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    BIRK
    Earnings call· Jun 2026(Q3 FY26)

    Birkenstock Holding Q3 FY26 earnings call BIRK

    Aug 13, 2026 Source

    Executive summary

    Birkenstock Q3 FY26 — Strong D2C Growth and Raised Full-Year Guidance

    Birkenstock delivered a strong Q3 FY26, marked by accelerated direct-to-consumer growth, particularly in owned retail and digital channels, and robust performance in APAC, especially China. The company raised its full-year revenue and adjusted EBITDA guidance, reflecting confidence in brand strength and strategic investments. Despite headwinds from FX, tariffs, and increased logistics costs, underlying profitability improved, and the company continued to return capital to shareholders while maintaining a disciplined approach to distribution and pricing.

    Highlights

    5

    • Revenue grew 15% in constant currency, reaching the high end of the annual target.

    • Adjusted EBITDA margin (like-for-like) improved 60 basis points year-over-year.

    • Owned retail revenue grew 50% in constant currency, with same-store sales up high single digits.

    • APAC grew 23% in constant currency, with China growing over 50%.

    • Refinanced senior notes at a 75 basis point lower rate, adding EUR 500 million in liquidity for future capital allocation.

    Concerns

    5

    • Adjusted gross profit margin decreased 130 basis points year-over-year, primarily due to 60 bps FX pressure and 70 bps incremental U.S. tariffs.

    • Selling and distribution expenses increased 3 basis points as a percentage of revenue, driven by accelerated retail expansion and higher logistics costs from Middle East conflicts.

    • Adjusted EBITDA margin decreased 70 basis points year-over-year, impacted by 130 bps pressure from FX and tariffs.

    • Inventory to sales ratio increased to 37% from 33% a quarter ago, mainly due to capitalized tariffs and FX effects.

    • Full-year effective tax rate guidance was raised to 30%-31% from 26%-28% due to non-tax deductible expenses from the ASR and debt issuance.

    Guidance & targets

    13
    CategoryTargetConfidence
    Full-year FY26 Revenue Growth (constant currency)
    15%
    high materiality
    High
    Full-year FY26 Adjusted EBITDA
    at least EUR 710 million
    high materiality
    High
    Q4 FY26 Revenue Growth (constant currency)
    13% to 15%
    medium materiality
    High
    Q4 FY26 FX Impact on Revenue Growth
    relatively neutral
    low materiality
    Medium
    Q4 FY26 Blended Tariff Rate
    just over 15%
    medium materiality
    High
    Q4 FY26 Tariff Impact (YoY)
    relatively neutral
    low materiality
    Medium
    Full-year FY26 FX Drag on Revenue
    350 basis points
    medium materiality
    High
    Full-year FY26 Adjusted Gross Margin
    57% to 57.5%
    high materiality
    High
    Full-year FY26 Adjusted EBITDA Margin
    30.2% to 30.5%
    high materiality
    High
    Full-year FY26 Effective Tax Rate
    30% to 31%
    medium materiality
    High
    Full-year FY26 Adjusted EPS
    EUR 1.90 to EUR 2.05
    high materiality
    High
    Full-year FY26 Capital Expenditure
    EUR 110 million to EUR 130 million
    medium materiality
    High
    End of FY26 Net Leverage
    1.6x to 1.7x
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Americas
    Growth in constant currency, continuing the trend seen in the first half of the year and reflecting consistent strength in this developed market. B2B sell-out with key partners up above 20% year-over-year.
    		—14%——
    EMEA
    Growth in both reported and constant currency, a strong acceleration from Q2 driven by particularly strong D2C in Europe (online and retail). Localized impact from Middle East conflict was less pronounced than Q2, offset by strong domestic demand in markets like Saudi Arabia. Full price realization of 93% in D2C.
    		—15%——
    APAC
    Growth in constant currency. Quarterly growth rates skewed due to changed revenue pattern from Australia business acquisition. Excluding Australia timing shifts, APAC growth was close to 30%. China is a premium market with the highest ASP globally.
    China growth: over 50%
    		—23%——

    Operational metrics

    50
    Revenue
    EUR 720 million
    Q3 FY26

    Reported revenue for the third quarter.

    Revenue Growth
    13%YoY
    Q3 FY26

    Reported revenue growth.

    Revenue Growth
    15%YoY
    Q3 FY26

    Constant currency revenue growth, at the high end of annual target.

    FX Headwind to Revenue Growth
    180 bps
    Q3 FY26

    Due to depreciation in USD, CAD, Indian Rupee, and Japanese Yen compared to Q3 FY25.

    Average Euro to USD Rate
    1.16up from 1.13 in Q3 FY25
    Q3 FY26

    Average rate for the quarter.

    B2B Revenue Growth
    15%YoY
    Q3 FY26

    Constant currency growth, consistent with prior quarters.

    B2C Revenue Growth
    16%YoY
    Q3 FY26

    Constant currency growth, outpacing B2B in the quarter.

    Owned Retail Revenue Growth
    50%YoY
    Q3 FY26

    Constant currency growth, driven by expanded footprint and faster store opening pace.

    Same-Store Sales Growth
    high single digits
    Q3 FY26

    Reflects continued demand across existing store fleet.

    New Owned Stores Added
    13
    Q3 FY26

    New stores opened during the quarter.

    Total Owned Stores
    124
    Q3 FY26

    Total owned stores as of the end of the quarter.

    Adjusted Gross Profit Margin
    59.2%-130 bps YoY
    Q3 FY26

    Mainly driven by FX and incremental U.S. tariffs.

    Adjusted Gross Profit Margin (ex-FX/Tariffs)
    up 10 bpsYoY
    Q3 FY26

    Underlying improvement excluding the impact of FX and tariffs.

    Capacity Absorption Benefit to Adjusted Gross Profit Margin
    50 bps
    Q3 FY26

    Benefit from better capacity absorption.

    Product Mix Drag on Adjusted Gross Profit Margin
    40 bps
    Q3 FY26

    Due to ongoing shift to closed-toe silhouettes, which have higher manufacturing complexity.

    Closed-toe Cost Share Increase
    over 500 bps
    Q3 FY26

    Driven by over 50% growth in non-Boston silhouettes, requiring more labor and production minutes.

    Non-Boston Closed-toe Growth
    over 50%
    Q3 FY26

    Unit growth in non-Boston closed-toe executions.

    Naples Unit Growth
    more than 4xYoY
    Q3 FY26

    Unit growth for the Naples silhouette.

    Lesotho Unit Growth
    more than doubledYoY
    Q3 FY26

    Unit growth for the Lesotho silhouette.

    Selling and Distribution Expenses
    EUR 186 million
    Q3 FY26

    Representing 25.9% of revenue, up 3 bps from prior year.

    General and Administration Expenses
    EUR 33 million
    Q3 FY26

    Representing 4.5% of revenue, down 40 bps year-over-year.

    Adjusted EBITDA
    EUR 242 millionup 11% YoY
    Q3 FY26

    Adjusted EBITDA for the third quarter.

    Adjusted EBITDA FX Impact
    -EUR 8 million
    Q3 FY26

    Flow-through of FX effects reduced adjusted EBITDA.

    Adjusted EBITDA Growth (ex-FX)
    15%YoY
    Q3 FY26

    Adjusted EBITDA growth excluding FX impact.

    Adjusted EBITDA Margin
    33.7%-70 bps YoY
    Q3 FY26

    Due to 130 bps of pressure from FX and tariffs.

    Adjusted EBITDA Margin (ex-FX/Tariffs)
    up 60 bpsYoY
    Q3 FY26

    Improvement despite increased freight and logistics costs.

    Adjusted Net Profit
    EUR 134 millionup 15% YoY
    Q3 FY26

    Adjusted net profit for the third quarter.

    Adjusted EPS
    EUR 0.74up 19% from EUR 0.62 YoY
    Q3 FY26

    Adjusted EPS for the third quarter.

    Income Tax Payments
    EUR 77 million
    Q3 FY26

    Higher income tax payments contributed to lower operating cash flow.

    Cash and Cash Equivalents
    EUR 694 million
    as of June 30, 2026

    Balance after share repurchase and debt refinancing.

    Senior Notes Repaid
    EUR 428.5 million
    Q3 FY26

    Repaid as part of debt refinancing.

    New Senior Notes Issued
    EUR 900 million
    Q3 FY26

    Issued as part of debt refinancing.

    Additional Liquidity from Refinancing
    EUR 500 million
    Q3 FY26

    Remaining excess cash added to the balance sheet, available for share repurchases or other debt refinancing.

    Inventory to Sales Ratio
    37%up from 33% QoQ
    Q3 FY26

    Increase largely driven by capitalized tariffs and FX effects.

    DSO
    45 daysup slightly from 43 days YoY
    Q3 FY26

    Days Sales Outstanding.

    CapEx
    EUR 26 million
    Q3 FY26

    Spent on production capacity (Arouca, Burleson Pasabag), new buildout, retail, and IT investments.

    Purchase Price Tranche for Australia Business
    EUR 9 million
    Q3 FY26

    Second tranche of the purchase price paid.

    Net Leverage
    1.8xup from 1.5x at Sep 30, 2025
    as of June 30, 2026

    Reflecting cash outflows from the ASR.

    Net Leverage (ex-ASR)
    1.4x
    as of June 30, 2026

    Hypothetical net leverage excluding the impact of the ASR.

    Full-year FX Drag on Revenue
    350 bps
    FY26

    Expected for the full fiscal year.

    Full-year Adjusted EBITDA Margin FX/Tariff Pressure
    200 bps
    FY26

    Combined pressure from FX and U.S. tariffs.

    Full-year Adjusted EPS FX Pressure
    EUR 0.15 to EUR 0.20
    FY26

    Expected pressure on adjusted EPS.

    Recurring Tax Rate Expectation
    high 20s
    future

    Expected recurring tax rate going forward, not the elevated FY26 rate.

    Impact of Higher Tax Rate on FY26 EPS
    EUR 0.08 per share
    FY26

    Impact from the elevated effective tax rate.

    Recurring Finance Cost Increase from New Debt
    EUR 4.5 million
    per quarter

    Increase in interest expense due to the issuance of new senior notes.

    Normalized Quarterly Finance Costs
    ~$25 million
    per quarter

    Expected normalized finance costs, with decreased volatility.

    CapEx (last 2 years)
    EUR 189 million
    last 2 years

    Total CapEx invested over the past two years.

    Full Price Realization
    93%
    Q3 FY26

    Strong full price realization in EMEA D2C, even as the broader market became more promotional.

    B2B Sell-out Growth
    above 20%YoY
    Q3 FY26

    Sell-out growth with key partners in the Americas, particularly youth department stores and sporting goods.

    Sandal Business Growth
    high single digitsYoY
    Q3 FY26

    Constant currency growth for the sandal business, particularly strong in D2C driven by newness.

    Industry KPIs

    8
    MetricValueDetails
    Effective tax rate30% to 31%%
    Inventory position37%%
    Revenue by channel16%%
    Operating margin sg a33.7%%
    Store fleet door investment13stores
    Share buyback capital returnEUR 230 millionEUR
    Tariff cost exposure recovery70 bpsbps
    Franchise product cycle performancemore than 4xunits

    Product announcements

    3
    ProductTypeDetails
    Rafa, Canvas and premium leather executions in Naples, Boston, Arizona and [indiscernible]launch
    Collaboration with Song for the mute and Repettolaunch
    Santa Clarita (Mery Jane style)launch

    Deals & partnerships

    1
    Business Stock AustraliaAcquisition of distributor, leading to consolidation of the Australia business and changed revenue recognition patterns.EUR 9 million

    Paid the second tranche of the purchase price for Business Stock Australia. This acquisition changed the revenue recognition from delivery to distributor to local market dynamics.

    Risks & headwinds

    5
    Increased freight rates and logistics costs due to Middle East conflictQ3 FY26, expected to continue into Q4 FY26

    Selling and distribution expenses up 3 bps as % of revenue; Adjusted EBITDA margin pressured despite underlying improvement.

    Mitigation: Adjustments in delivery routes; strong domestic demand in other markets (e.g., Saudi Arabia).

    FX depreciation (USD, CAD, Indian Rupee, Japanese Yen vs EUR)Q3 FY26, full-year FY26

    180 bps headwind to revenue growth in Q3 FY26; EUR 8 million reduction in adjusted EBITDA; 60 bps pressure on adjusted gross profit margin; 130 bps pressure on adjusted EBITDA margin. Full-year FX drag expected to be 350 bps on revenue and EUR 0.15-EUR 0.20 pressure on EPS.

    Mitigation: Not explicitly stated, but underlying performance ex-FX was strong.

    Incremental U.S. tariffsQ3 FY26, full-year FY26

    70 bps pressure on adjusted gross profit margin in Q3 FY26; 130 bps pressure on adjusted EBITDA margin (combined with FX). Full-year adjusted gross margin and EBITDA margin guidance includes 200 bps pressure from FX and tariffs.

    Mitigation: Recently announced agreement with EU and implementation of Section 301 tariffs expected to result in a lower blended tariff rate for Q4 (just over 15%) compared to Section 122 tariffs, making tariffs relatively neutral YoY in Q4.

    Higher effective tax rate due to non-tax deductible expensesFY26

    Expected FY26 tax rate 30%-31%, up from 26%-28%. Impact of EUR 0.08 per share on FY26 EPS.

    Mitigation: Not a new baseline; recurring tax rate expected in high 20s.

    Product mix shift to closed-toe silhouettes causing slight gross margin dragQ3 FY26, ongoing

    40 bps drag on gross margin in Q3 FY26; over 500 bps increase in cost share due to >50% growth in non-Boston silhouettes.

    Mitigation: These products yield higher ASP and gross profit dollars per pair; in-sourcing production is a future margin opportunity.

    What to watch in Q4 FY26

    5

    D2C Growth Momentum

    Next quarter (Q4 FY26)
    CurrentOwned retail revenue up 50% (constant currency), SSS up high single digits, digital growth accelerated.
    TargetContinued strong D2C growth, particularly in online and owned retail.

    Why it matters

    D2C is a key strategic growth driver with higher margin potential, and its acceleration was a highlight this quarter.

    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.

    Q&A highlights

    7

    Inquired about the drivers behind the D2C growth acceleration, the relationship between D2C and B2B, and potential upside to the full-year 15% revenue growth guidance.

    Oliver attributed D2C growth to investments in owned retail (50% growth, high single-digit SSS) and digital (accelerating online growth, 93% full-price realization in Europe). B2B remains important for efficient customer access. He expressed confidence in the 15% guidance, noting the long-term target is 13-15%.

    “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.”

    asked by Matthew Boss · answered by Oliver Reichert

    2 min read5 chapters

    Detailed Narrative

    01

    D2C Acceleration and Channel Strategy

    Birkenstock saw significant acceleration in its Direct-to-Consumer (D2C) business, with owned retail revenue growing 50% in constant currency and same-store sales up high single digits. Digital growth also accelerated, driven by improved content, user experience, and loyalty programs, particularly in Europe with 93% full-price realization. The company emphasizes continued investment in D2C while maintaining a strong, disciplined B2B business for efficient customer access, especially for younger consumers.

    02

    APAC and China Growth Dynamics

    The APAC segment demonstrated strong growth of 23% in constant currency, with China leading the region with over 50% growth. China is highlighted as a premium market with the highest average selling price (ASP) globally. The company plans to continue expanding brand awareness through new stores (both company-owned and partner doors), local activations, and brand-building events, following the roadmap outlined at its Capital Market Day.

    03

    Product Innovation and Mix Shift

    Birkenstock continues to innovate across both closed-toe and sandal categories. Closed-toe silhouettes, including the Naples and Lesotho, saw significant unit growth (Naples up >4x, Lesotho >2x), contributing to a product mix shift. While these products have slightly lower gross margins due to manufacturing complexity, they yield higher ASP and gross profit per pair, attracting new consumers and broadening use occasions for the footbed. In-sourcing parts of this production is identified as a future margin opportunity.

    04

    Capital Allocation and Shareholder Returns

    The company returned EUR 230 million to shareholders through share repurchases and refinanced senior notes at a 75 basis point lower rate, adding EUR 500 million in liquidity. Management expressed intent to continue buybacks, especially given current share valuation, and aims to utilize cash for larger transactions to avoid further reducing public float, while remaining flexible to buy from the public float if deemed in shareholders' best interest.

    05

    Capacity Expansion and Production

    Birkenstock is on track to deliver 10% unit growth and is progressing with the build-out of its manufacturing network in Arouca and Pasabag. The company is also beginning the buildout of a new facility in [indiscernible] and continuing investments in retail and IT, with CapEx expected to be EUR 110 million to EUR 130 million for FY26. This expansion supports the continued growth in both open-toe and closed-toe categories.

    AI-generated summary of the company’s earnings call. Not investment advice.