's Best Christian Louboutin 'So Kate' Heels Moments All the Retailers That Nike Left and Then Went Back Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Sign up for FN's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.

This article first appeared on GuruFocus. Revenue: EUR680 million, growth of 8% on a reported basis, 14% in constant currency. Adjusted EBITDA: EUR198 million, down 1% year-over-year; excluding FX impact, up 13%. Adjusted EBITDA Margin: 32.1%, down 270 basis points year-over-year; excluding FX and tariff impacts, would have been 35.4%. Gross Profit Margin: 53.9%, down 380 basis points year-over-year; adjusted gross profit margin 54.6%, down 310 basis points. Adjusted Net Profit: EUR93 million, down 10% year-over-year. Adjusted EPS: EUR0.50, down 9% from EUR0.55 a year ago. Operating Cash Flow: EUR29 million, compared to a use of EUR18 million in Q2 2025. Cash and Cash Equivalents: EUR201 million at the end of the quarter. Inventory to Sales Ratio: 39%, up from 36% a year ago. CapEx: EUR21 million spent during the quarter. Net Leverage: 1.7x as of March 31, 2026, up from 1.5x at September 30, 2025. Store Locations: Opened 5 new owned retail doors, total globally 111; target of 140 doors by end of fiscal 2026. Same-Store Sales: Up double digits, accelerating from the first quarter. APAC Growth: Up 30% in constant currency. Americas Growth: Up 14% in constant currency. EMEA Growth: Up 11% in constant currency. Warning! GuruFocus has detected 2 Warning Sign with BIRK. Is BIRK fairly valued? Test your thesis with our free DCF calculator. Release Date: May 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Birkenstock Holding PLC (NYSE:BIRK) reported a strong revenue growth of over 14% in constant currency, within their target range of 13%-15%. The company's adjusted EBITDA margin remained robust at over 32%, despite challenges from FX and tariffs. APAC region showed impressive growth, doubling the pace of other regions, with a 30% increase in constant currency. The direct-to-consumer (D2C) business saw significant growth, with own retail increasing over 60% in constant currency. Birkenstock Holding PLC (NYSE:BIRK) opened 5 new retail stores, bringing the global total to 111, and is on track to meet its target of 140 stores by the end of fiscal 2026. The company faced significant headwinds from the depreciation of the US dollar, Canadian dollar, and Asian currencies, which negatively impacted revenue growth by 640 basis points. Gross profit margin decreased by 380 basis points year-over-year, with adjusted gross profit margin down 310 basis points. Adjusted net profit fell by 10% year-over-year, with adjusted EPS down 9% from the previous year. The ongoing conflicts in the Middle East have disrupted supply chains, reducing EMEA revenue by about EUR6 million and growth by 300 basis points. Tariff increases have added pressure on margins, with tariffs now 10 percentage points higher than pre-Liberation Day levels. Q: Oliver, first half revenue growth averaged 15%. Full year reiterated forecast calls for 13% constant currency growth in the back half. Could you elaborate on the impact that you're seeing today, where you cited the more muted consumer sentiment in Europe tied to higher energy costs and inflation? A: Oliver Reichert, CEO: We're not seeing any slowdown in the second half of fiscal 2026. Demand remains strong despite headwinds from conflicts, inflation, FX, and tariffs. We own most of our supply chain, which shields us from global disruptions. We are conservative in our guidance due to uncertainties, especially in EMEA, but confident in our 13% to 15% growth target. Q: Can you quantify the ongoing risk of exposure in the Middle East region for the rest of the fiscal year? Should we be lowering our EMEA growth rate for 3Q and 4Q? A: Nico Bouyakhf, President - EMEA: We saw a EUR6 million revenue impact due to the Middle East situation, equaling a 300 basis points headwind. We anticipate ongoing direct impacts in our Middle East business but are exploring measures to offset this risk. We identified approximately EUR10 million to EUR12 million of revenue risk in EMEA, which we believe we can offset with other regional segments. Q: What about the COGS side? What's the impact of energy and other inflation on your business? A: Ivica Krolo, CFO: Higher inflation impacts energy, freight rates, and raw materials, especially petroleum-based materials. Our strong inventory position mitigates exposure. We address input cost inflation in our pricing decisions, and there's no impact on margin guidance for fiscal 2026. Q: You mentioned tariffs are now 10 percentage points higher versus pre-Liberation Day. If this structure holds, what's the impact on gross margin guidance, and how quickly can you raise prices to offset the margin dollars associated with the new tariffs? A: Ivica Krolo, CFO: If the current tariff structure holds, we could see additional margin pressure in Q4. However, our strong inventory position should keep us within our targeted margin range. Our pricing is targeted and granular to protect margins and pass through higher costs. Q: With the additional stores and the investments in digital, should we expect to see an acceleration in DTC in the second half of the year? A: Nico Bouyakhf, President - EMEA: Our own physical retail will continue to be our fastest-growing channel. We expect to reach around 140 stores by the end of the year. We are increasing investments in digital, particularly in social media, to capture demand and drive retention with our membership base. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Birkenstock Holding PLC? Here are five stocks we like better. Birkenstock posted 8% reported revenue growth to EUR 680 million in fiscal Q2, with 14% constant-currency growth, and management said demand remained strong despite tariffs, inflation and conflict-related disruption. Margins were pressured by foreign exchange and tariffs: adjusted EBITDA fell 1% to EUR 198 million, adjusted EBITDA margin slipped to 32.1%, and adjusted gross margin declined to 54.6%. Growth was broad-based but led by APAC (+30%), while the company also reiterated full-year guidance for 13% to 15% constant-currency revenue growth and said it still plans $200 million in share repurchases this fiscal year. Growth Picks: 3 Low-Cost Stocks That Could Double in Value Birkenstock (NYSE:BIRK) reported fiscal second-quarter revenue growth within its target range on a constant-currency basis, while management said foreign exchange, tariffs, inflation and disruptions tied to conflict in the Middle East weighed on reported results and margins. The footwear company generated second-quarter revenue of EUR 680 million for the period ended March 31, 2026, up 8% on a reported basis and 14% in constant currency. Chief Executive Officer Oliver Reichert said demand for the brand remained strong despite a more difficult macroeconomic backdrop, including higher energy costs, elevated inflation and tariff uncertainty. → Rocket Lab Just Hit a New All-Time High—Time to Buy or Let It Breathe? After Earnings Beats, These 3 Stocks Are on Analysts’ Radars “In this challenging environment, we performed strongly,” Reichert said. “We once again demonstrated the resilience of our business model.” Adjusted EBITDA was EUR 198 million, down 1% from a year earlier, primarily because of tariffs and currency translation effects. Chief Financial Officer Ivica Krolo said foreign exchange reduced adjusted EBITDA by EUR 27 million; excluding that impact, adjusted EBITDA would have risen 13%. Adjusted EBITDA margin was 32.1%, down 270 basis points year over year. → MercadoLibre Boldly Invests in Growth: Discount Deepens These 3 Retail Stocks Can Keep Winning in 2025 Krolo said the depreciation of the U.S. dollar, Canadian dollar and Asian currencies against the euro created a 640-basis-point headwind to reported revenue growth in the quarter. The company’s adjusted gross profit margin was 54.6%, down 310 basis points from a year earlier. Excluding 230 basis points of pressure from foreign exchange and 90 basis points from incremental U.S. tariffs, adjusted gross profit margin would have been up 10 basis points, Krolo said. Adjusted net profit fell 10% to EUR 93 million, while adjusted earnings per share declined to EUR 0.50 from EUR 0.55 a year earlier. Krolo said adjusted net profit and EPS were affected by EUR 17 million, or EUR 0.09 per share, from currency translation and by a EUR 15 million non-cash expense, or EUR 0.08 per share, tied to a change in the valuation of an embedded derivative in the company’s senior notes. → MP Materials Is Quietly Building a Rare Earth Powerhouse During the question-and-answer session, Krolo said current tariff rates are “just over 20%,” including temporary Section 122 tariffs, following a U.S. Supreme Court ruling related to IEEPA tariffs. He said the company estimates refund claims at about EUR 30 million, but timing remains uncertain because of the administrative process for customs refunds. Birkenstock reported constant-currency growth across all three of its regional segments. The Americas grew 14%, EMEA increased 11% and APAC rose 30%. Reichert said APAC grew at more than twice the pace of the company’s other regions, in line with plans. Growth was strongest in India, China and Japan, and the region had the highest closed-toe penetration and average selling price in the quarter, according to management. In the Americas, Reichert said growth was driven by strong business-to-business performance and sell-through at partner doors, which was up more than 30% at key partners. He cited youth retailers and sporting specialty retailers as continuing to lead B2B growth. The company added two new stores in the Americas during the quarter, bringing its total in the region to 17. In EMEA, management said growth was held back by conflict in the Middle East. Reichert estimated the direct and indirect effects reduced EMEA revenue by about EUR 6 million and lowered growth by roughly 300 basis points. Nico Bouyakhf, president of EMEA, said roughly half of the impact came from the company’s inability to complete shipments into the Middle East, while the other half reflected weaker European consumer sentiment, reduced tourism in key cities and inflationary pressure. Bouyakhf said the company has identified approximately EUR 10 million to EUR 12 million of revenue risk in EMEA for the second half of the fiscal year, but management believes it can offset that risk with other regional segments. By channel, B2B revenue increased 15% in constant currency, while direct-to-consumer revenue rose 12%. Krolo said B2B growth remained stronger than DTC as consumers, particularly younger newer customers, continued to prefer shopping in stores. Birkenstock’s owned retail business grew more than 60% in constant currency, and same-store sales increased by double digits. The company opened five owned retail locations in the quarter, bringing its global total to 111. Management said Birkenstock remains on track to reach about 140 owned retail stores by the end of fiscal 2026. Bouyakhf said owned physical retail is expected to remain the company’s fastest-growing channel. He added that newer stores continue to outperform the longer-standing fleet, with higher average selling prices, more units per transaction and higher transaction values, while still meeting the company’s targeted 12- to 18-month return on capital expenditure. The company also continued to develop its closed-toe business. Reichert said closed-toe penetration increased by 300 basis points, driven by strong growth in clogs. In response to an analyst question, Bouyakhf said Boston and its variations remain a major part of closed-toe sales, but non-Boston silhouettes are growing at a much faster pace. He said 11 of the company’s top 20 styles are currently closed-toe products. Birkenstock generated EUR 29 million in operating cash flow in the quarter, compared with a use of EUR 18 million in the prior-year period. The company ended the quarter with EUR 201 million in cash and cash equivalents. Inventory as a percentage of sales rose to 39% from 36% a year earlier. Krolo said the increase was primarily due to currency effects, and that on a constant-currency basis the ratio was 37%. He also attributed the increase to higher work in progress as the company pre-produces semi-finished goods, particularly clogs, to reduce bottlenecks in final assembly. Capital expenditures totaled EUR 21 million in the quarter, including investments in production capacity in Arouca, Görlitz, Ströth and Pasewalk, the beginning of the build-out of Wittichenau, and continued spending on retail and information technology. Net leverage was 1.7 times as of March 31, up from 1.5 times at the end of fiscal 2025, which Krolo attributed to normal cash seasonality. Birkenstock reiterated its fiscal 2026 guidance for constant-currency revenue growth of 13% to 15%. The company expects foreign exchange to create a roughly 350-basis-point headwind to full-year revenue growth, resulting in reported revenue growth of 10% to 12% and revenue of EUR 2.3 billion to EUR 2.35 billion. The company continues to expect adjusted gross margin of 57% to 57.5%, including 200 basis points of combined pressure from foreign exchange and U.S. tariffs. Adjusted EBITDA is expected to be at least EUR 700 million, implying an adjusted EBITDA margin of 30% to 30.5%. Adjusted EPS is forecast at EUR 1.90 to EUR 2.05, including roughly EUR 0.15 to EUR 0.20 of pressure from foreign exchange. Management also reaffirmed plans to repurchase shares for total consideration of $200 million during fiscal 2026, subject to market conditions. Krolo said the company had not yet used the authorization and would consider all available options, including open-market repurchases, as it enters a seasonally stronger cash generation period. “We are confident in our business model and its resilience, even in the face of pressures from war, inflation, tariffs and FX,” Reichert said. Birkenstock Group AG, listed on the New York Stock Exchange under the symbol BIRK, is a global footwear manufacturer renowned for its anatomically contoured footbeds and iconic sandal designs. The company’s core product lines include classic models such as the Arizona, Boston and Madrid, alongside a range of clogs, shoes and orthotic insoles. In addition to footwear, Birkenstock offers complementary accessories, including socks and leather care products, reinforcing its commitment to foot health and comfort. Birkenstock reaches consumers through a diversified distribution network that combines direct-to-consumer channels—such as branded retail stores and e-commerce platforms—with wholesale partnerships spanning specialty footwear retailers, department stores and select online marketplaces. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Birkenstock Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.