<div id="readability-page-1"><p>Birkenstock Holding plc ((BIRK)) has held its Q2 earnings call. Read on for the main highlights of the call.</p><h3>Claim 55% Off TipRanks</h3><ul><li>Unlock  hedge fund-level data  and  powerful investing tools  for smarter, sharper decisions  </li><li> Discover top-performing stock ideas and upgrade to a portfolio of market leaders with  Smart Investor Picks  </li></ul> <p>Birkenstock’s latest earnings call struck a confident tone on growth and brand strength, even as reported profitability came under pressure. Management highlighted double‑digit constant‑currency revenue gains, powerful momentum in direct-to-consumer channels, and disciplined execution, while acknowledging foreign‑exchange swings, higher U.S. tariffs, and regional disruptions as near‑term drags on margins and earnings.</p> <h2>Strong Top-Line Growth Within Target Range</h2> <p>Birkenstock reported Q2 revenue of EUR 618 million, up 8% year on year on a reported basis and 14% in constant currency, squarely within its 13%–15% growth target. The gap between reported and constant‑currency figures underlines how FX is masking strong underlying demand, but the company stressed that operational performance remains firmly on track.</p> <h2>APAC and Americas Lead Regional Outperformance</h2> <p>Regionally, Asia-Pacific was the standout, growing 30% in constant currency, more than twice the pace of other regions, with the highest average selling prices and closed‑toe penetration. The Americas delivered 14% constant‑currency growth, fueled by robust B2B orders and partner sell-through rising more than 30% at key wholesale accounts.</p> <h2>D2C and Owned Retail Power Brand Momentum</h2> <p>Direct-to-consumer channels continued to gain share, with owned retail revenue growing more than 60% in constant currency and same‑store sales accelerating at a double‑digit clip. Birkenstock opened five new stores in the quarter, bringing the fleet to 111 locations, and remains on course to reach roughly 140 owned doors by the end of the fiscal year.</p> <h2>Profitability Resilient Once FX and Tariffs Stripped Out</h2> <p>Adjusted EBITDA came in at EUR 198 million, down 1% on a reported basis as FX and tariffs weighed on margins, but underlying profitability was much stronger. Excluding those headwinds, EBITDA rose about 13% and the adjusted EBITDA margin would have expanded by roughly 60 basis points to around 35.4%, with adjusted gross margin also slightly higher year on year.</p> <h2>Full-Price Sell-Through and Product Mix Strength</h2> <p>The brand’s pricing power remains intact, with full-price sell-through above 90% and limited reliance on discounting, underscoring tight inventory control. Closed‑toe products gained further traction, with penetration up 300 basis points, 11 of the top 20 styles in closed‑toe silhouettes, and non‑Boston clogs posting the fastest growth.</p> <h2>Solid Cash Generation and Ample Liquidity</h2> <p>Despite heavier investment, Birkenstock generated EUR 29 million of operating cash in Q2, a marked improvement from a cash use of EUR 18 million in the prior year period. The company ended the quarter with EUR 201 million in cash and cash equivalents, and guided full-year capital expenditure to EUR 110–130 million to support capacity and retail expansion.</p> <h2>Scaling Production and Easing Bottlenecks</h2> <p>Operationally, the group is ramping production to support a targeted 10% annual increase in pairs sold, backed by EUR 21 million of Q2 CapEx into facilities in Arouca, Görlitz, Stroth, Pasewalk, and the new Wittichenau build‑out. Management is also increasing preproduction of semi‑finished uppers to relieve assembly bottlenecks and improve throughput ahead of peak demand.</p> <h2>Reaffirmed Growth Targets and Capital Allocation Plans</h2> <p>Management reiterated its fiscal 2026 constant‑currency revenue growth target of 13%–15% and adjusted EBITDA of at least EUR 700 million, implying a 30%–30.5% margin even after FX and tariff pressure. The board also plans up to $200 million in share repurchases this fiscal year, while aiming to keep year‑end net leverage in the 1.3x–1.4x range excluding any additional buybacks.</p> <h2>FX Headwinds Weigh on Reported Results</h2> <p>Currency movements were a major swing factor, with depreciation in the U.S. dollar, Canadian dollar, and several Asian currencies shaving roughly 640 basis points off reported Q2 revenue growth. FX reduced adjusted EBITDA by EUR 27 million and cut adjusted net profit and EPS by about EUR 17 million and EUR 0.09 respectively, and management expects around a 350‑basis point FX drag on full‑year reported revenue.</p> <h2>Tariff Hikes Compress Margins</h2> <p>The sharp increase in average U.S. tariff exposure to just above 20%, up from about 10% before April 2025, is another material headwind for margins. Higher duties reduced adjusted gross margin by roughly 90 basis points in Q2 and are projected to weigh on both gross and EBITDA margins by about 100 basis points in Q3 and around 50 basis points in Q4 if current tariff structures persist.</p> <h2>Reported Margin and EPS Compression Despite Volume Strength</h2> <p>On a reported basis, adjusted gross margin slipped to 54.6%, down about 310 basis points year over year, while adjusted EBITDA margin narrowed to 32.1%, a 270‑basis point decline. Adjusted net profit fell 10% to EUR 93 million and adjusted EPS declined 9% to EUR 0.50, with management emphasizing that FX, tariffs, and one‑offs explain most of the compression.</p> <h2>Middle East Conflict Dampens EMEA Performance</h2> <p>The conflict in the Middle East had a direct impact on the EMEA region, costing an estimated EUR 6 million of revenue in Q2, equal to roughly 300 basis points of growth for that region and about 100 basis points for the group. Management flagged EUR 10–12 million of ongoing revenue risk tied to shipping disruptions and subdued consumer sentiment in parts of Europe.</p> <h2>Higher Inventories and Tariff Capitalization Under Scrutiny</h2> <p>Inventory rose, with the inventory‑to‑sales ratio increasing to 39% from 36% a year ago, or 37% on a currency‑neutral basis, drawing some investor focus. The build reflects a deliberate 19% increase in raw materials and semi‑finished goods, driven by preproduction to ease bottlenecks and the capitalization of higher tariffs rather than a demand slowdown.</p> <h2>Noncash Derivative Charge Adds to EPS Volatility</h2> <p>The quarter also included a EUR 15 million noncash expense, roughly EUR 0.08 per share, from revaluing an embedded derivative tied to the company’s senior notes. Management warned that similar valuation swings could recur around call dates, adding noise to reported earnings even though they do not impact cash flow or underlying operations.</p> <h2>Leverage, Buybacks, and IEEPA Refund Timing Risks</h2> <p>Net leverage ticked up to 1.7x from 1.5x at the end of September, mainly due to seasonality, with the company still targeting 1.3x–1.4x by year‑end excluding share repurchases. Birkenstock also noted about EUR 30 million in expected IEEPA refunds but said timing remains uncertain, and the authorized $200 million buyback program has not yet been deployed, leaving capital returns dependent on cash generation and market conditions.</p> <h2>Guidance: Confident Growth Outlook Despite Macro Friction</h2> <p>Looking ahead, Birkenstock reaffirmed guidance for 13%–15% constant‑currency revenue growth, implying 10%–12% reported growth to EUR 2.30–2.35 billion with a full‑year FX headwind of about 350 basis points. The company expects adjusted gross margin of 57.0%–57.5%, adjusted EBITDA of at least EUR 700 million, EPS of EUR 1.90–2.05, CapEx of EUR 110–130 million, and year‑end leverage of 1.3x–1.4x while absorbing roughly 200 basis points of combined FX and tariff pressure.</p> <p>Birkenstock’s call painted a picture of a brand still in high demand, especially in APAC, the Americas, and its own retail channels, but facing translation and policy headwinds that obscure the strength of its core business. For investors, the key takeaway is that management remains committed to its long‑term growth and margin targets, backed by capacity expansion and disciplined capital allocation, even as near‑term earnings stay sensitive to FX, tariffs, and geopolitical risks.</p></div>

BIRK

<p>Birkenstock Holding plc reported Q2 earnings with a revenue of EUR 618 million, reflecting an 8% year-on-year increase. Despite foreign exchange and tariff pressures impacting profitability, the company achieved double-digit constant-currency growth, particularly in the Asia-Pacific region, which grew 30%. Direct-to-consumer channels saw over 60% revenue growth. Adjusted EBITDA was EUR 198 million, down 1% due to external pressures, but underlying profitability improved. Management reaffirmed growth targets of 13%-15% for fiscal 2026 and plans for share repurchases up to $200 million this year.</p>

Birkenstock Earnings Call Highlights Robust Growth Amid FX Headwinds