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Birkenstock (BIRK) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q2 FY26)· Consumer Discretionary· May 13, 2026

Source: earnings call transcript

Executive summary

Birkenstock Q2 FY26 — Strong Growth Amidst Headwinds

Birkenstock demonstrated resilience in Q2 FY26, achieving strong constant currency revenue growth and maintaining robust adjusted EBITDA margins despite significant FX and tariff headwinds, as well as geopolitical disruptions. The company continues to execute on its white space growth opportunities, particularly in APAC and D2C channels, while reiterating its full-year guidance amidst an uncertain global environment. All financial figures are stated in EUR, despite the metadata indicating USD.

Highlights

5

  • Revenue grew over 14% in constant currency, within the target range of 13% to 15%.

  • Adjusted EBITDA margin remained strong at over 32% despite FX and tariff impacts.

  • APAC grew 30% in constant currency, more than 2x the pace of other regions.

  • D2C own retail grew over 60% year-over-year in constant currency, with double-digit same-store sales growth.

  • Americas business was up 14% in constant currency, driven by strong B2B growth and over 30% sell-through at key partners.

Concerns

5

  • Strong depreciation of the U.S. dollar, Canadian dollar, and Asian currencies caused a 640 basis point headwind to revenue growth.

  • Middle East conflicts reduced EMEA revenue by EUR 6 million and growth by about 300 basis points.

  • Adjusted gross profit margin was down 310 basis points year-over-year, with 230 basis points from FX and 90 basis points from incremental U.S. tariffs.

  • Adjusted EBITDA was down 1% year-over-year, primarily due to a EUR 27 million FX impact.

  • Adjusted EPS for Q2 was EUR 0.50, down 9% year-over-year, impacted by EUR 17 million FX and a EUR 15 million noncash expense.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 constant currency revenue growth
13% to 15%
high materiality
High
Full-year 2026 reported revenue growth
10% to 12%
high materiality
High
Full-year 2026 reported revenue
EUR 2.3 billion to EUR 2.35 billion
high materiality
High
Full-year 2026 adjusted gross margin
57% to 57.5%
high materiality
High
Full-year 2026 adjusted EBITDA
at least EUR 700 million
high materiality
High
Full-year 2026 adjusted EBITDA margin
30% to 30.5%
high materiality
High
Full-year 2026 expected tax rate
26% to 28%
medium materiality
High
Full-year 2026 adjusted EPS
EUR 1.90 to EUR 2.05
high materiality
High
Full-year 2026 Capital expenditures
EUR 110 million to EUR 130 million
medium materiality
High
End of FY26 net leverage target
1.3x to 1.4x
medium materiality
High
Share repurchase program
$200 million total consideration
medium materiality
High
Q3 FY26 revenue growth (constant currency)
within 13% to 15%
medium materiality
High
Q4 FY26 revenue growth (constant currency)
within 13% to 15%
medium materiality
High
Q3 FY26 FX headwind to reported revenue growth
approximately 200 basis points
medium materiality
High
Q4 FY26 FX headwind to reported revenue growth
neutral
medium materiality
High
Q3 FY26 tariff impact on gross margin and EBITDA margin
about 100 basis points
medium materiality
High
Q4 FY26 tariff impact on gross margin and EBITDA margin
around 50 basis points
medium materiality
High
Q3 FY26 FX pressure on gross margin and EBITDA margin
around 60 basis points
medium materiality
High
Q4 FY26 FX pressure on gross margin and EBITDA margin
neutral
medium materiality
High
Recurring finance costs
EUR 18 million to EUR 20 million
low materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Americas
Growth in constant currency, driven by strong B2B performance and sell-through at key partners. Strong D2C same-store growth.
B2B growth: strongSell-through at partner doors: up over 30%D2C same-store growth: strongNew stores added: 2Total stores: 17
—14%——
EMEA
Growth in constant currency, strong result despite negative impacts from Middle East conflicts and muted consumer sentiment in Europe.
Revenue reduction due to Middle East conflicts: EUR 6 millionGrowth reduction due to Middle East conflicts: 300 bps
—11%——
APAC
Growth in constant currency, in line with expectations, with D2C retail leading. High quality growth with double-digit ASP increase.
Growth rate vs other regions: more than 2xStrongest growth markets: India, China, JapanClosed-toe penetration: highest in quarterASP: highest in quarter
—30%——
B2B Channel
Growth in constant currency, on the back of continued strong demand at key partners.
—15%——
D2C Channel
Sustaining double-digit growth in constant currency. Own retail was very strong, with accelerated same-store sales growth.
Own retail growth: over 60% constant currencySame-store sales growth: double digits
—12%——

BIRK operating KPIs by quarter

BIRK operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q2 FY26 Jun 2026 Q3 FY26Change vs prior quarter
New stores opened
5 We opened 5 new owned retail doors, bringing the total globally to 111. Source: earnings call transcript
13 We added 13 new owned stores, bringing our total to 124. Source: earnings call transcript
+160%
Stores
111 We opened 5 new owned retail doors, bringing the total globally to 111. Source: earnings call transcript
124 We added 13 new owned stores, bringing our total to 124. Source: earnings call transcript
+11.7%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
Santa Clarita, Ballerina styleupdate

Risks & headwinds

Middle East Conflicts Q2 FY26 and H2 FY26

Reduced EMEA revenue by EUR 6 million (300 bps growth impact) in Q2 FY26; identified EUR 10-12 million revenue risk in EMEA for H2 FY26.

Mitigation:Secured alternative delivery routes; steering products originally intended for Middle East to other regions (especially APAC); increased focus on Saudi Arabia.

Inflation and Energy Costs Q2 FY26 and remainder of 2026

US annual inflation rate jumped to 3.3% in March '26; Eurozone inflation reached 3% in April '26, driven by 11% increase in energy costs. Higher inflation in energy, freight rates, and petroleum-based raw materials.

Mitigation:Strong inventory position mitigates exposure; pricing decisions address input cost inflation; no impact on overall FY26 margin guidance expected.

FX Depreciation Q2 FY26 and full-year FY26 (350 bps headwind to revenue growth)

Strong depreciation of USD, CAD, and Asian currencies caused 640 bps headwind to Q2 FY26 revenue growth; reduced adjusted EBITDA by EUR 27 million; reduced adjusted net profit by EUR 17 million; reduced adjusted EPS by EUR 0.09.

Mitigation:Business resilience; ability to steer product between geographies and channels to optimize margins.

Increased Tariff Exposure Q2 FY26 onwards

U.S. Supreme Court ruling increased tariff exposure to just over 20% (including Section 122 temporary tariffs); estimated refund claims of EUR 30 million with uncertain timing.

Mitigation:Strong inventory position in the U.S. (tariffed at a range of rates); targeted, granular pricing strategy; awaiting administrative steps for IEEPA refunds; not jumping to conclusions due to temporary Section 122 tariffs and ongoing trade negotiations.

Muted Consumer Sentiment in Europe Q2 FY26 onwards

Reduced tourism in key cities and more cautious sentiment among local consumers, largely attributed to double-digit increase of energy costs and higher inflation.

Mitigation:Ability to lean into stronger markets, stronger channels, and stronger product categories when softness is observed elsewhere.

What to watch in Q3 FY26

EMEA Revenue Risk Offset

H2 FY26
Current EUR 10-12 million revenue risk identified for H2 FY26
Target Risk offset by other regional segments

Why it matters

Indicates the company's ability to reallocate product and mitigate regional geopolitical impacts on overall revenue guidance.

As per today, we identified approximately EUR 10 million to EUR 12 million of revenue risk in EMEA which, at this point, we believe we can offset with other regional segments. So there's no change in our overall revenue guidance.

Find out whether BIRK delivers this. Inve re-checks your case every morning.

Q&A highlights

Break down factors in the H2 forecast (capacity, Middle East, channel mix) and elaborate on muted consumer sentiment in Europe.

Management sees no slowdown in H2 FY26, with demand remaining strong and resilient despite headwinds. They attribute conservative guidance to Q3/Q4 being seasonally largest and DTC-heavy, particularly in EMEA, which is exposed to external changes. They are confident in delivering the 13-15% constant currency growth range.

“The clear answer to the first part of your question is that we're not seeing any slowdown in second half of fiscal '26.”

asked by Matthew Boss · answered by Oliver Reichert

2 min read 6 chapters

Detailed narrative

Global Headwinds and Resilience

Birkenstock navigated multiple global conflicts, supply chain disruptions, and rising energy costs, which fueled inflation and impacted consumer wallets. Despite these challenges, including a 3.3% US inflation rate in March '26 and 3% Eurozone inflation in April, the company demonstrated strong performance and resilience, reiterating its full-year guidance. Management highlighted its owned supply chain as a key shield against disruptions.

Strategic Growth Initiatives and Channel Performance

The company continued to execute on its white space growth opportunities, with closed-toe penetration increasing by 300 basis points, driven by strong clog growth. Birkenstock opened 5 new owned retail doors, reaching 111 globally, and is on track for 140 by year-end FY26. Investments in online business are ongoing to drive conversion and growth, supported by a global membership base of almost 13 million.

Regional Performance Highlights

APAC was a standout, growing 30% in constant currency, more than double the pace of other regions, with strong growth in India, China, and Japan, and notably higher ASPs. The Americas segment remained strong, up 14% in constant currency, boosted by B2B growth and over 30% sell-through at key partners. EMEA grew 11% in constant currency despite a EUR 6 million revenue reduction (300 bps impact) due to Middle East conflicts and muted consumer sentiment.

Margin Dynamics and Cost Pressures

Gross profit margin was 53.9%, with adjusted gross profit margin at 54.6%, impacted by 230 basis points from FX and 90 basis points from incremental US tariffs. Adjusted EBITDA margin was 32.1%, with FX and tariff impacts reducing it by 270 basis points. Excluding these factors, adjusted EBITDA margin would have been up 60 basis points to 35.4%. The company noted that pricing decisions are made to address input cost inflation.

Inventory and Working Capital Management

The inventory to sales ratio was 39%, up from 36% year-over-year, primarily due to FX and an intentional 19% increase (EUR 26 million) in raw materials and semi-finished goods for preproduction to address bottlenecks. On a currency-neutral basis, the ratio was 37%. Days Sales Outstanding (DSO) increased slightly to 49 days due to higher B2B mix and timing of large shipments, but receivables remain healthy with minimal credit losses.

Capital Allocation and Shareholder Returns

Birkenstock spent EUR 21 million in CapEx, primarily on production capacity expansion in Arouca, Gorlitz, Stroth, Pasewalk, and the build-out of Wittichenau, as well as retail and IT investments. Net leverage stood at 1.7x. The company reiterated its intention to repurchase $200 million in shares during FY26, noting that no buybacks have occurred year-to-date but all options, including open market repurchases, are being considered.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.