BIRK — Birkenstock Holding plc

Summary of Birkenstock's Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenue: EUR 618 million, up 8% reported; 14% growth in constant currency.
• Adjusted EBITDA: EUR 198 million, down 1% year-over-year; adjusted EBITDA margin at 32.1%, down 270 basis points.
• Adjusted Net Profit: EUR 93 million, down 10% year-over-year; adjusted EPS at EUR 0.50, down 9%.
• Gross Profit Margin: 53.9%, down 380 basis points; adjusted gross profit margin at 54.6%, down 310 basis points.
• Cash Position: EUR 201 million in cash and cash equivalents; generated EUR 29 million in operating cash.
• Inventory to Sales Ratio: 39%, up from 36% year-over-year, primarily due to FX impacts and increased work in progress.

2. Strategic Updates and Business Highlights

• Growth in Regions: APAC grew 30% in constant currency, significantly outpacing other regions. EMEA grew 11%, and Americas grew 14%.
• Retail Expansion: Opened 5 new retail stores, totaling 111 globally, on track to reach 140 by fiscal year-end.
• D2C Performance: D2C sales grew over 60% in constant currency, with same-store sales up double digits.
• Supply Chain Resilience: Successfully navigated disruptions from geopolitical conflicts and secured alternative delivery routes.

3. Forward Guidance and Outlook

• Fiscal 2026 Guidance: Reiterated revenue growth target of 13% to 15% in constant currency, expecting reported revenue growth of 10% to 12% due to FX headwinds.
• Adjusted EBITDA: Expected to be at least EUR 700 million, implying an adjusted EBITDA margin of 30% to 30.5%.
• Capital Expenditures: Anticipated between EUR 110 million to EUR 130 million for the year.
• Share Repurchase: Intention to repurchase shares for a total consideration of $200 million, subject to market conditions.

4. Bad News, Challenges, or Points of Concern

• Geopolitical Risks: Ongoing conflicts in the Middle East impacted EMEA revenue by approximately EUR 6 million and reduced growth by 300 basis points.
• Inflationary Pressures: Rising energy costs and tariffs are expected to continue affecting margins, with tariffs now at over 20%.
• Consumer Sentiment: Concerns about muted consumer sentiment in Europe due to inflation and energy costs, which could impact future sales.
• Inventory Growth: Inventory grew faster than revenue, raising concerns about working capital management.

5. Notable Q&A Insights

• Capacity Constraints and Consumer Sentiment: Management expressed confidence in demand despite external pressures, emphasizing their ability to navigate challenges through a diversified product range.
• Middle East Exposure: The company is actively exploring alternative shipping routes and focusing on resilient markets like Saudi Arabia to mitigate risks.
• Tariff Impact: Management indicated that while tariffs are a concern, they have a strong inventory position and pricing strategies to manage margin pressures.
• Digital Growth Initiatives: Investments in digital marketing and online transformation are expected to drive future growth, particularly in the Americas.

Overall, Birkenstock demonstrated resilience in a challenging environment, with strong revenue growth and strategic initiatives in place, although geopolitical and inflationary pressures remain significant concerns.