BIRK — Birkenstock Holding plc

Summary of BIRK Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenue: €402 million, up 11% reported and 18% in constant currency, exceeding the annual guidance of 13% to 15%.
• Gross Profit Margin: 55.7%, down 460 basis points year-over-year; adjusted gross profit margin at 57.4%, down 290 basis points.
• Adjusted EBITDA: €106 million, up 4% year-over-year; adjusted EBITDA margin at 26.5%, down 170 basis points.
• Adjusted Net Profit: €49 million, up 47% year-over-year; adjusted EPS at €0.27, up 50%.
• Cash Position: Ended the quarter with €229 million in cash and cash equivalents.
• Inventory-to-Sales Ratio: 39%, flat year-over-year; Days Sales Outstanding (DSO) increased to 20 from 15.
• CapEx: Approximately €38 million spent on production capacity and retail investments.

2. Strategic Updates and Business Highlights

• Growth Strategy: Aiming for 13% to 15% top-line growth in constant currency over the next three years, with a focus on optimizing profitability per pair while maintaining brand equity.
• Market Penetration: Significant growth potential identified in the Americas (largest segment), EMEA, and APAC, with APAC expected to grow at double the pace of other segments.
• B2B vs. DTC: B2B growth outpacing DTC, with B2B up 24% in constant currency and DTC up 12%. The company plans to balance channel growth while investing in its own retail.
• Store Expansion: Added nine new stores, totaling 106, with plans for 40 new stores in fiscal 2026 to capture in-person shopping demand.

3. Forward Guidance and Outlook

• Revenue Growth: Expecting constant currency revenue growth of 13% to 15% for the full year, despite significant headwinds from foreign exchange (FX) and tariffs.
• Margin Expectations: Anticipating adjusted gross margin of 57% to 57.5% for fiscal 2026, with adjusted EBITDA of at least €700 million, implying a margin of 30% to 30.5%.
• CapEx Guidance: Projected CapEx for fiscal 2026 is between €110 million to €130 million.
• Share Repurchase: Plans to repurchase €200 million in shares, subject to market conditions.

4. Bad News, Challenges, or Points of Concern

• FX Headwinds: Significant impact from FX on revenue growth, with an expected 700 basis point headwind in Q2 and approximately 350 basis points for the full year.
• Margin Pressure: Anticipated margin pressure from tariffs and FX, expected to impact gross profit and adjusted EBITDA margins by 200 to 250 basis points in Q2.
• Seasonality: Q1 is the smallest quarter for revenue, making it less indicative of overall annual performance.

5. Notable Q&A Insights

• Demand Momentum: CEO Oliver Reichert expressed confidence in durable demand, citing strong sell-through rates and full-price realization above 90%.
• Inventory Allocation: The company is strategically allocating inventory to optimize brand strength and profitability across channels and geographies.
• Gen Z Engagement: The brand is successfully attracting Gen Z customers, with strong interest in classic silhouettes like the Boston, indicating potential for long-term customer relationships.
• Retail Performance: Own retail stores showed over 50% year-over-year growth in Q1, with same-store sales growth in high single digits.
• Insider Buying: CFO Ivica Krolo indicated a desire among insiders to buy shares at current prices, highlighting perceived undervaluation.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, challenges, and insights from the Q&A session, providing a comprehensive overview of Birkenstock's performance and outlook for Q1 2026.