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01/11 08:03
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with high revenue growth expectations and robust demand across regions. Positive indicators include a strong APAC growth forecast, strategic store expansion, and B2B outpacing DTC growth. Despite some FX and tariff challenges, the company is mitigating these through strategic pricing and production efficiencies. The Q&A session supports these positives, highlighting strong consumer demand and confidence in sustaining growth. Although there are some uncertainties in production capacity, the overall sentiment remains positive, suggesting a likely 2% to 8% stock price increase.
Revenue Full year revenue growth of 18% in constant currency, reaching EUR 2.1 billion, the best year in the company's history. This was above the 15% to 17% range provided at the beginning of the year. Reasons for growth include strong demand across all segments, categories, and channels, as well as targeted price actions and a higher share of premium products.
Gross Margin Gross margin improved by 30 basis points to 59.1% for the fiscal year. Excluding FX and tariff impacts, the margin was up 90 basis points to 59.7%. The improvement was driven by operational efficiencies and targeted price increases.
Adjusted EBITDA Margin Adjusted EBITDA margin increased by 100 basis points to 31.8% for the fiscal year, meeting the high end of the target range. Excluding FX and tariff impacts, the margin was up 170 basis points to 32.5%. This was due to strong operational performance and cost management.
Units Sold 38 million pairs sold in fiscal 2025, up over 12% year-over-year. The increase was supported by strong demand and a 5% increase in ASP (average selling price) in constant currency, driven by targeted price actions and a higher share of premium products.
B2B Channel Growth B2B channel revenue grew by 21% in constant currency, with its share of business increasing to 62% from 60% in fiscal 2024. Growth was driven by strong wholesale demand, especially among younger demographics.
APAC Segment Growth APAC segment revenue grew by 34% in constant currency, approximately double the pace of more mature markets. APAC's share of global revenue increased to 11%, supported by higher ASP and strong demand.
Adjusted Net Profit Adjusted net profit for the fiscal year was EUR 346 million, up 44% year-over-year. This growth was driven by strong operational performance, lower interest payments, and a lower effective tax rate.
Cash Flow from Operating Activities Cash flows from operating activities were EUR 384 million for the fiscal year, down 12% from fiscal 2024. The decline was mainly due to the timing of tax payments.
Inventory to Sales Ratio Inventory to sales ratio declined to 34% for the year from 35% in fiscal 2024, indicating improved inventory management.
Capital Expenditures (CapEx) Approximately $85 million spent in CapEx during the fiscal year, focused on adding production capacity, retail, and IT investments.
Closed-toe shoes: Revenue share increased by 500 basis points year-over-year to 38%. Non-Boston closed-toe silhouettes grew over 30%.
Boston silhouette: Continues to lead the clog category and turns 50 years in 2026.
APAC growth: Grew 34% in constant currency, now 11% of global revenue. APAC has the highest ASP and is expected to grow at double the pace of mature markets.
Retail expansion: Added 30 new stores in 2025, ending the year with 97 stores. Plans to open 40 new stores in 2026, targeting 150 stores ahead of schedule.
Production capacity: Invested over EUR 150 million to expand production capacity. Production constraints remain a challenge due to high demand for premium products.
B2B and D2C growth: B2B channel grew 21% and D2C grew 12% in constant currency. B2B share increased to 62% of business.
Maintaining scarcity: Focused on disciplined distribution growth and maintaining over 90% full price realization.
Youth demographic: Strong wholesale growth driven by Gen Z, with a shift towards in-person shopping.
Tariff and Currency Pressures: The company faces significant headwinds from FX and tariffs, with a 600-650 basis points impact on revenue growth in the first half of fiscal 2026 and a 300-350 basis points impact for the full year. Tariffs are expected to cause a 100 basis point decline in both gross and EBITDA margins.
Production Capacity Constraints: The company is constrained by its production capacity, which limits its ability to meet growing demand, particularly in the B2B channel and for premium products that require more production time.
Supply Chain Pressure: The vertically integrated supply chain is under pressure due to the combination of increased wholesale demand and the production of premium products, which require more production minutes.
Economic and Geopolitical Challenges: The company operates in an environment affected by global tariffs, international trade changes, the war in Ukraine, and an energy crisis, which pose risks to operations and financial performance.
FX Impact on Profitability: Nearly all costs of goods sold (COGS) and a majority of SG&A expenses are in euros, making the company vulnerable to currency fluctuations, particularly the depreciation of the U.S. dollar.
Strategic Growth Risks: The company’s growth strategy, including plans to open 40 new stores and expand in the APAC region, is dependent on managing production responsibly and maintaining brand scarcity, which could be challenging.
Revenue Growth: Targeting constant currency revenue growth of 13% to 15% for fiscal 2026, with reported revenue growth of 10% to 12% due to FX headwinds, reaching EUR 2.3 billion to EUR 2.35 billion.
Adjusted EBITDA: Expected to be at least EUR 700 million for fiscal 2026, with an adjusted EBITDA margin of 30% to 30.5%, inclusive of FX and tariff pressures. Excluding these factors, the margin would be 32% to 32.5%.
Gross Margin: Forecasted to be 57% to 57.5% for fiscal 2026, including 100 basis points of pressure from FX and 100 basis points from incremental U.S. tariffs.
Unit Growth: Targeting approximately 10% unit growth per year, balancing supply chain constraints and maintaining product scarcity.
Capital Expenditures: Planned to be in the range of EUR 110 million to EUR 130 million for fiscal 2026, focusing on production capacity, retail, and IT investments.
Retail Expansion: Plan to open about 40 new retail stores globally in fiscal 2026, aiming to reach the 150-store target ahead of schedule.
APAC Growth: APAC market expected to grow at double the pace of more mature markets, continuing its 34% growth trajectory in constant currency.
Share Repurchases: Intend to repurchase shares for a total consideration of $200 million during fiscal 2026, subject to market conditions.
Share Buyback Program: The company repurchased 3.9 million shares totaling EUR 176 million during fiscal 2025. Additionally, Birkenstock plans to repurchase shares for a total consideration of $200 million during fiscal 2026, subject to market conditions.
The earnings call reveals strong financial performance with high revenue growth expectations and robust demand across regions. Positive indicators include a strong APAC growth forecast, strategic store expansion, and B2B outpacing DTC growth. Despite some FX and tariff challenges, the company is mitigating these through strategic pricing and production efficiencies. The Q&A session supports these positives, highlighting strong consumer demand and confidence in sustaining growth. Although there are some uncertainties in production capacity, the overall sentiment remains positive, suggesting a likely 2% to 8% stock price increase.
Birkenstock's earnings call reveals strong financial performance with record revenue growth, optimistic guidance, and successful product expansion. Although there are capacity constraints and tariff impacts, the company is mitigating these through strategic investments and strong inventory management. The positive market response to price adjustments and expansion plans further supports a positive sentiment. Despite some management evasiveness on specifics, the overall outlook, including strong DTC and B2B growth, suggests a positive stock price movement in the near term.
The earnings call presented strong financial performance with a 23% increase in adjusted EBITDA and a 33% rise in net profit. Despite macroeconomic uncertainties, management expressed confidence in offsetting tariff impacts and maintaining strong demand. The Q&A highlighted positive trends in consumer demand and store expansion. The company is on track to meet CapEx targets and reduce debt. While there was some ambiguity in responses about demand management, overall financial health and strategic plans suggest a positive outlook for stock price movement.
Birkenstock's earnings call highlights strong financial performance with 22% revenue growth and improved EBITDA, despite some margin decline due to expansion. The company maintains optimistic guidance and strategic growth plans, including market penetration in APMA and expansion in the closed-toe category. The Q&A section supports positive sentiment with balanced growth expectations and strong momentum in specific segments. The focus on debt reduction and shareholder value further enhances the outlook. Despite competitive pressures and regulatory challenges, the overall sentiment is positive, likely leading to a stock price increase of 2% to 8%.
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