BIRK

Birkenstock Holding Plc: Q1 Fiscal 2026 Summary (Form 6-K)

Business Context and Reporting Period

This filing covers the unaudited interim condensed consolidated financial statements for the three months ended December 31, 2025 (Q1 of Fiscal Year 2026). Birkenstock Holding Plc is a global manufacturer and seller of footbed-based footwear and accessories, operating through three geographic segments: Americas, EMEA, and APAC. The company utilizes a dual-channel distribution strategy comprising Business-to-Business (B2B) and Direct-to-Consumer (DTC) sales.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Reported revenue increased 11% year-over-year (YoY), driven by an 18% increase on a constant currency basis. Growth was observed across all segments, with APAC leading at 28% reported growth.
• Margin Compression: Gross margin declined 460 basis points to 55.7%. Primary drivers included unfavorable currency translation (220 bps), incremental U.S. tariffs (130 bps), and a one-time distributor mark-up reversal related to the acquisition of Birkenstock Australia (170 bps).
• Profitability Surge: Net profit increased 151% YoY to €50.6 million. This was largely due to a significant reduction in net finance costs (down 63% to €9.1 million) driven by a positive revaluation of an embedded derivative in the Senior Notes, alongside strong operating profit growth.
• Acquisition Impact: The company acquired Birkenstock Australia Pty. Ltd. on October 23, 2025. This resulted in a €12.3 million "gain on bargain purchase" recognized in other income and a temporary increase in cost of sales due to distributor mark-up reversals.
• Cash Flow: Operating cash flow was negative €28.3 million, primarily due to a seasonal build-up of inventory (€88.5 million outflow) to prepare for the upcoming season.

Guidance, Outlook, and Risks

• Tariff and Trade Environment: Management notes significant uncertainty regarding U.S. tariffs (currently at least 15% on EU goods) and potential future tariffs. These tariffs are expected to modestly increase cost of sales and negatively impact margins in Fiscal 2026.
• Currency Outlook: The company expects continued adverse foreign currency fluctuations for the quarter ending March 31, 2026.
• Strategic Response: Management plans to mitigate tariff impacts through supplier negotiations, price increases, and optimization of product/geographic mix.
• Legal Contingency: The company is defending an appeal by a former French distributor. The plaintiff's claims in the appeal total approximately €41.6 million. A decision is not expected before the end of the first half of calendar year 2026. A provision has been recognized for the probable cash outflow.
• Seasonality: The business is seasonal, with B2B revenues typically increasing in spring and DTC revenues peaking in summer. The current period reflects inventory build-up for these future sales.

Investor Verification Checklist

• Tariff Impact Quantification: Verify the specific pass-through rate of the 15% U.S. tariff to consumers versus the absorption by the company in future quarters.
• Inventory Levels: Monitor the €831.9 million inventory balance to ensure it converts to sales without significant write-downs, given the €88.5 million cash outflow in Q1.
• FX Sensitivity: Assess the exposure of the €1.11 billion net debt and future earnings to EUR/USD fluctuations, given the significant U.S. revenue exposure (55% of total).
• Legal Provision Adequacy: Review the adequacy of the provision for the French distributor appeal (€41.6 million claim) as the case proceeds to the Paris Court of Appeal.
• Adjusted EBITDA Reconciliation: Confirm the sustainability of Adjusted EBITDA by excluding the one-time €12.3 million bargain purchase gain and the €6.8 million distributor mark-up reversal.