Birkenstock (BIRK) Q1 2026 Earnings Transcript

Core Insights - Birkenstock Holding plc reported strong financial results for Q1 2026, with revenues of €402 million, reflecting an 11% increase on a reported basis and an 18% increase in constant currency, exceeding the annual guidance of 13% to 15% growth [9][12][20] - The company expects to maintain a growth trajectory of 13% to 15% in constant currency over the next three years, with a focus on optimizing profitability and brand equity [5][22] Financial Performance - Q1 2026 revenues were driven by strong demand during the holiday season, with B2B sales up 24% in constant currency and DTC sales up 12% [9][12] - Gross profit margin for Q1 was 55.7%, down 460 basis points year-over-year, while adjusted gross profit margin was 57.4%, down 290 basis points [13] - Adjusted EBITDA for Q1 was €106 million, up 4% year-over-year, with an adjusted EBITDA margin of 26.5% [14] Market Growth and Strategy - The Americas segment continues to grow in double digits, with significant room for growth in the U.S. market, where penetration is only about 5% [6][7] - EMEA markets like Germany and Austria have reached similar penetration levels as the U.S. but still show double-digit growth potential [7] - APAC is identified as a key growth area, with plans to double revenue from this region by 2028 [8] Product and Channel Insights - The company is focusing on balancing B2B and DTC growth, with B2B expected to outpace DTC in the near term [8] - The closed-toe segment accounted for nearly 60% of revenue in Q1, indicating a successful expansion beyond sandals [11] - Retail expansion is a priority, with nine new stores added in Q1, bringing the total to 106 [10] Future Outlook - The company anticipates significant headwinds from foreign exchange and tariffs in Q2, projecting a revenue growth headwind of approximately 700 basis points [18][19] - For fiscal 2026, the company expects adjusted EBITDA of at least €700 million, implying an adjusted EBITDA margin of 30% to 30.5% [20][21] - The expected tax rate is projected to be between 26% to 28%, with adjusted EPS anticipated to be between €1.90 to €2.05 [21]