Birkenstock shares plunge 9% as German sandal maker warns tariffs will slam profits

Core Viewpoint - Birkenstock's shares fell 9% due to warnings about profit margin impacts from US tariffs, with expectations of a 1% drop in annual gross margins for the fiscal year ending September 30, 2026 [1][8]. Financial Performance - The company anticipates adjusted EBITDA of at least 700 million euros (approximately $821.8 million), with a margin of 30% to 30.5%, down from 31.8% in the previous year [2]. - Revenue growth is expected to slow to 10% to 12%, translating to roughly $2.7 billion to $2.8 billion, factoring in negative currency effects [5]. - The previous fiscal year saw a 16% revenue increase to about $2.5 billion, exceeding estimates [6]. Tariff Impact - The company reported that tariffs reduced adjusted EBITDA and gross margins by approximately 30 basis points in the previous fiscal year [6]. - A forecasted 100 basis point hit to annual gross margins is expected due to US tariffs in the new fiscal year [8]. Market Outlook - CEO Oliver Reichert expressed confidence in continued strong consumer demand and double-digit growth through 2026 [8][9]. - The company plans to open around 40 new stores globally in 2026 and initiate a $200 million share buyback [13]. Sales Performance - Direct-to-consumer sales growth was reported at 11% for the previous fiscal year, compared to 20% growth in wholesale [14]. - Analysts from Bernstein cautioned about the company's momentum, noting better performance in wholesale than retail [13][15].