Tariffs, Currency Swings Cut Into Birkenstock Margins
Footwear giant Birkenstock Holding plc (NYSE:BIRK) stock fell Thursday after the company released mixed first-quarter fiscal 2026 results.
Details
Quarterly sales of $467.9 million missed the Street view of $468.5 million.
Sales rose 11.1% year over year (Y/Y), led by strong holiday demand for its products.
Adjusted EPS of 31 cents exceeded the Street view of 30 cents.
Revenue rose across all segments (Y/Y): Americas up 5% (+14% constant currency) and EMEA up 16% (+17% constant currency). APAC led with 28% growth (+37% on a constant currency basis).
Adjusted EBITDA rose 4% Y/Y to 106 million euros, though margin narrowed 170 basis points to 26.5%. The decline was driven mainly by unfavorable currency translation, which reduced margins by 230 basis points, and incremental U.S. tariffs, which cut a further 130 basis points. These pressures were partially offset by sales price increases net of inflation and stronger capacity absorption.
The drop was primarily due to unfavorable currency translation (230 basis points) and incremental U.S. tariffs (130 basis points), partly offset by sales price adjustments (net of inflation) and improved capacity absorption.
CEO Oliver Reichert said, “Our results for the first quarter of fiscal 2026 show the continued strong demand for our brand throughout the important holiday season.”
”As we discussed during our Capital Markets Day in New York on January 28, we believe we are a one-of-a-kind purpose-driven brand with a huge runway for growth ahead. Our unique business model is designed for resilience. We presented our three-year plan which calls for 13-15% revenue growth in constant currency and 30%+ EBITDA margin.”
Liquidity & Capex
The company invested approximately 38 million euros in the quarter for capital expenditures, primarily for the acquisition of the new site in Wittichenau.
Birkenstock ended the quarter with 229 million euros in cash and cash equivalents; net leverage stood at 1.7 times as of December 31, 2025, versus 1.5 times as of September 30, 2025.
Outlook
The company raised fiscal 2026 sales guidance to $2.759 billion-$2.808 billion (from $2.689 billion to $2.747 billion).
Following the earnings release, Telsey Advisory Group analyst Dana Telsey reiterated an Outperform rating on Birkenstock and maintained a $60 price forecast.
BIRK Price Action: Birkenstock Holding shares were down 5.00% at $38.00 during premarket trading on Thursday.
Photo by Josh Forden via Shutterstock
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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