Birkenstock misses quarterly sales estimates, flags Middle East hit
Birkenstock's Second-Quarter Performance and Regional Impacts
Quarterly Sales Results and Market Reaction
May 13 (Reuters) - Birkenstock missed Wall Street estimates for second-quarter sales on Wednesday due to uneven demand for its premium sandals and clogs, and said the Middle East conflict delayed some shipments to the region.
Shares of the German sandal maker were down 8% in premarket trading in New York as it also flagged a 6 million euros ($7.02 million) impact to its Europe, Middle East and Africa (EMEA) segment due to the U.S-Israeli war on Iran.
Impact of Middle East Conflict
About half of the impact came from the company being unable to complete certain deliveries to the region, Birkenstock said, adding that the rest of the impact reflected softer consumer sentiment in Europe driven mainly by higher energy costs and persistent inflation linked to the conflict.
Broader Economic Context
The results come against a more uncertain backdrop for discretionary spending, as geopolitical tensions and elevated inflation temper consumer sentiment. However, premium players such as Birkenstock have been relatively resilient in recent quarters.
Company Strategy Amid Challenges
Birkenstock kept its annual sales and profit forecasts unchanged despite the Middle East impact, as the company leans on controlled distribution and full-price selling.
Regional Revenue Growth
Asia-Pacific Leads Growth
Revenue growth at the company was led by the Asia-Pacific, where sales jumped 22% on a reported basis during the quarter, while the Americas grew 4% and EMEA rose 10%.
Gross Margin and Profitability
Foreign Exchange and Tariff Effects
Gross margin fell to 53.9% from 57.7% a year earlier, hit by foreign exchange pressures and U.S. tariffs, partly offset by higher prices.
Quarterly Revenue and Earnings
It posted quarterly revenue of 618.3 million euros, missing analysts' average estimate of 620.07 million euros, according to data compiled by LSEG.
It earned 0.50 euros per share on an adjusted basis, down 9% from 0.55 euros a year earlier.
($1 = 0.8546 euros)
(Reporting by Savyata Mishra in Bengaluru; Editing by Leroy Leo and Devika Syamnath)
