Birkenstock shares slide as Middle East conflict hits sales

Birkenstock missed Wall Street estimates for second-quarter sales on Wednesday, as the German footwear manufacturer contended with uneven demand for its premium products and logistical delays stemming from regional instability. The company reported that the ongoing Middle East conflict has obstructed shipments and dampened consumer appetite across Europe, leading to a notable decline in share value.

Following the announcement, Birkenstock shares fell by as much as 13 per cent in New York trading. The company flagged a €6 million (approximately $7.02 million) impact on its Europe, Middle East, and Africa (EMEA) segment. Executives attributed roughly half of this shortfall to the physical inability to complete deliveries into the region, while the remainder reflected a softening of consumer sentiment in Europe, exacerbated by high energy costs and persistent inflation.

Despite these headwinds, the manufacturer’s overall revenue rose by 8 per cent on a reported basis to €618.3 million. This figure fell just short of the €620.07 million average analyst estimate compiled by LSEG. Profitability also saw a contraction, with adjusted earnings per share landing at €0.50—a 9 per cent decrease from the previous year and below the anticipated €0.59. Gross profit margins narrowed to 53.9 per cent from 57.7 per cent, pressured by unfavourable foreign exchange movements and increased United States tariff exposure.

The Asia-Pacific region emerged as a primary growth engine, with sales jumping 22 per cent on a reported basis. In contrast, the Americas grew by 4 per cent, while the EMEA region recorded a 10 per cent increase. Oliver Reichert, the Chief Executive, noted that while war-driven inflation is affecting discretionary spending, the brand remains resilient by maintaining a strategy of controlled distribution and full-price selling.

Birkenstock has opted to keep its annual sales and profit forecasts unchanged, projecting constant-currency revenue growth of 13 to 15 per cent for the 2026 fiscal year. The company continues to expand its retail footprint, aiming to reach a target of 140 stores by year-end to bolster its direct-to-consumer presence.