Footwear giant Birkenstock Holding plc (NYSE:BIRK) stock fell Thursday as investors weighed a stepped-up capacity investment plan alongside mounting pressure from U.S. tariffs.
Management stated that it is expanding production to meet demand, but warned that currency fluctuations and incremental tariffs are expected to impact profitability.
The brand, known for comfort-focused, timeless designs, reported fourth-quarter adjusted earnings per share of 60 cents, beating the analyst consensus estimate of 40 cents.
Quarterly sales of $615.404 million (+15% year over year) outpaced the Street view of $606.670 million.
Revenue rose double digits across all segments: Americas up 11% (18% constant currency) and EMEA up 16% (17% constant currency). APAC led with 33% growth (38% on a constant currency basis).
Gross profit margin was 58.1%, down 90 basis points from the fourth quarter of 2024. The decline primarily reflected currency translation (120 basis points) and incremental U.S. tariffs (100 basis points).
“We opened 30 net new own-retail stores, bringing our total to 97, and APAC share of business increased 120 basis points to 11%,” said CEO Oliver Reichert.
Adjusted EBITDA was 147 million euros, up 17% year over year. Adjusted EBITDA margin rose 40 basis points to 27.8% year over year.
Capacity Expansion Spend
BIRKENSTOCK invested approximately 85 million euros in fiscal 2025 capital expenditures, primarily to expand production capacity.
It ended the year with 329 million euros in cash and cash equivalents; net leverage improved to 1.5 times as of September 30, 2025, from 1.8 times as of September 30, 2024.
The company repurchased 176 million euros in shares; excluding buybacks, the net leverage would have been 1.2 times.
The company stated that it made an early repayment of the USD Term Loan of $50 million in September.
Outlook
“As we look forward into fiscal 2026, we see a continuation of the strong consumer demand and double-digit growth,” Reichert said.
Birkenstock expects fiscal 2026 adjusted earnings of $2.22 to $2.40 per share, compared with analysts’ estimate of $2.30.
The company forecast sales of $2.689 billion to $2.747 billion, versus the Street view of $2.75 billion.
The gross profit margin is projected to be between 57.0% and 57.5%. The outlook includes about 100 basis points of currency headwinds and 100 basis points from incremental tariffs.
Capital expenditures are expected to range between 110 million euros and 130 million euros. The company also plans to repurchase up to $200 million in shares during fiscal 2026, subject to market conditions.
Birkenstock added that it expects to open approximately 40 new own-retail stores globally in fiscal 2026.
BIRK Price Action: Birkenstock Holding shares were down 10.56% at $41.50 during premarket trading on Thursday, according to Benzinga Pro data.
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