Latest news with #Krolo
Yahoo
15-05-2025
- Business
- Yahoo
Birkenstock's Not Worried About Tariffs — Here's Why
While other brands may be scrambling to figure out how to deal with tariffs, Birkenstock Holding plc has little to worry about on that front. 'Birkenstock is less exposed to tariffs with 100 percent of our production and 96 percent of our materials sourced from Europe, and no contract manufacturing from Asia,' the company's CFO Ivica Krolo told investors Thursday at a company conference call on second-quarter earnings. Looking ahead to the balance of fiscal 2025, he said the company is 'well positioned' to meet or exceed its growth and profitability objectives. More from WWD Dillard's Reports Drop in Net Income, Sales in Q1 Birkenstock Raises 2025 Guidance Due To Strong Demand; Price Increases Expected Boot Barn CEO Is Confident Company Can Navigate Tariffs After 'Solid' Q4 Earnings He told investors the company will 'offset the tariff impact.' It has a goal of maintaining its global price structure, and the tariffs in the U.S. won't change that. Moreover, consistent consumer demand gives the brand pricing flexibility. 'We already have taken appropriate actions to mitigate the impact on tariffs, both near term and long term, with multiple levers to pull and are in a strong position with experience in managing inflationary pressures, including tariffs,' he said. Krolo said consistency in demand, together with its engineered distribution and scarcity model, allows for pricing flexibility. 'For a full offset of tariff impact, we would need only a low-single-digit price increase globally, which is consistent with our historical level of pricing actions,' he said. The CFO was quick to note that pricing isn't the company's only lever. Because the German brand is vertically integrated, other levers include 'efficiencies in production, vendor negotiations, the optimization of product mix and the allocation of products between the different regions,' he said. 'The current context is a stress test for the resilience of business models. As our results for the second quarter show, we have passed this test very well. Our company is in a good shape and we are confident about our future,' Oliver Reichert, Birkenstock's CEO, said on the call. The company on Thursday posted a second-quarter decline in net profits by 16.1 percent to 105.1 million euros, on a net revenue gain of 19.3 percent to 574.3 million euros. With sales in the quarter helped by double-digit unit growth and midsingle-digit growth in ASP (average selling price), the company raised guidance for adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) margin to between 31.3 percent and 31.8 percent. That compares with the prior adjusted EBITDA margin guidance range of 30.8 percent to 31.3 percent. Reichert, Birkenstock's CEO, also noted that the manufacturing capacity the company added over the past two years has allowed it to increase production to meet the increasing demand for the brand's products. The three top markets in the quarter by revenue were Australia, China and Japan. The CEO added that the company is 'just beginning to enter Greater China in a meaningful way and see the opportunity for continued strong growth in this market.' Thus far, the brand's membership base has reached over 10 million people, representing a 25 percent gain year-over-year. And with 77 company-owned stores, it's on track to reach its goal of 100 by the end of 2025. Wall Street liked what they heard from management on the call. Jefferies analyst Randal J. Konik described Birkenstock as a 'best-in-class' brand that continues to execute on its long-term growth strategy. 'Birkenstock has undergone a significant transformation since the appointment of CEO Oliver Reichert, and given its historical brand and loyal customer base, the company looks well-positioned to drive strong top-line growth and attractive margins,' he concluded. He also said that the brand's strong inventory position in the U.S., largely shipped before tariff hikes, minimizes the immediate tariff impact for fiscal 2025. 'We remain enthusiastic about the prospects for Birkenstock given the strength of the brand and sales momentum,' said William Blair analyst Sharon Zackfia. She reiterate the 'Outperform' rating on shares of Birkenstock and said there's opportunity for the brand to generate 'at least 10 billion euros in sales with consistent 30 percent-plus adjusted EBITDA margins.' BMO Capital Markets analyst Simeon Siegel also reiterated his 'Outperform' rating on shares of Birkenstock, citing industry-leading growth, relative tariff insulation and still-meaningful white space ahead (such as growth in close-toe silhouettes). 'We continue to see Birkenstock bringing new iterations of classic styles to market, which helps drive additional purchases and higher ASPs (average selling prices). Additionally, we are impressed by Birkenstock's ability to raise its annual guidance in a period of macro and geopolitical uncertainty, while still maintaining well-controlled distribution,' noted Telsey Advisory Group's chief investment officer Dana Telsey. 'As consumers remain more intentional with their purchases, we see Birkenstock as a brand that can continue to win in the marketplace through its competitive advantage of a high-end lifestyle positioning offering comfort that is not easily replicated.' Best of WWD Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos] Crocs Collaborations From Celebrities & Big Brands You Should Know Sign in to access your portfolio
Yahoo
15-05-2025
- Business
- Yahoo
Birkenstock hikes price of celebrity-loved sandals to help offset tariffs
By Helen Reid and Anuja Bharat Mistry (Reuters) -Birkenstock, the German maker of sandals and clogs favoured by several Hollywood celebrities, plans to raise prices globally and look for production efficiencies to offset the impact of a 10% tariff that President Donald Trump has imposed on imports to the U.S. Birkenstock sandals, worn by Margot Robbie in the Barbie movie and by supermodels like Kendall Jenner, are made in the company's factories in Germany, which is subject to the United States' universal 10% tariff on imports. A higher 20% rate on the European Union still looms, despite a 90-day tariff reprieve granted by Trump last month. "We will be fully offsetting the effects from current existing tariffs," Chief Financial Officer Ivica Krolo told Reuters in an interview. "We're not raising in one region only, we see it as a global exercise." Alongside price hikes, Birkenstock will look at making its factories and logistics more efficient and reduce costs in production, said Krolo, in the role since February 1. The tariff rate after July 9, when the reprieve ends, is "extremely hard to predict", he said, echoing comments from executives around the world trying to navigate the uncertainty. The low-single-digit planned price hikes on Birkenstocks will start to be seen in its fourth quarter from July to September, as some products still need to be shipped to the U.S. from factories in Germany, while most shoes sold now were shipped in before tariffs. After steep U.S. tariffs on China and Southeast Asia caused shipments of clothes, shoes, and homeware from the countries to be cancelled, creating a risk of empty shelves at U.S. stores, Krolo said the fact Birkenstock does not source from Asia was an advantage. "We do see this as an opportunity to take additional shelf space and gain (market) share, and this is also the reason why we are continuing to invest," he said. Krolo called on the EU to agree a deal with the U.S., however, the sooner the better. Birkenstock raised its annual forecasts after sales for its second quarter ended March 31 grew more than expected as more people bought its sandals and more expensive clogs. The company's shares were up about 6% by 1200 EST (1700 GMT). Birkenstock said second-quarter capital expenditure of about 21 million euros ($23.5 million) aimed to expand production capacity to meet growing demand in regions such as the Americas. STRONG US DEMAND Revenue in the Americas, its biggest market, was up 23% in the quarter, and Krolo said demand from U.S. retailers and consumers for Birkenstocks remained strong. "In a world where most brands are hoping to be able to raise prices to offset any tariff pressure, Birkenstock has a proven track record of already having permission to do so," said Simeon Siegel, analyst at BMO Capital Markets, referring to consumers' willingness to pay more if needed. Birkenstock's Arizona sandal in suede leather starts at $135 now on the U.S. website, up from $130 a year ago. Birkenstock now expects 2025 revenue growth to hit the high end of its forecast range of 15% to 17%, and an annual earnings before interest, taxes, depreciation and amortization (EBITDA) margin between 31.3% and 31.8%, up from 30.8%-31.3%. Second-quarter revenue of 574.3 million euros, up 19% from a year ago, was stronger than analysts' consensus estimate of 567.7 million according to LSEG. Revenue was helped by double-digit growth in units sold and a mid-single-digit increase in average selling price as Birkenstock sold more clogs. Birkenstock is not considering manufacturing in the U.S., Krolo said, despite the tariff on imports which Washington has said would help bring manufacturing back to the country. ($1=0.8926 euros) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
RTÉ News
15-05-2025
- Business
- RTÉ News
Birkenstock plans price hikes to offset tariffs, sees 'opportunity' in US
German sandal maker Birkenstock plans to raise prices globally to fully offset the impact of the US tariff of 10% on European Union-made goods, chief financial officer Ivica Krolo said today, as the company's sales beat expectations. Birkenstock makes its products at factories in Germany, which is subject to the US's universal 10% tariff on imports. But a higher 20% rate on the European Union still looms, despite a 90-day tariff reprieve granted by President Donald Trump last month. "We will be fully offsetting the effects from current existing tariffs," Krolo told Reuters in an interview. "We're not raising in one region only, we see it as a global exercise." The tariff rate after July 9, when the reprieve ends, is "extremely hard to predict", said Krolo, in the role since February 1, echoing comments from executives around the world trying to navigate the uncertainty. After steep US tariffs on China and Southeast Asia caused shipments of clothes, shoes, and homeware from the country to be cancelled, creating a risk of empty shelves at US stores, Krolo said the fact Birkenstock does not source from Asia was an advantage. "We do see this as an opportunity to take additional shelf space and gain share, and this is also the reason why we are continuing to invest," he said. Krolo called on the European Union to agree a deal with the United States, however, the sooner the better. Birkenstock raised its annual forecasts after sales for its second quarter ended March 31 grew more than expected as more people bought its sandals and more expensive clogs. The company's shares gained about 7% in early trading. Birkenstock said second-quarter capital expenditure of about €21m aimed to expand production capacity to meet growing demand in regions such as the Americas. Revenue in the Americas, its biggest market, was up 23% in the quarter, and Krolo said demand from US retailers and consumers for Birkenstocks remains strong. "In a world where most brands are hoping to be able to raise prices to offset any tariff pressure, Birkenstock has a proven track record of already having permission to do so," said Simeon Siegel, analyst at BMO Capital Markets, referring to consumers' willingness to pay more if needed. Birkenstock now expects 2025 revenue growth to hit the high end of its forecast range of 15% to 17%, and an annual earnings before interest, taxes, depreciation and amortisation (EBITDA) margin between 31.3%-31.8%, up from 30.8%-31.3%. Second-quarter revenue of €574.3m, up 19% from a year ago, was stronger than analysts' estimates of €567.7m according to LSEG. Revenue was helped by double-digit growth in units sold and a mid-single-digit increase in average selling price as Birkenstock sold more clogs. The low-single-digit planned price hikes on Birkenstocks will start to be seen in its fourth quarter from July to September, as some products still need to be shipped into the US from factories in Germany, while most shoes sold now were shipped in before tariffs. Birkenstock is not considering manufacturing in the US, finance chief Krolo said, despite the tariff on imports which Washington has said would help bring manufacturing back to the country.
CNBC
15-05-2025
- Business
- CNBC
Birkenstock hikes price of sandals to offset tariffs
Birkenstock, the German maker of sandals and clogs, plans to raise prices globally to fully offset the impact of a 10% tariff that President Donald Trump has imposed on imports to the U.S. Birkenstock sandals are made in the company's own factories in Germany, which is subject to the United States' universal 10% tariff on imports. A higher 20% rate on the European Union still looms, despite a 90-day tariff reprieve granted by Trump last month. "We will be fully offsetting the effects from current existing tariffs," Chief Financial Officer Ivica Krolo told Reuters in an interview. "We're not raising in one region only, we see it as a global exercise." The tariff rate after July 9, when the reprieve ends, is "extremely hard to predict", said Krolo, in the role since February 1, echoing comments from executives around the world trying to navigate the uncertainty. After steep U.S. tariffs on China and Southeast Asia caused shipments of clothes, shoes, and homeware from the countries to be cancelled, creating a risk of empty shelves at U.S. stores, Krolo said the fact Birkenstock does not source from Asia was an advantage. "We do see this as an opportunity to take additional shelf space and gain (market) share, and this is also the reason why we are continuing to invest," he said. Krolo called on the European Union to agree a deal with the U.S., however, the sooner the better. Birkenstock raised its annual forecasts after sales for its second quarter ended March 31 grew more than expected as more people bought its sandals and more expensive clogs. The company's shares gained about 7% in early trading. Birkenstock said second-quarter capital expenditure of about 21 million euros ($23.5 million) aimed to expand production capacity to meet growing demand in regions such as the Americas. Revenue in the Americas, its biggest market, was up 23% in the quarter, and Krolo said demand from U.S. retailers and consumers for Birkenstocks remains strong. "In a world where most brands are hoping to be able to raise prices to offset any tariff pressure, Birkenstock has a proven track record of already having permission to do so," said Simeon Siegel, analyst at BMO Capital Markets, referring to consumers' willingness to pay more if needed. Birkenstock's Arizona sandal in suede leather starts at $135 now on the U.S. website, up from $130 a year ago. Birkenstock now expects 2025 revenue growth to hit the high end of its forecast range of 15% to 17%, and an annual earnings before interest, taxes, depreciation and amortization (EBITDA) margin between 31.3% and 31.8%, up from 30.8%-31.3%. Second-quarter revenue of 574.3 million euros, up 19% from a year ago, was stronger than analysts' consensus estimate of 567.7 million according to LSEG. Revenue was helped by double-digit growth in units sold and a mid-single-digit increase in average selling price as Birkenstock sold more clogs. The low-single-digit planned price hikes on Birkenstocks will start to be seen in its fourth quarter from July to September, as some products still need to be shipped into the U.S. from factories in Germany, while most shoes sold now were shipped in before tariffs. Birkenstock is not considering manufacturing in the U.S., Krolo said, despite the tariff on imports which Washington has said would help bring manufacturing back to the country.
Business of Fashion
15-05-2025
- Business
- Business of Fashion
Birkenstock Plans Price Hikes to Offset Tariffs, Sees Strong Demand
German sandal maker Birkenstock plans to raise prices globally to fully offset the impact of the US tariff of 10 percent on European Union-made goods, chief financial officer Ivica Krolo said on Thursday, as the company's sales beat expectations. Birkenstock makes its products at factories in Germany, which is subject to the United States' universal 10 percent tariff on imports. But a higher 20 percent rate is still looming, despite a 90-day reprieve by President Donald Trump last month. 'We will be fully offsetting the effects from current existing tariffs,' Krolo told Reuters in an interview. 'We're not raising in one region only, we see it as a global exercise.' The tariff rate after July 9, when the reprieve ends, is 'extremely hard to predict', said Krolo, echoing comments from executives around the world trying to navigate the uncertainty. Higher prices on Birkenstocks will start to be seen in its fourth quarter from July to September, as some products still need to be shipped in to the United States from factories in Germany, said investor relations director Megan Kulick. Birkenstock raised its annual forecasts after second-quarter sales grew more than expected and the brand, known for its sandals, said more people were buying its pricier clogs. Shares of the company were up about 5 percent in premarket trading. Birkenstock said second-quarter capital expenditure of about 21 million euros ($23.53 million) aimed to expand production capacity to cater to growing demand in regions such as the Americas. Net revenue in the Americas, its biggest market, was up 23 percent in the quarter ended March 31, compared with 19 percent a year earlier. Birkenstock now expects fiscal 2025 revenue at the high end of its previous forecast range of 15 percent to 17 percent in constant currency terms. It also said its annual earnings before interest, taxes, depreciation and amortisation (EBITDA) margin would be between 31.3 percent and 31.8 percent, up from the 30.8 percent to 31.3 percent previously forecast. Second-quarter revenue of 574.3 million euros was stronger than analysts' estimates of 567.7 million according to LSEG. By Anuja Bharat Mistry: Editors; Krishna Chandra Eluri, Clarence Fernandez Learn more: Retailers Rush to Save US Summer Shopping Season Following a temporary US tariff cut on Chinese imports, US retailers are accelerating efforts to import summer merchandise from China, reversing a previous slowdown in orders.
