Birkenstock Raises Revenue Outlook for 2025, Buys Production Facility

Birkenstock gave an early glimpse at its fourth quarter earnings ahead of a meeting with analysts and investors at its Munich headquarters on Thursday.

The German footwear maker reported that it expects fourth quarter revenues to total at least 520 million euros, growth of at least 14 percent on a reported basis and 18 percent in constant currency.

This would result in full year revenue of at least 2.09 billion euros, growth of 15.9 percent on a reported basis and 17.5 percent in constant currency, above guidance by 15 percent to 17 percent.

The company also reaffirmed its target for adjusted EBITDA in the range of 31.3 percent to 31.8 percent for the full fiscal year 2025, despite headwinds from foreign exchange rates. 

Birkenstock will release its full fiscal fourth quarter and full year 2025 results on Dec. 18.

In tandem with an early look at Q4 earnings, Birkenstock has acquired a new production facility near Dresden, Germany for a net purchase price of 18 million euros.  The company said it signed the purchase agreement on Sept. 23, and the acquisition is expected to close in the fiscal first quarter later this year.

According to Birkenstock, this facility includes approximately 840,000-square-feet (more than 10 football fields) of production and logistics space and 860,000-square-feet of undeveloped land. The facility was built and expanded between 1992 and 2012, the company said.

Birkenstock added that the opportunity to acquire this property for the attractive price of 240 euros per square meter arose due to the bankruptcy of its current owner. The acquisition will fast track the company’s manufacturing capacity build up plans at a favorable cost to a new build. The factory is expected to be operational by the end of fiscal 2027. 

What’s more, the incremental capacity will support Birkenstock’s revenue growth ambition and allow for more flexibility among product groups. In the first phase, the facility will add to the sandal, clog and footbed capacity. Birkenstock said it will continue to look for opportunities to acquire assets in the European Union.

Following Birkenstock’s meeting on Thursday, analysts were largely optimistic.

“Birkenstock’s financial engine is humming,” Randal Konik, equity analyst at Jefferies, wrote in a note. “Growth is driven by both units (two-thirds) and average selling prices (one-third), supported by a 6-to-9-month order book visibility and minimal leverage (approximately 1.5 times). Business-to-business continues to outpace direct-to-consumer, with 90 percent of growth coming from existing doors and plans to expand into 5,000 additional doors across EMEA and the Americas. Management believes it can double the business every five years, but remains disciplined, controlling output to preserve brand equity.”

Konik also noted that Birkenstock management sees white space across geographies, especially APAC, as well as owned retail and closed-toe footwear styles. As of now, APAC currently contributes just 10 percent of revenues. The company plans to double it China growth relative to the rest of the world, while expanding its owned store base from approximately 100 to 150 by fiscal 2027, with 50 percent of new stores in APAC.

On the product front, closed-toe styles now represent less than 30 percent of the business,” Konik added. “With strong traction in clogs and lace-ups, Birkenstock is evolving into a year-round brand with diversified silhouettes and usage occasions.”

Williams Trading analyst Sam Poser shares in Konik’s optimism for the company’s continued growth.

“Birkenstock remains one of healthiest, most in demand, and best run brands in our coverage,” Poser wrote in a note on Thursday. “Demand for Birkenstock, by design, continues to outpace supply. Demand for the Boston clog continues to accelerate, while the Lutry and Naples Wrapped clogs are building momentum.”