Birkenstock raises revenue forecast on strong demand, shares jump 18%
Birkenstock has raised its annual sales growth forecast after surpassing quarterly revenue expectations. The company's robust performance was largely driven by strong full-price demand for its premium sandals. Sales through the direct-to-consumer channel surged by fourteen percent, accounting for nearly thirty-nine percent of total revenue. The Asia-Pacific region led the way in growth, while…
Birkenstock has raised its annual sales growth forecast and exceeded quarterly revenue expectations, leading to an 18% increase in its share price. The footwear company attributes its success to strong demand for its premium sandals and closed-toe shoes, which cater to affluent consumers. These products have proven resilient in the face of a broader decline in U.S. discretionary spending that has impacted many other apparel and footwear businesses.
The company's high-end sandals and closed-toe shoes have maintained robust demand throughout the quarter. Additionally, Birkenstock's growing direct-to-consumer (DTC) business and expanding retail presence contributed to overall growth across various regions. Analyst Rachel Wolff from EMarketer noted that consumers continue to favor premium brands and are willing to pay a higher price for perceived high-quality products.
Despite concerns over the Middle East conflict, Birkenstock's management anticipated only a limited impact, estimating costs of only high single-digit millions of euros for the second half of the year, rather than the previously expected range of 10 to 12 million euros. CFO Ivica Krolo explained that the company effectively mitigated much of the pressure through route adjustments and strong performance in other regions.
The Middle East conflict had a relatively contained impact on Birkenstock's sales. Asia-Pacific sales increased by 18% on a reported basis, while the Americas grew by 11% and Europe, Middle East, and Africa (EMEA) expanded by 15%. Looking ahead, Birkenstock anticipates a 15% increase in revenue on a constant currency basis for the fiscal year 2026, surpassing its earlier forecast of a 13% to 15% rise.
The company has maintained its annual profit forecast of 1.90 to 2.05 euros per share. In the third quarter, revenue grew by 13% to reach 719.5 million euros ($829.1 million), surpassing analysts' average estimate of 713.4 million euros. Adjusted earnings per share were 0.74 euros, slightly below the estimated 0.76 euros.
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