Birkenstock - comment

Q2 results were ahead of our expectations. Improved cost absorption at Birkenstock’s new plant and rising volumes pushed gross margin up by 140bps (with a further 75bp increase in H2); the increased gross margin flowed through to EBITDA, and margin guidance for the FYE25 has been boosted by 50bps. Working capital outflows were €40m higher than our forecast; we had expected the company to ship to the US ahead of tariffs, but the amounts were larger than anticipated. 

Tariffs will have a minimal impact in 2025, due in part to early shipments to the US, but also through planned price rises. There is no domestic US footwear industry, so the tariffs will not shift demand to domestic suppliers. If the US economy weakens, there could be some trading down to cheaper duplicate shoes, but we would expect this to be marginal.