Birkenstock, the renowned footwear company known for its comfortable cork sandals, recently announced robust sales figures for the Christmas holiday season. However, despite the positive performance, the company chose not to adjust its earnings projections, citing concerns over potential economic headwinds such as tariffs and fluctuating currency exchange rates.
CEO Oliver Reichert, during a post-earnings call with analysts, acknowledged the strong order book but emphasized the prevailing macroeconomic uncertainties. He specifically highlighted concerns surrounding interest rate fluctuations, currency movements, and the potential impact of tariffs. “The potential impact on the global economy and the global consumer is highly uncertain,” Reichert stated. Following the announcement, Birkenstock shares experienced a slight dip in early trading on the New York Stock Exchange.
A significant portion of Birkenstock’s production takes place in Germany, making the company vulnerable to potential reciprocal tariffs threatened by the U.S. While the company did not disclose specific U.S. sales figures, the Americas region contributed a substantial 58% of its total revenue in the first fiscal quarter ending December 31st.
The company’s wholesale business, encompassing sales through department stores and major retailers like Nordstrom and Footlocker, outpaced sales at Birkenstock’s own retail locations during the October-December quarter. This contributed to a lower gross profit margin compared to the previous year. Wholesale revenue surged by 30% to 182 million euros, while direct-to-consumer sales saw a more modest 11% increase to 178.5 million euros. Bernstein analyst Luca Solca expressed concerns about the company’s transition to a more direct-to-consumer model, noting the continued dominance of wholesale.
Beyond its iconic sandals, Birkenstock is actively diversifying its product portfolio. Clogs and boots constituted nearly two-thirds of the company’s quarterly revenue in the Americas and over half in the Europe, Middle East, and Africa (EMEA) region.
Looking ahead, Birkenstock reaffirmed its 2025 revenue growth target of 15% to 17% and maintained its annual adjusted EBITDA margin forecast of 30.8% to 31.3%. BMO Capital Market analyst Simeon Siegel suggested that the company’s cautious outlook might stem from a conservative approach early in the fiscal year.
Despite the cautious guidance, Birkenstock’s first-quarter revenue of 361.7 million euros ($377.47 million) surpassed analysts’ estimates of 356.2 million euros. This positive performance was driven by strong full-price sales, even amidst a competitive promotional landscape during the holiday season, particularly in the crucial U.S. market. Adjusted earnings per share reached 18 euros for the quarter, exceeding expectations by 2 euros. This strong financial performance underscores the enduring appeal of Birkenstock’s footwear and its resilience in a challenging market environment. However, the company remains vigilant about potential economic challenges in the coming year.
