Birkenstock Holding 2025 Q3 Earnings Strong Performance as Net Income Surges 73.1%

Birkenstock Holding (BIRK) reported robust Q3 fiscal 2025 results, with both revenue and net income surpassing prior-year levels. The company’s revenue rose 12.4% year-over-year, and net income grew by 73.1%, reflecting enhanced operational efficiency and strategic pricing. Management maintained a confident outlook, guiding for full-year revenue growth of 15% to 17% in constant currency despite ongoing foreign exchange and tariff pressures.

Revenue
Birkenstock's total revenue reached $635.04 million in the third quarter of 2025, reflecting a 12.4% year-over-year increase from $564.76 million. The B2B segment was a key driver, generating $390.16 million in revenue, showcasing the channel’s cost efficiency and alignment with the return to in-person shopping. The DTC segment also performed strongly, contributing $243.89 million, while other revenue streams added $995,000 to the total.

Earnings/Net Income
Earnings per share (EPS) surged 72.5% year-over-year to $0.69 in Q3 2025 from $0.40 in Q3 2024, highlighting the company’s improved profitability. Net income reached $129.23 million, up 73.1% from $74.64 million, marking a new three-year high for fiscal Q3. This performance underscores Birkenstock’s ability to manage global headwinds while driving margin expansion.

Price Action
Birkenstock's stock has shown mixed short-term performance, with a 0.62% decline on the most recent trading day and a 0.21% drop for the week. However, it has gained 4.15% month-to-date, indicating some investor optimism.

Post-Earnings Price Action Review
A strategy of purchasing BIRK shares 30 days after the Q3 earnings report, which showed a quarterly revenue increase, underperformed significantly. The strategy returned -10.35%, compared to a 29.91% benchmark return, yielding an excess return of -40.26%. The negative CAGR of -7.10% and a Sharpe ratio of -0.73 highlight the substantial risk and underperformance associated with this approach. Additionally, the strategy experienced no maximum drawdown, underscoring the lack of downside protection.

CEO Commentary
CEO Oliver Reichert emphasized the company’s strong Q3 performance, noting 16% revenue growth and improved profitability amid global challenges such as tariffs and currency volatility. He credited the B2B channel’s efficiency and the brand’s momentum, including double-digit growth across segments and product lines. Reichert also highlighted strategic investments in store openings, production capacity, and IT infrastructure to support long-term efficiency and demand.

Guidance
Birkenstock expects full-year revenue growth of 15% to 17% in constant currency, with an adjusted EBITDA margin between 31.3% and 31.8%. The company plans to invest approximately EUR 80 million in capital expenditures, prioritizing production expansion and IT enhancements. Foreign exchange headwinds are expected to reduce reported growth by 400 basis points in Q4 and lower margins by 100 basis points. Despite these challenges, the company remains confident in its long-term growth trajectory, with APAC projected to grow twice as fast as other regions and store counts approaching 100 by year-end.

Additional News
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