- Co expects a 100 bps tariff hit to FY26 gross margins
- Fiscal 2026 revenue growth view lower than previous two years
- Shares fall about 5%
Dec 18 (Reuters) - Birkenstock on Thursday forecast fiscal 2026 profit below Wall Street expectations and annual revenue growth lower than the last two years as U.S tariffs hurt margins and cautious consumer spending dampen demand for its sandals and clogs.
Its shares fell nearly 5% in early trading after the German footwear company warned of a 100 basis-point hit to its annual gross margins from U.S. import duties.
Birkenstock, known for its higher-priced "Arizona" sandals and "Boston" clogs, joins a long list of global consumer companies whose business operations have been hobbled by sweeping U.S. tariffs, while hurting shoppers with elevated prices of food, furniture and other imported goods.
The Trump administration had imposed a 15% import tariffon most goods from the EU under a deal reached with the 27-nation bloc in July.
"In 2026...we expect to see more impact from tariffs in COGS (cost of goods sold) than we did in 2025," Chief Financial Officer Ivica Krolo said on a post-earnings call.
The company was able to offset most of the 2025 impact with targeted price hikes, while also benefiting from shipping a big share of its goods for 2025 before the tariff hike, Krolo said.
Birkenstock makes a majority of its products in Germany and has been focusing on measures like raising prices, as well as manufacturing efficiency to counter tariff impact.
The company expects fiscal 2026 gross profit margin to be in the range of 57% to 57.5%, compared with 59.1% in 2025.
It forecasts adjusted earnings per share between 1.90 and 2.05 euros, compared with expectations of 2.08 euros, according to data compiled by LSEG.
The company expects annual revenue growth of 13% to 15%, excluding currency fluctuations, lower than fiscal 2024 and 2025.
"This appears more so an example of an externality-driven expectation shortfall, than a business one," said Simeon Siegel, analyst with Guggenheim Securities.
Birkenstock has been expanding its retail presence, while also introducing newer collections and seasonal drops to attract younger affluent shoppers.
The company opened 30 stores this year and aims to start about 40 more globally in fiscal 2026.
It posted fourth-quarter revenue of 526.3 million euros ($616.88 million), compared with analysts' average estimate of 522.6 million euros.
($1 = 0.8532 euros)
Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Arun Koyyur
Source: Reuters