BIRK — Birkenstock Holding plc

Summary of Birkenstock (BIRK) Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 Revenue: EUR 526 million, up 20% in constant currency; reported growth over 15% due to currency depreciation.
• Full Year Revenue: EUR 2.1 billion, an 18% increase in constant currency, exceeding guidance of 15%-17%.
• Gross Margin: 59.1%, a 30 basis point increase year-over-year; adjusted EBITDA margin at 31.8%, up 100 basis points.
• Adjusted Net Profit: EUR 94 million in Q4, a 71% increase; full year adjusted net profit at EUR 346 million, up 44%.
• Cash Flow: Operating cash flow of EUR 384 million; ended with EUR 329 million in cash after share buybacks and debt repayment.
• Net Leverage: Reduced to 1.5x from 3.3x, with a target of 1.3-1.4x for FY 2026.

2. Strategic Updates and Business Highlights

• Store Expansion: Doubled store fleet to 97, with plans to open 40 new stores in 2026, aiming for 150 stores by 2027.
• Product Demand: Strong growth in closed-toe shoes, which now account for 38% of revenue; significant demand for premium products.
• B2B vs. D2C Growth: B2B grew 21% for the year, outpacing D2C at 12%. Continued focus on high-quality retail partnerships.
• APAC Growth: APAC segment grew 34%, now contributing 11% of global revenue, with expectations to continue this momentum.

3. Forward Guidance and Outlook

• FY 2026 Revenue Growth: Targeting 13%-15% constant currency growth, translating to reported growth of 10%-12% due to FX headwinds.
• Adjusted EBITDA: Expected to be at least EUR 700 million, with margins pressured by FX and tariffs.
• Unit Growth: Anticipated at approximately 10% per year, constrained by production capacity.
• Pricing Strategy: Continued targeted price increases to offset rising costs, with a focus on maintaining full price realization.

4. Challenges and Points of Concern

• FX and Tariff Headwinds: Anticipated 600-650 basis points drag on revenue growth in the first half of FY 2026 due to currency fluctuations; additional 100 basis points impact from tariffs.
• Production Capacity Constraints: Current capacity limits growth potential, particularly for premium products that require more production time.
• Market Competition: Increased discounting by competitors poses a risk to maintaining brand value and pricing power.

5. Notable Q&A Insights

• Demand vs. Capacity: Management emphasized that growth is limited by production capacity rather than demand, with strong sales expected during the holiday season.
• B2B Growth Strategy: The company plans to continue focusing on existing retail partners for growth, with a disciplined approach to new partnerships.
• Regional Performance: EMEA showed strong growth, with expectations for continued performance in Q1 2026.
• Future Capacity Expansion: Investments in production facilities are ongoing, with expectations for improved capacity in the coming years, particularly in Portugal and the new factory near Dresden.

Overall, Birkenstock reported a strong fiscal year 2025 with significant growth and profitability, while outlining cautious optimism for FY 2026 amid external challenges and internal capacity constraints.