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Birkenstock (BIRK) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q3 FY26)· Consumer Discretionary· Aug 13, 2026

Source: earnings call transcript

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

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

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%——

BIRK operating KPIs by quarter

BIRK operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q2 FY26This call 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
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

Business Stock Australia Acquisition 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

Increased freight rates and logistics costs due to Middle East conflict Q3 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. tariffs Q3 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 expenses FY26

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 drag Q3 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

D2C Growth Momentum

Next quarter (Q4 FY26)
Current Owned retail revenue up 50% (constant currency), SSS up high single digits, digital growth accelerated.
Target Continued 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.

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Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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