Birkenstock's Q3 2025 Earnings Call: Unpacking Contradictions in Tariff Strategy, Sales Dynamics, and Production Capacity

Tariff impact and pricing strategy, DTC and B2B sales growth dynamics, demand and production capacity balance are the key contradictions discussed in Birkenstock Holding plc's latest 2025Q3 earnings call.



Revenue and Profitability Growth:
- Birkenstock Holding plc reported revenue growth of 16% in constant currency for Q3 2025, with a gross margin increase to 60.5% and an EBITDA margin of 34.4%.
- The growth was driven by strong demand across all product categories and regions, despite global challenges such as tariffs and currency volatility.

Shift to In-Person Shopping and B2B Channel:
- Birkenstock saw a shift towards in-person shopping, which amplified its brand and B2B channel performance.
- The B2B segment, with 90% of growth coming from existing doors, outperformed the DTC segment due to the brand's touch and feel nature, especially for new customers.

Tariffs and Pricing Strategy:
- With the EU tariff increasing to 15%, Birkenstock implemented targeted price increases to offset the impact.
- The company managed to fully offset the absolute dollar impact of tariffs through pricing and other cost optimization strategies, noting only a minor negative impact on gross margin.

Product Expansion and ASP Growth:
- Sales of closed-toe styles increased by 400 basis points year-over-year, contributing to an increase in average selling price (ASP).
- The growth in closed-toe and leather products, along with strong demand from emerging youth markets, drove up ASP and sales across product categories.

Regional Performance and DTC Growth:
- In EMEA, despite challenges, Birkenstock reported double-digit growth, with B2B outpacing DTC.
- The company attributed the growth to strong sell-through rates and reorders at retail partners, although limited production capacity impacted demand capture.