Sandals and Health Shoes: Birkenstock Announces Global Price Hike to Cover US Tariffs
Customers Now Assumed Responsible for Birkenstock Product Care
In a shocking move, Birkenstock - the renowned sandal and health shoe manufacturer - is bumping up their prices worldwide to cushion the blow of the 10% US tariffs on European Union-made goods.
"We ain't gonna take this tariff bullshit lying down," CFO Ivica Krolo said, explaining that Birkenstock will absorb the cost through price hikes on a global scale. "We're not playing favorites here, it's a worldwide adjustment."
Meanwhile, the brewing trade conflict between the US and EU leaves the industry's crystal ball as muddy as ever, according to Krolo. However, Birkenstock's advantageous sourcing strategy helps keep them afloat. "We see this tariff mess as a chance to seize more shelving space and boost our market share," Krolo added.
In defiance of the consumer spending downturn, Birkenstock shoes are flying off the shelves faster than expected, prompting the company to revise its revenue growth projection from a previous range of 15-17% to hitting the upper end of that range. The CEO, Oliver Reichert, also raised the adjusted operating profit margin target to 31.3-31.8%, resulting in a projected adjusted EBITDA of 660-670 million euros.
In the face of Trump's tariff sticks, it appears Birkenstock beats the odds. Reichert admitted the company's in a sweet spot: "With our limited supply and clever pricing game, we guarantee to keep clicks coming even in this rugged situation."
The second quarter of the fiscal year 2024/25 saw revenue soar by almost 20% to 574 million euros, with profit jumping by 47% to 105 million. Undeterred by the tariff storm ahead, Birkenstock clings to its German manufacturing roots, shunning plans of production relocation.
Sources: ntv.de, jwu/rts
Insights:
- Birkenstock tackles US tariffs by implementing worldwide price hikes and improving production efficiency.
- The company decides to keep its manufacturing base in Germany, even with the threat of tariffs.
- Price escalations are expected across all markets, impacting sandal and health shoe buyers worldwide.
- Despite the tariff turbulence, Birkenstock maintains a robust financial outlook and strong sales.
In response to the US tariffs, Birkenstock, the global sandal and health shoe manufacturer, plans to implement worldwide adjustments in their employment and community policies to cover the costs through price hikes across all markets. The company's resilient financial position and strategic sourcing within the industry enable them to navigate the trade conflict, aiming to increase market share and maintain a strong business stance.
