Birkenstock (BIRK) Q3 2025 Earnings Transcript

Core Insights - The company reported a 16% revenue growth in constant currency for the third quarter, achieving double-digit growth across all segments and channels while improving profitability with a gross margin of 60.5% and an EBITDA margin of 34.4% [1][11][14] - The shift towards in-person shopping has positively impacted the brand, particularly in the B2B channel, which has outpaced DTC growth [5][12][32] Financial Performance - Third quarter revenues reached EUR 635 million, with a reported revenue growth of 12% impacted by foreign exchange fluctuations [11][12] - B2B revenue grew 18% in constant currency, while DTC grew 12%, with DTC's share of business decreasing to 38% [12][14] - Adjusted net profit for the quarter was EUR 116 million, reflecting a 26% year-over-year increase, and adjusted EPS rose to EUR 0.62, up from EUR 0.49 [14] Market Dynamics - Retail revenue at the top 10 wholesale partners in the U.S. increased by 25%, while EMEA saw a 20% increase, indicating strong sell-through and inventory turnover [5][8] - The company opened 13 new retail stores, aiming for a total of around 100 by the end of the fiscal year, which is expected to enhance DTC performance [6][9] Product Demand - Demand for classic leather silhouettes and iconic styles like Arizona and Boston remains strong, with closed-toe revenue share increasing by 400 basis points year-over-year [7][12] - The company anticipates that the APAC region will grow twice as fast as other segments for the full year, with a 24% revenue increase in constant currency [9][10] Strategic Initiatives - The company is focused on maintaining relative scarcity in distribution and has implemented price increases to manage the impact of tariffs, with no negative market response observed [17][30] - Investments in production capacity and efficiency improvements are ongoing, with a CapEx target of around EUR 80 million for the year [16][47] Future Outlook - The company expects to achieve the high end of its constant currency revenue growth guidance of 15% to 17% for the fiscal year, despite anticipated currency headwinds [19][20] - The management remains confident in sustaining long-term growth and profitability objectives, with a net leverage target of approximately 1.5x by the end of fiscal '25 [16][17]