BERLIN: German sandal maker Birkenstock raised its expectations for fiscal year 2025 revenue on Thursday, driven by demand for its clogs and shoes from affluent shoppers despite price hikes.

Demand for trendy and aspirational products such as Birkenstock's pricey sandals, popular prams from Bugaboo, as well as Coach's Tabby handbags, has remained undeterred from higher-income consumers in the United States, even as tariffs and sticky inflation weigh on budgets in lower-income households.

Birkenstock has been increasing prices to mitigate the impact of a 15% US tariff on European imports, but demand has been strong for its products, including the suede leather closed-toe Boston clogs, which are priced as high as $275 online.

The company, whose shares were up about 6% in premarket trading, now expects sales of at least 2.09 billion euros ($2.45 billion), implying growth of about 17.5% at constant currency rates over last year.

The New York-listed sandal maker had previously said it expects full-year revenue growth at the higher end of its forecast range of 15%-17%.

At least 520 million euros of sales are set to be recorded in the fourth quarter, which typically ends in September, an 18% growth year-on-year for the three months, Birkenstock said. Full-price demand for its products contributed to a profit beat in the third quarter reported in August.

The company, which manufactures 95% of its shoes in Germany, has also sought to make its factories and logistics more efficient and reduce production costs to manage the fallout from the tariffs.

On Thursday, the company said it had acquired a production facility near Dresden, Germany, for 18 million euros to boost its manufacturing capacity. The site is expected to be operational by the end of fiscal 2027.

Birkenstock maintained its target of 31.3% to 31.8% growth in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the year ending September 30.

($1 = 0.8514 euros)

Articles tagged with "Birkenstock"

Birkenstock lifts sales outlook on demand boost for clogs and shoes