After the results, it plummeted! The impact of tariffs increased, and BIRK.US (BIRK.US)'s revenue and profit guidelines for the new fiscal year fell short of expectations

The Zhitong Finance App learned that Birken (BIRK.US) reports that sales and profits have increased due to strong demand for its expensive sandals and clogs, but at the same time predicts that the growth rate will slow down over the next year. The company said that in the three months up to September, at a fixed exchange rate, revenue increased 20% to 526 million euros (US$616 million), slightly higher than analysts' average expectations. However, Birken expects sales to increase by up to 15% in the 2026 fiscal year, which means that annual revenue can reach a maximum of 2.35 billion euros, which is slightly lower than expected.

Birken CEO Oliver Reichert is trying to attract investors with his steady growth strategy to ensure that consumer demand for Birken shoes continues to exceed its production capacity, which enables the company to raise the average selling price of shoes and avoid price reduction promotions. Reichert had previously given conservative financial forecasts at the beginning of the year and then raised them.

Despite being affected by US tariffs and exchange rate fluctuations, the company's results for the fiscal year ending September exceeded expectations. However, the company said it expects these factors to continue to have an impact in 2026. The data shows that adjusted earnings may exceed 700 million euros in 2026, while analysts' average expectations are around 758 million euros.

According to an agreement reached between the Trump administration and 27 EU member states in July, a 15% import tariff was imposed on most goods from the EU. The full imposition of import tariffs by the United States has put pressure on business operations and made consumers struggling with rising prices of food, furniture, and various other imported goods uneasy.

Most of Birken's production is carried out in Germany, and in order to cope with the impact of tariffs, the company has taken a number of measures, including targeted price increases, negotiations with suppliers, improving production efficiency and optimizing products.

Since this year, Birken's stock price has dropped by about 18% as investors generally avoid footwear companies. Adidas and Puma's shares have declined even more. What makes Birken different from most other shoe companies, however, is that it has its own factory. Reichert said in a statement that its growth was limited only by the plant's production capacity and the desire to keep the products relatively scarce.

The company said it plans to invest €110 million to €130 million in capital expenses in 2026, up from €85 million last year to expand production capacity. The company also said it plans to repurchase $200 million of shares in fiscal year 2026, depending on market conditions.

Birken said its gross margin is expected to fall to between 57% and 57.5% in 2026, which is lower than the average forecast of 59.8%. The company pointed out that the adverse effects of exchange rate fluctuations and rising tariffs could cause gross margins to drop by 100 basis points.

After the results were announced, Birken's stock price fell 11.64% to $41 before the market on Thursday as of press release.