By Savyata Mishra
(Reuters) -Birkenstock beat third-quarter profit expectations on Thursday on strong demand for its clogs and shoes at full price, and said it was well placed to manage the hit from a 15% U.S. tariff on European imports.
Shares of the German sandal maker fell 3% in early trading after company executives warned that a weaker dollar would hurt its revenue and margins in the fourth quarter.
The company, however, stuck to its annual forecasts for margin and revenue on strong demand despite price hikes to offset tariff impact.
Its suede leather closed-toe Boston clogs, which sell at $179.95 online, have seen firm demand from wealthy shoppers, boosting its gross margin by 100 basis points to 60.5%.
Birkenstock makes 95% of its shoes at its factories in Germany and expects to manage the fallout of U.S. tariffs through price increases, cost discipline and inventory management, CEO Oliver Reichert said.
“We saw no pushback or cancellations following the July 1 price increases implemented in response to tariffs,” he said on a post-earnings call.
Strong full-price sales have also boosted performance at high-end peers such as On Holding and Deckers Outdoor which owns Hoka and Ugg.
Birkenstock’s sales in Americas grew 16% after accounting for currency fluctuations, compared with 20% growth in the previous three months.
There is a strong appetite from retailers for Birkenstock’s products, but it is maintaining a high level of relative scarcity, Americas President David Kahan said.
Its wholesale channel sales rose 15% on solid demand from U.S. retailers, outpacing a 9% rise in direct-to-consumer sales globally.
Quarterly revenue of 635 million euros ($741.49 million) narrowly missing expectations of 636.74 million euros, according to data compiled by LSEG. On an adjusted basis, it earned 62 euros per share, above the estimate of 60 euros.
Birkenstock maintained fiscal 2025 revenue growth at the high-end of its forecast range of 15% to 17%, while its expectations for adjusted EBITDA margin – a measure of profitability – was unchanged at 31.3% to 31.8%.
($1 = 0.8564 euros)
(Reporting by Savyata Mishra in Bengaluru; Editing by Shilpi Majumdar and Arun Koyyur)
