Birkenstock (NYSE:BIRK) reported fiscal fourth-quarter and full-year 2025 results that management said came in ahead of its guidance, while emphasizing that production capacity constraints—not demand—are expected to temper the pace of growth in fiscal 2026.
Fiscal 2025 results came in ahead of guidance
CEO Oliver Reichert said the company delivered “strong results” in fiscal 2025, including revenue growth of 18% in constant currency—above the company’s initial 15% to 17% growth outlook—reaching EUR 2.1 billion. Reichert added that the company grew double digits in every segment and channel, improved profitability, and did so despite “significant tariff and currency pressures.”
CFO Ivica Krolo said fourth-quarter revenue was EUR 526 million, up 20% in constant currency and more than 15% on a reported basis. Krolo attributed the gap between constant currency and reported growth to a 420-basis-point drag from U.S. dollar depreciation versus the prior-year quarter.
By segment in fiscal 2025, Krolo said revenue increased 18% in constant currency in the Americas, 14% in EMEA, and 34% in APAC. By channel, B2B rose 21% and D2C increased 12% in constant currency. The B2B share of business was about 62% for the year, up from 60% in fiscal 2024.
Margins, earnings, and cash flow
Krolo said fourth-quarter gross margin was 58.1%, down 90 basis points year over year, citing FX and incremental U.S. tariffs as pressures. Excluding those factors, he said like-for-like gross margin would have risen 130 basis points to 60.3%.
For the full fiscal year, gross margin increased 30 basis points to 59.1%. Excluding FX and tariff impacts, Krolo said like-for-like gross margin was 59.7%, close to the company’s long-term 60% target.
Adjusted EBITDA was EUR 147 million in the fourth quarter, up 17% year over year, with adjusted EBITDA margin of 27.8%, up 40 basis points. For fiscal 2025, adjusted EBITDA was EUR 667 million, up 20%, and adjusted EBITDA margin improved 100 basis points to 31.8%, which management said met the high end of its target range.
Adjusted net profit rose to EUR 94 million in the fourth quarter, up 71% year over year, while adjusted EPS increased to $0.51 from $0.29. For fiscal 2025, adjusted net profit was EUR 346 million, up 44%, and EPS was EUR 1.85, up 45%, which Krolo attributed to operational performance, lower interest payments, and a lower effective tax rate.
Operating cash flow was EUR 384 million for the year, down 12% from fiscal 2024, which Krolo said was mainly due to the timing of tax payments. The company ended fiscal 2025 with EUR 329 million in cash and cash equivalents after repurchasing 3.9 million shares for EUR 176 million and partially repaying $50 million of a U.S. dollar term loan. Net leverage ended the year at 1.5x, down from 1.8x a year earlier; Krolo said leverage would have been 1.2x without the buyback.
Key growth themes: retail rollout, closed-toe mix, and APAC
Reichert highlighted several “white space” initiatives, including expanding the company’s own retail footprint, increasing closed-toe penetration, and accelerating APAC. The company added 30 new stores in fiscal 2025 and ended the year with 97 stores, more than doubling its store fleet since the IPO. Management said new stores were performing ahead of expectations in productivity and return on capital.
Nico Bouyakhf, president of EMEA, said the company accelerated store openings in the second half of fiscal 2025 and cited new stores in Milan, Mumbai, and Singapore. Looking ahead, management expects to open about 40 new stores globally in fiscal 2026, and Bouyakhf said stores are typically in the 100 to 150 square meter range and located “right next to” AAA locations rather than in the most expensive corridors.
Closed-toe product continued to expand its share of revenue. Reichert said closed-toe share increased 500 basis points year over year to 38% for the year, and that 10 of the company’s top 20 silhouettes in 2025 were closed-toe. Bouyakhf said EMEA’s acceleration in the fourth quarter was driven in part by “product newness and higher price points,” and he highlighted strength in closed-toe categories, including clogs and lace-up shoes. He also said the Naples clog silhouette was growing triple digits and “outgrowing Boston.”
APAC remained the fastest-growing region, up 34% in constant currency in fiscal 2025 and reaching 11% of global revenue, which Reichert said is also the region with the highest ASP. Management said it expects to continue steering APAC growth at roughly double the pace of more mature markets, and Reichert reiterated a long-term aspiration of one-third of business in each of the Americas, Europe, and APAC.
Why fiscal 2026 guidance implies slower growth
Management repeatedly emphasized that demand remains strong, but capacity constraints and distribution discipline are shaping the company’s near-term growth rate. In response to questions about the company’s more moderate fiscal 2026 outlook, Reichert said demand “is not limiting our growth; the capacity does,” noting that clogs can require more than twice the production minutes of sandals and that premium executions further pressure manufacturing.
Krolo provided fiscal 2026 guidance that factors in headwinds from FX and tariffs:
- Constant currency revenue growth: 13% to 15%
- Reported revenue: 10% to 12% to EUR 2.3 to EUR 2.35 billion, reflecting an expected 300 to 350 basis point FX headwind for the full year
- Adjusted gross margin: 57% to 57.5%, inclusive of 100 basis points of pressure from FX and 100 basis points from incremental U.S. tariffs
- Adjusted EBITDA: at least EUR 700 million, implying a 30% to 30.5% adjusted EBITDA margin
- Adjusted EPS: EUR 1.90 to EUR 2.05, including approximately 15% to 20% pressure from FX
- CapEx: EUR 110 million to EUR 130 million
On FX, Krolo said that at an assumed EUR/USD rate of 1.17, the company expects a 600 to 650 basis point headwind to revenue growth in both the first and second quarters, and a 150 to 200 basis point margin impact in each of those quarters. For the full year, he said the FX drag to revenue growth should be 300 to 350 basis points, with about a 100 basis point impact to gross profit and adjusted EBITDA margins.
On tariffs, Krolo said the company expects about 100 basis points of pressure to both gross margin and EBITDA margin in fiscal 2026, and explained that even when pricing offsets tariffs in absolute dollars, it is “not margin neutral.” He added that mitigation efforts include production efficiencies, logistics improvements, and better supplier and vendor terms.
Channel mix: B2B strength expected to continue
Executives said the company is seeing continued strength in wholesale, driven by a consumer shift toward in-person shopping, particularly among younger consumers. Krolo said the company expects B2B growth to continue outpacing D2C in fiscal 2026 and “for the foreseeable future,” though he also said both channels are expected to grow double digits on a constant currency basis.
Reichert and Krolo also linked the wholesale mix shift to capacity planning, noting that higher wholesale volumes and more complex product mix can absorb more production minutes. Reichert described the company’s distribution approach as maintaining scarcity while managing inventory “door by door.”
Management also announced plans to hold a Capital Markets Day at the end of January in New York City, where the company expects to provide a deeper look at its growth drivers, including manufacturing investments, retail expansion, innovation, and APAC.
About Birkenstock (NYSE:BIRK)
Birkenstock Group AG, listed on the New York Stock Exchange under the symbol BIRK, is a global footwear manufacturer renowned for its anatomically contoured footbeds and iconic sandal designs. The company’s core product lines include classic models such as the Arizona, Boston and Madrid, alongside a range of clogs, shoes and orthotic insoles. In addition to footwear, Birkenstock offers complementary accessories, including socks and leather care products, reinforcing its commitment to foot health and comfort.
Birkenstock reaches consumers through a diversified distribution network that combines direct-to-consumer channels—such as branded retail stores and e-commerce platforms—with wholesale partnerships spanning specialty footwear retailers, department stores and select online marketplaces.
