Birkenstock Margins Squeezed by U.S. Tariffs and Currency Shifts

The sandalmaker posted adjusted EBITDA of 106 million euros ($125.9 million) for the three months ending in December, an increase of 4% over the previous year. However, the adjusted EBITDA margin dropped to 26.5%, down from 28.2% in the same period last year. The company attributed this decline primarily to the weakening of the U.S. dollar against the euro and the increasing cost of trade tariffs in the United States.

Revenue climbed 11% to reach 402 million euros, largely propelled by an 18% surge in wholesale distribution. In contrast, the direct-to-consumer (DTC) segment saw a more modest 4% increase. This disparity drew caution from analysts at Bernstein, who noted that lagging retail growth can often signal cooling brand momentum, as DTC channels typically offer higher margins and deeper customer engagement.

Strategic Outlook and Long-term Targets

During a recent capital markets event, Birkenstock management reaffirmed its commitment to double-digit revenue growth over the next three years. The company is aiming to restore its adjusted EBITDA margin to above 30% by 2028. CEO Oliver Reichert emphasized a strategy of intentional scarcity, noting that a tight supply chain remains a core part of the business model by design.

Reichert stated that the company will continue to manage its business through specific geography and product channels to maximize profit per pair. While net profit more than doubled to 51 million euros, the focus remains on maintaining brand equity while navigating the macroeconomic pressures currently squeezing the bottom line.