Birkenstock misses sales estimates amid EMEA conflict headwinds

Birkenstock reported second-quarter revenue of 618.3 million euros, missing the Wall Street average estimate of 620.07 million euros according to data compiled by LSEG. The German sandal maker attributed the shortfall to uneven demand for its premium sandals and clogs, alongside a 6 million euro ($7.02 million) negative impact on its Europe, Middle East and Africa (EMEA) segment linked to the US-Israeli war on Iran.

Shares of the company fell 8% in premarket trading in New York following the announcement. The firm specified that approximately half of the EMEA impact stemmed from an inability to complete certain deliveries to the region, while the remainder reflected softer consumer sentiment in Europe driven by higher energy costs and persistent inflation associated with the conflict.

Despite these headwinds, revenue growth was led by the Asia-Pacific region, where sales jumped 22% on a reported basis. The Americas segment saw 4% growth, while the EMEA segment rose 10%. Birkenstock maintained its annual sales and profit forecasts unchanged, citing its strategy of controlled distribution and full-price selling as factors supporting resilience in an uncertain backdrop for discretionary spending.

Gross margin contracted to 53.9% from 57.7% a year earlier, pressured by foreign exchange fluctuations and US tariffs. These pressures were partly offset by higher prices. Adjusted earnings per share declined 9% to 0.50 euros, down from 0.55 euros a year earlier.

The results underscore the broader challenges facing consumer sentiment globally, as geopolitical tensions and elevated inflation temper spending. However, premium brands like Birkenstock have remained relatively resilient in recent quarters, navigating the complex interplay of supply chain disruptions and shifting regional demand.