Birkenstock sees muted sales growth and profit as tariffs hurt margins

Dec 18 (Reuters) - ‌Birkenstock on Thursday forecast fiscal 2026 profit below Wall Street expectations and ‍annual ‌revenue growth lower than the last two years, in a sign that tariff ⁠uncertainty is dampening demand for the ‌German footwear company.

Its shares fell 7% in premarket trading after the company forecast a 100 basis points 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 tariff on most goods from the EU under a deal reached with the 27-nation ​bloc in July.

The company, which makes a majority of its products in Germany, has taken up several measures including targeted price hikes, vendor negotiations, manufacturing efficiency and product optimization to counter tariff impact.

Birkenstock expects the fiscal 2026 gross profit ​margin to ‍be in the range ​of 57% to 57.5%, compared with 59.1% in 2025.

It forecast 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)