Birkenstock Holding plc (NYSE: BIRK) stock jumped Thursday after the footwear company reported better-than-expected fiscal third-quarter sales and raised its full-year revenue and adjusted EBITDA outlook. During the earnings conference call, Birkenstock said demand remained strong despite inflationary pressure on consumer wallets and increased markdown activity across the broader retail industry.
Earnings Snapshot
Birkenstock reported adjusted earnings of 86 cents per share, narrowly missing the analyst estimate of 87 cents. Sales of $836.49 million topped the consensus estimate of $822.83 million.
In euro terms, third-quarter revenue rose 13% year over year to 720 million euros and increased 15% on a constant-currency basis.
CEO Oliver Reichert said Birkenstock delivered a strong third quarter, underscoring the continued strength of the brand.
Adjusted net profit rose 15% to 134 million euros, while adjusted earnings per share increased 19% to 0.74 euros. Adjusted EBITDA climbed 11% to 242 million euros. However, the adjusted EBITDA margin narrowed 70 basis points to 33.7%.
Margins faced pressure from foreign exchange and U.S. tariffs. Adjusted gross margin fell 130 basis points to 59.2%, reflecting a 60-basis-point currency hit and a 70-basis-point impact from incremental U.S. tariffs. Improved capacity absorption partly offset those pressures.
DTC Growth Accelerates
Direct-to-consumer revenue increased 14%, or 16% at constant currency, outpacing business-to-business growth of 13%, or 15% at constant currency. Birkenstock added 13 company-owned stores during the quarter, bringing its global total to 124.
Growth remained broad across regions. Americas revenue increased 11%, EMEA sales rose 15% and APAC revenue jumped 18%. On a constant-currency basis, growth was 14%, 15% and 23%, respectively. Excluding Australia, APAC growth approached 30%.
Birkenstock invested about 26 million euros in capital expenditures during the quarter, primarily to expand production capacity and its global retail operations.
Operating cash flow totaled 246.5 million euros in the quarter, compared with 260.6 million euros a year earlier.
The company ended June with 694 million euros in cash and cash equivalents. Net leverage increased to 1.8 times from 1.5 times at the end of September following a 230 million-euro accelerated share repurchase.
Birkenstock Raises 2026 Outlook
In euro terms, the company raised its constant-currency revenue growth outlook to 15% and expects reported revenue at the high end of its previous 2.30 billion-euro to 2.35 billion-euro range.
Birkenstock also raised adjusted EBITDA guidance to at least 710 million euros, with an adjusted EBITDA margin of 30.2% to 30.5%.
The company maintained its adjusted gross margin outlook of 57% to 57.5% and adjusted earnings guidance of 1.90 euros to 2.05 euros per share.
It raised its expected tax rate to 30% to 31% from 26% to 28%, primarily because of non-deductible, non-cash expenses tied to refinancing and the accelerated share repurchase.
BIRK Price Action: Birkenstock Holding shares were trading up 16.88% at $42.94 at the time of publication on Thursday, according to Benzinga Pro data.