Iconic German footwear maker Birkenstock is warning that U.S. import tariffs and other macro headwinds will dampen profit margins and moderate revenue growth in fiscal 2026, according to recent company guidance.
While the brand reported strong demand and solid revenue gains in its most recent quarter, tariff‑related cost pressures are expected to shave roughly a percentage point from gross margins and contribute to a more tempered outlook compared to prior years.
Tariff Impact Meets Slower Growth Outlook
Birkenstock forecasts fiscal 2026 gross profit margins in the 57%–57.5% range, down from around 59.1% in fiscal 2025, reflecting the drag from U.S. import duties on European goods. Management expects that this tariff pressure will hit the company’s cost of goods sold (COGS) more in 2026 than it did the prior year.
The company’s full‑year revenue growth is projected at 13%–15% on a constant currency basis, lower than recent years, and adjusted earnings per share are forecast in a range that slightly trails Wall Street estimates.
Mixed Performance and Market Reaction
In its latest financials, Birkenstock delivered double‑digit revenue increases — including about 15% year‑over‑year growth in its fourth quarter — but investors reacted poorly to the more cautious 2026 outlook. Shares slid in pre‑market trading as analysts weighed the implications of persistent cost pressures and slower near‑term growth expectations.
Management noted that while consumer demand remains strong, the tariff effect — combined with currency translation headwinds — will be a defining factor in next year’s margin performance.
Strategic Responses to Headwinds
To mitigate tariff impacts, Birkenstock has already taken steps such as targeted price increases, vendor cost negotiations and operational efficiency enhancements. However, executives stress that tariff effects are external and unavoidable in the near term.
Despite these challenges, the company continues to invest in its own‑retail expansion, with plans to open roughly 40 new stores globally in fiscal 2026, and maintain an overall posture of measured growth balanced with strong brand demand.
Conclusion
Birkenstock’s updated fiscal 2026 guidance highlights how policy decisions such as U.S. tariffs can ripple through global supply chains and corporate planning, particularly for brands with a high proportion of imported product.
While the brand’s demand fundamentals remain solid, tariff pressures and margin compression underscore the complex interplay between geopolitics and retail profitability heading into 2026.
More about tariffs:
Staff Report
Staff Report
Dan Craft
