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

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