Q3 2025 Birkenstock Holding PLC Earnings Call

Innovation, we will conduct a question and answer session.

The company is allocated 60 minutes in total to this conference call.

I would like to remind everyone that this conference call is being recorded.

I will now turn over the call to Meghan Kulik director of Investor Relations.

Okay.

Hello, and thank you everyone for joining us today on the call are Oliver Reichert director of broken stock holding plc, and Chief Executive Officer of the Birkenstock group and to visa Colo Chief Financial Officer of the Birkenstock Group, David Kahn, President Americas, Nico buoy, our president of EMEA clouds Baumann chief.

Sales officer, and Alexander Huff, Vice President Global Finance will join us for the Q&A.

Operator: Good morning. Thank you for standing by. Welcome to Birkenstock's third quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question and answer session. The company has allocated 60 minutes in total to this conference call. I would like to remind everyone that this conference call is being recorded. I will now turn over the call to Megan Kulick, Director of Investor Relations.

Today, we are reporting the financial results for our fiscal third quarter of 2025 ended June 30th 2025, you may find the press release and supplemental presentation connected to today's discussion on our Investor Relations website at Birkenstock Dash holding dot com.

Speaker #2: Following the presentation, we will conduct a question and answer session. The company, as allocated 60 minutes in total to this conference call, I would like to remind everyone that this conference call is being recorded.

Speaker #2: I will now turn over the call to Megan Kulick, Director of Investor Relations.

We would like to remind you that some of the information provided during this call is forward looking and accordingly is subject to the safe Harbor provisions of federal security laws.

Speaker #3: Hello, and thank you everyone for joining us today. On the call are Oliver Reichert, Director of Birkenstock Holding plc, and Chief Executive Officer of the Birkenstock Group, and Ivica Krolo, Chief Financial Officer of the Birkenstock Group.

Megan Kulick: Hello, and thank you, everyone, for joining us today. On the call are Oliver Reichert, Director of Birkenstock Holding plc and Chief Executive Officer of the Birkenstock Group, and Ivica Krolo, Chief Financial Officer of the Birkenstock Group, David Kahn, President of Americas, Nico Bouillaf, President of EMEA, Klaus Bauman, Chief Sales Officer, and Alexander Hoff, Vice President Global Finance, who will join us for the Q&A. Today, we are reporting the financial results for our fiscal third quarter of 2025 ended June 30, 2025. You may find the press release and supplemental presentation connected to today's discussion on our investor relations website at birkenstock-holding.com. We would like to remind you that some of the information provided during this call is forward-looking and accordingly is subject to the safe harbor provisions of federal security laws.

These statements are subject to various risks uncertainties and assumptions, which could cause our actual results to differ materially from these statements.

Speaker #3: David Khan, President, Americas; Nico Buliaff, President of Ivia; Klaus Baumann, Chief Sales Officer; and Alexander Hoff, Vice President, Global Finance, will join us for the Q&A.

These risks uncertainties and assumptions are detailed in this morning's press release as well as in our filings with the SEC and can be found on our website at Berkinstocks Dutch holding dot com.

Speaker #3: Today, we are reporting the financial results for our fiscal third quarter of 2025, ended June 30, 2025. You may find the press release and supplemental presentation connected to today's discussion on our Investor Relations website at birkenstock-holding.com.

We undertake no obligation to revise or update any forward looking statements or information, except as required by law, we will reference certain non <unk> financial information, we use non ifr S measures as we believe they represent the operational performance and underlying results of our business more accurately.

Speaker #3: We would like to remind you that some of the information provided during this call is forward-looking and, accordingly, is subject to the safe harbor provisions of federal security laws.

The presentation of this non I FRS financial information is not intended to be considered by itself or as a substitute for the financial information prepared and presented in accordance with Ifr S. Reconciliation of <unk> to non <unk> measures can be found in this morning's press release and in our SEC filings.

Speaker #3: These statements are subject to various risks, uncertainties, and assumptions, which could cause our actual results to differ materially from these statements. These risks, uncertainties, and assumptions are detailed in this morning's press release, as well as in our filings with the SEC and can be found on our website at birkenstock-holding.com.

Megan Kulick: These statements are subject to various risks, uncertainties, and assumptions which could cause our actual results to differ materially from these statements. These risks, uncertainties, and assumptions are detailed in this morning's press release, as well as in our filings with the SEC, and can be found on our website at birkenstock-holding.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. We will reference certain non-IFRS financial information. We use non-IFRS measures as we believe they represent the operational performance and underlying results of our business more accurately. The presentation of this non-IFRS financial information is not intended to be considered by itself or as a substitute for the financial information prepared and presented in accordance with IFRS. Reconciliations of IFRS to non-IFRS measures can be found in this morning's press release and in our SEC filings.

Now I'll turn the call over to Oliver.

Good morning, everybody and thank you for joining us today for our third quarter results.

Speaker #3: We undertake no obligation to revise or update any forward-looking statements or information, except as required by law. We will reference certain non-IFRS financial information.

Once again, we delivered against our guidance with 16% revenue growth in constant currency <unk>.

We continued to grow double digit in every segment in China at the same time, we have significantly improved profitability.

Speaker #3: We use non-IFRS measures as we believe they represent the operational performance and underlying results of our business more accurately. The presentation of this non-IFRS financial information is not intended to be considered by itself or as a substitute for the financial information prepared and presented in accordance with IFRS.

Margin was up 100 basis points to 65% and EBITA margin was up 140 basis points to 34, 4%, our best third quarter margin ethanol.

And we did this in a global environment with pressure from tariffs and currency volatility.

Speaker #3: Reconciliations of IFRS to non-IFRS measures can be found in this morning's press release and in our SEC filings. Now, I'll turn the call over to Oliver.

We continue to see the shift to in person shopping, which amplifies our brand.

Megan Kulick: Now, I'll turn the call over to Oliver.

Speaker #4: Good morning, everybody, and thank you for joining us today for our third quarter results. Once again, we delivered against our guidance with a 16% revenue growth in constant currency.

Touching fueled product, especially for consumers who are new to the brand.

Nico Bouillaf: Good morning, everybody, and thank you for joining us today for our third quarter results. Once again, we delivered against our guidance with 16% revenue growth in constant currency. We continue to grow double-digit in every segment and channel. At the same time, we significantly improved profitability. Gross margin was up 100 basis points to 60.5%, and EBITDA margin was up 140 basis points to 34.4%, our best third-quarter margin ever. We did this in a global environment with pressure from tariffs and currency volatility. We continue to see the shift to in-person shopping, which amplifies our brand. We are a touch-and-feel product, especially for consumers who are new to the brand. We have over 12,000 high-quality touchpoints through our B2B partners compared to our own fleet of 90 doors. That is why this shift in consumer behavior favors our B2B channel over DTC.

We have over 12000 high quality touch points through our B to B partners compared to our own fleet of 90 doors.

Speaker #4: We continue to grow double-digit in every segment and channel. At the same time, we significantly improved profitability. Gross margin was up 100 basis points, to 60.5%.

That is why this shift in consumer behavior favors our b to B channel over DTC.

We are winning at retail gaining shelf space and taking share.

Speaker #4: And EBITDA margin was up 140 basis points to 34.4%. Our best third-quarter margin ever. And we did this in a global environment with pressure from tariffs and currency volatility.

In a flat U S market retail revenue at our top 10 wholesale partners was up 25%.

As you do your channel checks for back to school, you will hear that Britain stock is to win them.

Very strong sell out and to me.

Tori terms.

Same for EMEA.

Speaker #4: We continue to see the shift to in-person shopping, which amplifies our brand. We are a touch-and-feel product, especially for consumers who are new to the brand.

Retail revenue at our top 10 partners was up 20%.

Within our <unk> channel over 90% of the growth came from within existing doors.

Speaker #4: We have over 12,000 high-quality touchpoints through our B2B partners, compared to our own fleet of 90 doors. That is why this shift in consumer behavior favors our B2B channel over DTC.

We are committed to maintaining relative scarcity in managing tightly our distribution growth.

And on retail we accelerated the pace of openings, adding 13, new doors.

Speaker #4: We are winning at retail, gaining shelf space and taking share. In a flat US market, retail revenue at our top 10 hosted partners was up 25%.

Our new stores generally deliver a higher ASP and higher units per transaction from day, one and.

Nico Bouillaf: We are winning at retail, gaining shelf space and taking share. In a flat US market, retail revenue at our top 10 wholesale partners was up 25%. As you do your channel checks for Back to School, you will hear that Birkenstock is the winner with very strong sellouts and fast inventory turns. Same for EMEA. Retail revenue at our top 10 partners was up 20%. Within our B2B channel, over 90% of the growth came from within existing doors. We are committed to maintaining relative scarcity and managing tightly our distribution growth. In own retail, we accelerated the pace of openings, adding 13 new doors. Our new stores generally deliver a higher ASP and higher units per transaction from day one, and we see a return of CapEx within 12 to 18 months.

And we see a return of Capex within 12 to 18 months.

Speaker #4: As you do your channel checks for back-to-school, you will hear that Birkenstock is the winner. With very strong sellout and fast inventory turns. Same for Ivia.

We are on track to reach our goal of around 100 stores by the end of this fiscal year.

This will allow us to capture more and personal shopping demand within our own DTC business and allows us to showcase the full breadth of our product assortment.

Speaker #4: Retail revenue at our top 10 partners was up 20%. channel, over 90% of the growth came from within existing doors. We are committed to maintaining relative scarcity and managing tightly our distribution growth.

Our brand heat is stronger than ever.

No matter, if you look at sell through full price realization or our strong order book.

This is especially true in the emerging use models.

Speaker #4: In own retail, we accelerated the pace of openings adding 13 new doors. Our new stores generally deliver a higher ASP Within our B2B and higher units per transaction from day one.

Our demand is strong across all product categories and target groups.

Sales of our classic level fluids grew double digits demos.

Demand for our iconic styles, such as the Arizona and Boston remains strong and is accelerating within the younger demographic.

Speaker #4: And we see a return of CAPEX within 12 to 18 months. We are on track to reach our goal of around 100 stores by the end of this fiscal year.

Nico Bouillaf: We are on track to reach our goal of around 100 stores by the end of this fiscal year. This will allow us to capture more in-person shopping demand within our own DTC business and allow us to showcase the full breadth of our product assortment. Our brand heat is stronger than ever, no matter if you look at sell-through, full price realization, or our strong order book. This is especially true in the emerging youth market. Our demand is strong across all product categories and target groups. Sales of our classic leather silhouettes grew double digits. Demand for our iconic styles, such as the Arizona and Boston, remains strong and is accelerating within the younger demographic. At the same time, we are growing in expansionary categories such as lace-up shoes. Closed-toe share of revenue increased by 400 basis points year over year. Now, let's briefly review our segment performance.

At the same time, we are growing in expense new categories, such as lease options.

Speaker #4: This will allow us to capture more in-person shopping demand within our own DTC business and showcase the full breadth of our product assortment.

Close total share of revenue increased by 400 basis points year over year.

Now, let's briefly review our segment performance in the Americas revenue was up 16% in constant currency with both the b to B and DTC channels growing double digits.

Speaker #4: Our brand heat is stronger than ever. No matter if you look at sell-through, full-price realization, or our strong order book. This is especially true in the emerging youth market.

Our b to B business was especially strong.

Importantly, we saw no pushback or cancellations following the July one price increases implemented in response to tariffs.

Speaker #4: Our demand is strong across all product categories and target groups. Sales of our classic leather silhouettes grew double digits. Demand for our iconic styles such as the Arizona and Boston remains strong and is accelerating within the younger demographic.

We opened three additional stores, bringing the total number of stores to 13.

In EMEA, we delivered double digit growth of 13%, while both channels grew double digits Peter.

Speaker #4: At the same time, we are growing in expansionary categories such as lace-up shoes. The closed-toe share of revenue increased by 400 basis points year-over-year.

<unk> outpaced DTC driven by strong sell through at our retail partners.

Our online business started off slower than planned in April and May However in June online growth re accelerated.

Speaker #4: Now, let's briefly review our segment performance. In the Americas, revenue was up 16% in constant currency, with both the B2B and DTC channels growing double-digit.

Nico Bouillaf: In the Americas, revenue was up 16% in constant currency, with both the B2B and DTC channels growing double digits. Our B2B business was especially strong. Importantly, we saw no pushback or cancellations following the July 1st price increases implemented in response to tariffs. We opened three additional stores, bringing the total number of stores to 13. In EMEA, we delivered double-digit growth of 13%, while both channels grew double digits. B2B outpaced DTC, driven by a strong sell-through at our retail partners. Our online business started off slower than planned in April and May. However, in June, online growth reaccelerated. We saw healthy growth in our own retail, with same-store sales up in the mid-teens. We further expanded our brand presence with the opening of new stores in the Netherlands and Spain, bringing our store count to 39. The APAC region was up 24% in constant currency.

Saw healthy growth in our own retail same store sales up in the mid teens.

We further expanded our brand presence with the opening of new stores in the Netherlands, and Spain, bringing our store count to 39.

Speaker #4: Our B2B business was especially strong. Importantly, we saw no pushback or cancellations following the July 1 price increases implemented in response to tariffs. We opened three additional stores, bringing the total number of stores to 13.

The APAC region was up 24% in constant currency.

Timing of goods in transit shifted revenue from third quarter into the fourth quarter, we forecast an acceleration in the fourth quarter in line with our expectation that APAC will grow twice as fast as our other two segments for the full year.

Speaker #4: In Ivia, we delivered double-digit growth of 13%, while both channels grew double-digit. B2B outpaced DTC, driven by strong sell-through at our retail partners. Our online business started off slower than planned in April and May.

We opened eight new owned retail stores, bringing the total number of stores into reaching 238.

Speaker #4: However, in June, online growth re-accelerated. We saw healthy growth in our own retail, with same store sales up in the mid-teens. We further expanded our brand presence with the opening of new stores in the Netherlands and Spain, bringing our store count to 39.

We also expanded our strategic partnerships, increasing our mono brand partner doors by around 20% compared to last year.

Our business in China was particularly strong and accounted for 20% of APAC revenue in the quarter.

I will now turn it over to EBITA to discuss our financial results in more detail.

Speaker #4: The APEC region was up 24% in constant currency. Timing of goods and transit shifted revenue from the third quarter into the fourth quarter. We forecast an acceleration in the fourth quarter in line with our expectation that APEC will grow twice as fast as our other two segments for the full year.

Thanks Oliver.

Nico Bouillaf: Timing of goods in transit shifted revenue from Q3 into Q4. We forecast an acceleration in Q4 in line with our expectation that APAC will grow twice as fast as our other two segments for the full year. We opened eight new owned retail stores, bringing the total number of stores in the region to 38. We also expanded our strategic partnerships, increasing our monobrand partner doors by around 20% compared to last year. Our business in China was particularly strong and accounted for 20% of APAC revenue in the quarter. I will now turn it over to Ivica to discuss our financial results in more detail.

I am happy to share with you a Britain stocks performance for the third quarter of 2025.

This is the first quarter since we've been a public company, where we saw significant headwind from FX on our reported numbers.

Dollar depreciated by about 5% against the euro in the quarter compared to last year.

Speaker #4: We opened eight new retail stores, bringing the total number of stores in the region to 38. We also expanded our strategic partnerships, increasing our mono-brand partner doors by around 20% compared to last year.

This impacted both our reported revenue growth and margins.

FX caused a 330 basis points drag on revenue growth lowered gross margins by 60 basis points and adjusted EBITDA margin by 70 basis points.

Speaker #4: Our business in China was particularly strong in accounted for 20% of APEC revenue in the quarter. I will now turn it over to Ivica to discuss our financial results in more detail.

Third quarter revenues were 635 million growth of 16% in constant currency within the range of 15% to 17 annual guidance for the year.

Speaker #5: Thanks, Oliver. I am happy to share with you Birkenstock's performance for the third quarter of 2025. This is the first quarter since we have been a public company where we saw significant headwind from FX on our reported numbers.

Ivica Krolo: Thanks, Oliver. I am happy to share with you Birkenstock's performance for the third quarter of 2025. This is the first quarter since we have been a public company where we saw significant headwind from FX on our reported numbers. The dollar depreciated by about 5% against the euro in the quarter compared to last year. This impacted both our reported revenue growth and margins. FX caused a 330 basis points drag on revenue growth, lowered gross margin by 60 basis points, and adjusted EBITDA margin by 70 basis points. Third quarter revenues were €635 million, growth of 16% in constant currency within the range of our 15% to 17% annual guidance for the year. Reported revenue growth was 12%. B2B growth outpaced DTC in the quarter. B2B was up 18% in constant currency. DTC grew 12% in constant currency.

Reported revenue growth was 12%.

<unk> growth outpaced DTC in the quarter.

<unk> was up 18% in constant currency.

Did you see grew 12% in constant currency.

Speaker #5: The dollar depreciated by about 5% against the euro in the quarter compared to last year. This impacted both our reported revenue growth and margins.

Did you see share of business with 38% down 110 basis points versus prior year.

We see sustained strength in our <unk> channel from the shift to more in personal shopping.

Speaker #5: FX caused a $330 basis points drag on revenue growth, lowered gross margin by 60 basis points, and adjusted EBITDA margin by 70 basis points.

<unk> has proven to be the most cost efficient way to target new consumer groups and usage occasions.

Speaker #5: Third quarter revenues were $635 million, growth of 16% in constant currency, within the range of our 15 to 17 annual guidance for the year.

Both important white spaces for all brands.

We now expect <unk> growth to outpace <unk> in both.

Fourth quarter and for the full year.

We are a demand driven brands.

Speaker #5: Reported revenue growth was 12%. B2B growth outpaced DTC in the quarter. B2B was up 18% in constant currency, while DTC grew 12% in constant currency.

Strategically allocate oil products to where the consumer is shopping.

Unlike our peers, we own our supply chain. The <unk> order book provides predictability to de risks our planning.

Speaker #5: DTC share of business was 38%, down 110 basis points versus prior year. We see sustained strength in our B2B channel from the shift to more in-person shopping.

Ivica Krolo: DTC's share of business was 38%, down 110 basis points versus prior year. We see sustained strength in our B2B channel from the shift to more in-person shopping. B2B has proven to be the most cost-efficient way to target new consumer groups and user occasions, both important white spaces for our brand. We now expect B2B growth to outpace DTC in both the fourth quarter and for the full year. We are a demand-driven brand. We strategically allocate our products to where the consumer is shopping, and unlike our peers, we own our supply chain. The B2B order book provides predictability and de-risks our planning. Gross profit margin for the quarter was 60.5%, up 100 basis points year over year. Pricing, net of inflation, and better absorption of costs related to the Parzival facility contributed to margin expansion.

Gross profit margin for the quarter was 65% up 100 basis points year over year.

Pricing net of inflation and better absorption of costs related to the possible facility contributed to margin expansion.

Speaker #5: B2B has proven to be the most cost-efficient way to target new consumer groups and usage occasions. Both important white spaces for our brand. We now expect B2B growth to outpace DTC in both.

This was partially offset by channel mix and the unfavorable currency impact of 60 basis points.

Selling and distribution expenditures were $163 million in the third quarter, representing 25, 6% of revenue.

Speaker #5: The fourth quarter and for the full year. We are a demand-driven brand. We strategically allocate our products to where the consumer is shopping. And unlike our peers, we own our supply chain.

It was down 80 basis points from the prior year, mainly due to a higher b to b share.

Adjusted General and administration expenses were $31 million or four 9% of revenue in the quarter up 40 basis points year over year due to higher <unk> expenses, primarily related to the <unk>.

Speaker #5: The B2B order book provides predictability and deal risks for our planning. Gross profit margin for the quarter was 60.5%, up 100 basis points year-over-year. Pricing, net of inflation, and better absorption of costs related to the part of our facility contributed to margin expansion.

ERP conversion in the Americas.

Adjusted EBITDA in the third quarter of 218 million Euro was up 17% year over year.

Adjusted EBITDA margin of 34, 4% was up 140 basis points year over year.

Speaker #5: This was partially offset by channel mix and the unfavorable currency impact of 60 basis points. Selling and distribution expenditures were 163 million in the third quarter.

Ivica Krolo: This was partially offset by channel mix and the unfavorable currency impact of 60 basis points. Selling and distribution expenditures were €163 million in the third quarter, representing 25.6% of revenue. This was down 80 basis points from the prior year, mainly due to a higher B2B share. Adjusted general and administration expenses were €31 million, or 4.9% of revenue in the quarter, up 40 basis points year over year due to higher IT expenses, primarily related to the ERP conversion in the Americas. Adjusted EBITDA in the third quarter of €218 million was up 17% year over year. Adjusted EBITDA margin of 34.4% was up 140 basis points year over year. This was even despite the 70 basis point impact from unfavorable currency translation. Adjusted net profit of €116 million in the third quarter was up 26% year over year.

This was even despite the 70 basis point impact from unfavorable currency translation.

Adjusted net profit of 116 million Euro in the third quarter was up 26% year over year.

Speaker #5: Representing 25.6% of revenue, this was down 80 basis points from the prior year, mainly due to a higher B2B share. Adjusted general and administration expenses were $31 million, or 4.9% of revenue, in the quarter, up 40 basis points year-over-year due to higher IT expenses, primarily related to the ERP conversion in the Americas.

Adjusted EPS was 62% up from 49% from a year ago, a 27% increase.

Cash flows from operating activities during the quarter were $261 million down 21 million euro compared to the last year due to the timing of tax payments and lower working capital release.

Speaker #5: Adjusted EBITDA in the third quarter of €218 million was up 17% year-over-year. Adjusted EBITDA margin of 34.4% was up 140 basis points year-over-year.

We ended the quarter with cash and cash equivalents of 262 million Euro after the repurchase of three 9 million shares totaling $176 million.

As we continuously improve our inventory efficiency or inventory to sales ratio declined to 33% from 36% in Q3 24.

Speaker #5: This was even despite the 70 basis point impact from unfavorable currency translation. Adjusted net profit of 116 million euro in the third quarter was up 26% year-over-year.

Our DSO for the quarter were <unk> 43 in line with a 42, a year ago, even with the strong growth <unk> business.

Speaker #5: Adjusted EPS was 62 cents, up from 49 cents from a year ago, a 27% increase. Cash flows from operating activities during the quarter were 261 million, down 21 million, euro compared to the last year due to the timing of tax payments and lower working capital release.

Ivica Krolo: Adjusted EPS was $0.62, up from $0.49 from a year ago, a 27% increase. Cash flows from operating activities during the quarter were €261 million, down €21 million compared to last year due to the timing of tax payments and lower working capital release. We ended the quarter with cash and cash equivalents of €262 million after the repurchase of 3.9 million shares, totaling €176 million. As we continuously improve our inventory efficiency, our inventory-to-sales ratio declined to 33% from 36% in Q3 2024. Our DSO for the quarter were 43, in line with the 42 a year ago, even with a strong growth in our B2B business. During the quarter, we spent approximately €22 million in CapEx, adding to our production capacity in Parzival, Görlitz, and Arouca, and continuing our investments in retail and IT.

During the quarter, we spent approximately 22 million euro in Capex heading to our production capacity in <unk>, <unk> and <unk> and continuing our investments in retail.

We are on track to meet our capex target of around $80 million for the year.

Speaker #5: We ended the quarter with cash and cash equivalents of 262 million euro, after the repurchase of 3.9 million shares totaling 176 million. As we continuously improve our inventory efficiency, our inventory-to-sales ratio declined to 33% from 36 in Q3 24.

Even with the share buyback we executed in May our net leverage was one seven times as of June 32, 25 down from one eight at the end of Q2.

Without the buyback the net leverage would have been at one four times.

Our capital allocation priorities continue to be number one invest in our business number two reduce debt number three opportunistic share buybacks.

Speaker #5: Our DSO for the quarter was 43, in line with the 42 a year ago, even with a strong growth in our B2B business. During the quarter, we spent approximately €22 million in CAPEX, adding to our production capacity in Pasewalk, Görlitz, and Aruka, and continuing our investments in retail and IT.

Even with the buyback we continue to expect net leverage of approximately one five times at the end of fiscal 'twenty five.

We believe we are well positioned to meet our stated growth and profitability objectives.

We believe we can manage the impact of the baseline 15% EU tariff through the actions, we have already taken including targeted price increases.

Speaker #5: We are on track to meet our CAPEX target of around 80 million for the year. Even with a share buyback, we executed in May, our net leverage was 1.7 times, as of June 30th, 25, down from 1.8 at the end of Q2.

Ivica Krolo: We are on track to meet our CapEx target of around €80 million for the year. Even with the share buyback we executed in May, our net leverage was 1.7 times as of June 30, 2025, down from 1.8 at the end of Q2. Without the buyback, the net leverage would have been at 1.4 times. Our capital allocation priorities continue to be number one, invest in our business; number two, reduce debt; and number three, opportunistic share buybacks. Even with the buyback, we continue to expect net leverage of approximately 1.5 times at the end of fiscal 2025. We believe we are well positioned to meet our stated growth and profitability objectives. We believe we can manage the impact of the baseline 15% EU tariff through the actions we have already taken, including targeted price increases. Pricing is not the only lever we have.

<unk> is not the only lever we have given our vertical integration additional levers include efficiencies in production vendor negotiations the optimization of the product mix and the location of products between the regions.

Speaker #5: Without the buyback, the net leverage would have been at 1.4 times. Our capital allocation priorities continue to be: number one, invest in our business; number two, reduce debt; and number three, opportunistic share buybacks.

Lastly regarding FX.

In the fourth quarter, we expect the currency headwinds from the weaker U S dollar to impact reported revenue growth and margins.

Speaker #5: Even with a buyback, we continue to expect net leverage of approximately 1.5 times at the end of fiscal 25. We believe we are well positioned to meet our stated growth and profitability objectives.

Today's euro dollar exchange rates reported revenue growth should be about 400 basis points below constant revenue growth in the fourth quarter margins will be negatively impacted by about 100 basis points, which was reflected in our guidance for the year.

Speaker #5: We believe we can manage the impact of the baseline 15% EU tariff through the actions we have already taken, including targeted price increases. Pricing is not the only lever we have.

Based on results to date and the current trends, we're seeing in the business, we expect to be at the high end of our constant currency revenue growth guidance of 15% to 17%.

Speaker #5: Given our vertical integration, additional levers include efficiencies in production, vendor negotiations, the optimization of the product mix, and the allocation of products between the regions.

Ivica Krolo: Given our vertical integration, additional levers include efficiencies in production, vendor negotiations, the optimization of the product mix, and the allocation of products between the regions. Lastly, regarding FX, in the fourth quarter, we expect the currency headwinds from the weaker US dollar to impact reported revenue growth and margins. At today's euro-dollar exchange rate, reported revenue growth should be about 400 basis points below constant revenue growth in the fourth quarter, and margins will be negatively impacted by about 100 basis points, which is reflected in our guidance for the year. Based on results to date and the current trends we are seeing in the business, we expect to be at the high end of our constant currency revenue growth guidance of 15% to 17%. We still expect adjusted EBITDA margin in the range of 31.3% to 31.8%, despite the drag from a significantly weaker US dollar.

We still expect adjusted EBITDA margin in the range of 30, 132 31, 8%. Despite the drag from a significantly weaker U S dollar.

Speaker #5: Lastly, regarding FX. In the fourth quarter, we expect the currency headwinds from the weaker US dollar to impact reported revenue growth and margins. At today's euro/dollar exchange rate, reported revenue growth should be about 400 basis points below constant revenue growth in the fourth quarter, and margins will be negatively impacted by about 100 basis points, which is reflected in our guidance for the year.

And now I'll hand, it back to Oliver.

Thanks EBITA.

We are well positioned to drive steady long term growth and shareholder returns.

We are a brand with industry, leading growth pricing power excellent profitability global reach a very healthy balance sheet and strong cash generation.

During our second quarter call, we raised our EBIT margin target based on an exchange rate of $1 12.

Speaker #5: Based on results to date, and the current trends we are seeing in the business, we expect to be at the high end of our constant currency revenue growth guidance of 15 to 17%.

Even with the current exchange rate of $1 17, I am confident we will meet our targets for the full year.

I would now kindly ask the operator to open our Q&A session.

Speaker #5: We still expect adjusted EBITDA margin in the range of 31.3% to 31.8%, despite the drag from a significantly weaker U.S. dollar. And now, I'll hand it back to Oliver.

Thank you at this time, we will be conducting a question and answer session. As a reminder, the company has asked that you. Please limit yourself to one question and one follow up and return to the queue. The company has allocated 60 minutes in total for this conference call.

Ivica Krolo: Now, I'll hand it back to Oliver.

Speaker #4: Thanks, Ivica. We are well positioned to drive steady long-term growth and shareholder returns. We are a brand with industry-leading growth, excellent pricing power, profitability, global reach, a very healthy balance sheet, and strong cash generation.

Nico Bouillaf: Thanks, Ivica. We are well positioned to drive steady long-term growth and shareholder returns. We are a brand with industry-leading growth, pricing power, excellent profitability, global reach, a very healthy balance sheet, and strong cash generation. During our second quarter call, we raised our adjusted EBITDA margin target based on an exchange rate of 112. Even with the current exchange rate of 117, I am confident we will meet our targets for the full year. I would now kindly ask the operator to open our Q&A session.

We would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys and one moment. Please while we poll for questions.

Speaker #4: During our second quarter call, we raised our EBITDA margin target based on an exchange rate of 112. Even with the current exchange rate of 117, I'm confident we will meet our targets for the full year.

And the first question today is coming from Matthew boss from Jpmorgan.

Your line is live.

Thanks, and congrats on another nice quarter.

Speaker #4: I would now kindly ask the operator to open our Q&A session.

Yeah.

So.

So Oliver could you speak to current demand trends and visibility today to the acceleration that you've embedded back to high teens constant currency in the fourth quarter and on the bottom line. Excluding foreign exchange, maybe if you could just provide some perspective on that on the more than 61% gross margin and $30.

Speaker #2: Thank you. At this time, we will be conducting a question and answer session. As a reminder, the company has asked that you please limit yourself to one question and one follow-up and return to the queue.

Operator: Thank you. At this time, we will be conducting a question and answer session. As a reminder, the company has asked that you please limit yourself to one question and one follow-up and return to the queue. The company has allocated 60 minutes in total for this conference call. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. The first question today is coming from Matthew Boss from J.P. Morgan. Matthew, your line is live.

Speaker #2: The company is allocated 60 minutes in total for this conference call. If you would like to ask a question, please press *1 on your telephone keypad.

5% EBITDA this quarter or just sustainability of this pace of improvement.

Speaker #2: A confirmation tone will indicate your line is in the question queue. You may press *2 if you would like to remove your question from the queue.

Thank you for the question Matt.

Speaker #2: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.

Youre correct without the FX headwind the EBITDA margin would have been 35, 1%. Even so this is the best margin in the Q3, we ever had.

Speaker #2: And the first question today is coming from Matthew Boss from JP Morgan. Matthew, your line is live.

All things being equal our goal is to constant drive margin improvement as we scale and grow the business. The demand. We saw in Q3 was exceptional but we're simply don't always have the capacity to meet the demand. This was especially true for the third quarter for Europe and APAC.

Speaker #6: Thanks, and congrats on another nice quarter. So, Oliver, could you speak to current demand trends and visibility today to the acceleration that you've embedded back to high teens constant currency in the fourth quarter and on the bottom line excluding foreign exchange?

Analyst: Thanks, and congrats on another nice quarter. Oliver, could you speak to current demand trends and visibility today to the acceleration that you've embedded back to high-teens constant currency in the fourth quarter? On the bottom line, excluding FX, maybe if you could just provide some perspective on the more than 61% gross margin and 35% EBITDA this quarter, or just sustainability of this pace of improvement.

And growing at this pace requires also constant improvements in efficiency and this is where I'm spending a lot of my time right now to find ways to increase production capacity and create long term efficiency.

Speaker #6: Maybe if you could just provide some perspective on the more than 61% gross margin and 35% EBITDA this quarter, or just the sustainability of this pace of improvement.

So within our own supply chain, we want to meet a strongly growing demand.

Speaker #4: Thank you for the question, Matt. You're correct, without the FX headwind, the EBITDA margin would have been 35.1% even. So this is the best margin in the Q3 we ever had.

Nico Bouillaf: Thank you for the question, Matt. You are correct. Without the FX headwind, the adjusted EBITDA margin would have been 35.1% even. This is the best margin in the Q3 we ever had. All things being equal, our goal is to constantly drive margin improvement as we scale and grow the business. The demand we saw in Q3 was exceptional, but we simply do not always have the capacity to meet the demand. This was especially true for the third quarter for EMEA and APAC. Growing at this pace requires constant improvements in efficiency, and this is where I am spending a lot of my time right now, to find ways to increase production capacity and create long-term efficiency. Within our own supply chain, we want to meet our strongly growing demand by doing both of these things: improvement in efficiency and building the capacity.

By doing both of these things improvement in efficiency and building the capacity.

And Thats you know, we strive to drive our margin improvement over long term of course, and also need to invest in the business to sustain this growth.

Speaker #4: All things being equal, our goal is to constantly drive margin improvement as we scale and grow the business. The demand we saw in Q3 was exceptional.

We are adding automation in manufacturing investing in Iot and infrastructure and we hope to streamline our processes throughout the organization.

Speaker #4: But we simply don't always have the capacity to meet that demand. This was especially true for the third quarter for Europe and APEC. And you know, growing at this pace requires constant improvements in efficiency, and this is where I'm spending a lot of my time right now.

But what we saw in demand in the market, especially in the third quarter and the.

In the back to school, but David will have a conversation about this later on was or is tremendously strong so.

So from our perspective.

Speaker #4: To find ways to increase production capacity and create long-term efficiency. So within our own supply chain, we want to meet our strongly growing demand by doing both of these things.

I don't see any slowdown in consumer demand or.

Anything.

At the moment, we are struggling with capacity that's our biggest issue.

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That's great color best of luck.

Speaker #4: Improvement in efficiency and building capacity. As you know, we strive to drive our margin improvement over the long term, and of course, we also need to invest in the business to sustain this growth.

Nico Bouillaf: As you know, we strive to drive our margin improvement over the long term, of course, and also need to invest in the business to sustain this growth. We are adding automation in manufacturing, investing in IT and infrastructure, and we hope to streamline our processes throughout the organization. What we saw in demand in the market, especially in the third quarter and in the back to school, but David Kahn will have a conversation about this later on, was or is tremendously strong. From our perspective, we do not see any slowdown in consumer demand or anything. At the moment, we are struggling with capacity. That is our biggest issue. Thank you.

Thank you. The next question will be from Dana Telsey from Telsey Group Dana Your line is live.

Hi, good morning, everyone and nice to see the progress since implementing the Python conference on July 1st can you expand on what the market responses from what is full on demand given the back to school season around will be the Nordstrom anniversary sale and the Americas.

Speaker #4: We are adding automation in manufacturing, investing in IT and infrastructure, and we hope to streamline our processes throughout the organization. But what we saw in demand in the market, especially in the third quarter and in the, you know, in the back-to-school, but David will have a conversation about this later on, was or is tremendously strong.

Thank you.

Hey, Dana this is David Thanks for the question.

As many in the industry no we anticipated the potential tariffs as best we could and we were very proactive we shared with our retail partners. Our specific plan as far back as May and on July one the price adjustments became effective I will say the adjustments we made.

Speaker #4: So from our perspective, we don't see any slowdown in consumer demand or anything. We are, at the moment, struggling with capacity—that's our biggest issue.

Speaker #4: Thank you.

Speaker #6: That's great color. Best of luck.

Analyst: It's a great color. Best of luck.

Speaker #2: Thank you. The next question will be from Dana Tulsi from Tulsi Group. Dana, your line is live.

Operator: Thank you. The next question will be from Dana Tulsey from Tulsey Group. Dana, your line is live.

With surgical by nature versus broad strokes and while they are a bit off of our historic pricing cycle. It's no different than how we have managed this in past years irregardless of tariffs. So now here. We are we're six weeks past the price actions and as I'm sure everyone's recent channel.

Speaker #7: Hi, good morning, everyone. It’s nice to see the progress. Since implementing the price increases on July 1st, can you expand on what the market response has been?

David Kahn: Hi, good morning, everyone, and nice to see the progress. Since implementing the price increases on July 1st, can you expand on what the market response has been? What are you seeing in demand given the back-to-school season we're in, maybe the Nordstrom anniversary sale in the Americas? We'd love an update. Thank you.

Speaker #7: What are you seeing in demand given the back-to-school season we're in, maybe the Nordstrom Anniversary Sale, in the Americas? Would love an update. Thank you.

Checks indicate our velocity and sell through from July and into week. Two of August the period that includes a significant chunk of the important U S back to school season has been exceptional and its escalated even beyond the selling results. We had in Q3, which historically was.

Speaker #2: Hey, Dana, this is

David Kahn: Hey, Dana, this is David. Thanks for the question. As many in the industry know, we anticipated the potential tariffs as best we could, and we were very proactive. We shared with our retail partners our specific plan as far back as May, and on July 1st, the price adjustments became effective. I will say the adjustments we made were surgical by nature versus broad strokes. While they're a bit off of our historic pricing cycle, it's no different than how we have managed this in past years, regardless of tariffs. So now here we are, we're six weeks past the price actions, and as I'm sure everyone's recent channel checks indicate, our velocity and sell-through from July and into week two of August, the period that includes a significant chunk of the important US back-to-school season, has been exceptional.

Speaker #8: David. Thanks for the question. As many in the industry know, we anticipated the potential tariffs as best we could, and we were very proactive.

Speaker #8: We shared with our retail partners our specific plan as far back as May, and on July 1st, the price adjustments became effective. I will say the adjustments we made were surgical by nature versus broad strokes, and while they're a bit off from our historic pricing cycle, it's no different than how we have managed this in past years regardless of tariffs.

When we would have high spring peak sell throughs. So we're very encouraged and we've seen no impact whatsoever. Since we took our pricing increases.

Yeah.

Thank you.

Yeah.

Thank you.

Question will be from Andrew <unk> from Piper Sandler your.

Speaker #8: So now here we are, we're six weeks past the price actions, and as I'm sure everyone's recent channel checks indicate, our velocity and sell-through from July and into week two of August—the period that includes a significant chunk of the important U.S. back-to-school season—has been exceptional.

Your line is live.

Great. Thanks, so much for taking our questions and congrats nice to see ongoing momentum.

Wanted to ask regarding the tariffs.

The EU tariff now at 15% compared to 10% before August 7th.

See any incremental impact on revenue and on margin and then as a follow up on DTC versus b to B and historical seasonality of the business is such that DTC is a little slower in <unk>, but then accelerates in the fourth quarter should we expect a similar dynamic August four.

Speaker #8: And it's escalated even beyond the selling results we had in Q3, which historically was when we would have high spring peak sell-throughs. So we're very encouraged and we've seen no impact whatsoever since we took our pricing increases.

David Kahn: It's escalated even beyond the selling results we had in Q3, which historically was when we would have high spring, peak sell-through. So we're very encouraged, and we've seen no impact whatsoever since we took our pricing increases.

Thank you.

Okay.

Speaker #7: Thank you.

David Kahn: Thank you.

Thank you Anna it's Tom so.

Speaker #2: Thank you. The next question will be from Anna Andreeva from Piper Sandler. Anna, your line is live.

We went into 2025 with an effective tariff rate of around 11%. So we have been exposed to U S. Tariffs before as you. All know this went up in April to 21%, even and this is the additional 10 you mentioned before.

Operator: Thank you. The next question will be from Anna Andreeva from Piper Sandler. Anna, your line is live.

Speaker #9: Great. Thanks so much for taking our question, and congrats. Nice to see ongoing momentum. We wanted to ask regarding the tariffs. With the EU tariff now at 15% compared to 10% before August 7th, do you see any incremental impact on revenue and on margin? And then, as a follow-up on DTC versus B2B, historical seasonality of the business is such that DTC is a little slower in Q3, but then accelerates in the fourth quarter.

David Kahn: Great. Thanks so much for taking our question and congrats. Nice to see ongoing momentum. We wanted to ask regarding the tariffs. With the EU tariff now at 15% compared to 10% before August 7th, do you see any incremental impact on revenue and on margin? As a follow-up on DTC versus B2B, historical seasonality of the business is such that DTC is a little slower in Q3s, but then accelerates in the fourth quarter. Should we expect a similar dynamic this Q4?

So following the EU U S trade deal, we now face a 15% baseline tariff on imports, which we believe is very manageable.

Our effective tariff will land somewhere just above 15%, depending largely on the product mix. So as you also know we have some items that are already tariff at over 15% and those higher tariffs historical tariffs will remain in place.

Speaker #9: Should we expect a similar dynamic this Q4?

So what's really important is first we have pricing flexibility as David said on July 1st we implemented pricing actions in the reps to offset.

Speaker #4: Thank you, Anna. It's Ivica. So we went into 2025 with an effective tariff rate of around 11%, so we have been exposed to U.S. tariffs before, as you all know.

Ivica Krolo: Thank you, Anna. It's Ivica. We went into 2025 with an effective tariff rate of around 11%. We have been exposed to U.S. tariffs before, as you all know. This went up in April to 21% even, and this is the additional 10% you mentioned before. Following the EU-US trade deal, we now face a 15% baseline tariff on EU imports, which we believe is very manageable. Our effective tariff will land somewhere just above 15%, depending largely on the product mix. As you also know, we have some items that are already tariffed at over 15%, and those higher tariffs, historical tariffs, will remain in place. What's really important is first, we have pricing flexibility. As David said, on July 1st, we implemented pricing actions in the U.S. to offset some of the expected impact with no negative market response. Second, price is not the only lever we have.

Some of the expected impact with no negative market response.

Speaker #4: This went up in April to 21% even, and this is the additional 10% you mentioned before. So, following the EU-US trade deal, we now face a 15% baseline tariff on EU imports, which we believe is very manageable.

Price is not the only lever we have with a vertically integrated supply chain, we have additional ways to offset through vendor negotiations manufacturing efficiency and optimization of our product mix.

So all in for 'twenty.

25, we will fully offset the absolute dollar impact of the tariffs.

Speaker #4: Our effective tariff will land somewhere just above 15%, depending largely on the product mix. As you also know, we have some items that are already tariffed at over 15%, and those higher historical tariffs will remain in place.

But see a very small negative on gross margin and EBITDA margin, which however is already factored into our full year guidance.

So taking the second question as well.

Speaker #4: So what's really important is first, we have pricing flexibility. As David said, on July 1st, we implemented pricing actions in the US to offset some of the expected impact with no negative market response.

On <unk> <unk>.

So we expect an acceleration in DTC in Q4 of fiscal 'twenty. Five however, as mentioned before <unk> growth will outpace in both so Q4 and for the full year and what's driving.

Speaker #4: Second, price is not the only lever we have. With a vertically integrated supply chain, we have additional ways to offset through vendor negotiations, manufacturing efficiency, and optimization of our product mix.

Ivica Krolo: With a vertically integrated supply chain, we have additional ways to offset through vendor negotiations, manufacturing efficiency, and optimization of our product mix. All in for 2025, we will fully offset the absolute dollar impact of the tariffs, but see a very small negative on gross margin and EBITDA margin, which, however, is already factored into our full-year guidance. Taking the second question as well, Anna, on DTC and B2B. We expect an acceleration in DTC in Q4 of fiscal 25. However, as mentioned before, B2B growth will outpace DTC in both Q4 and for the full year. What's driving us? The channel mix and what we've seen in Q3 was mostly driven by the continued trend towards in-person shopping, which naturally favors B2B channel over DTC. Our brand is a brand that benefits from physical shopping, where consumers can touch, feel, experience the footpad.

The channel mix and what we've seen in Q Q3 was mostly driven by the continued trends towards in personal shopping so which naturally favors BTB channel over do you just see.

Speaker #4: So, all in for 2025, we will fully offset the absolute dollar impact of the tariffs, but see a very small negative on gross margin and EBITDA margin, which, however, is already factored into our full-year guidance.

And our brand is a brand that benefits from physical shopping so where consumers can touch feel experienced the footpath. So it's optic products and especially for those who are new to the brand new to the footpath.

Speaker #4: So taking the second question, as well, Anna, on DTC and B2B, so we expect an acceleration in DTC in Q4 of fiscal 25, however, as mentioned before, B2B growth will outpace DTC in both, so Q4 and for the full year.

So our D to C business is still very much a digital platform and with 90 doors globally.

We are not able to capture all the improvement demand within our DTC business.

So the good news here is that both channels are very profitable. So we are very happy to go wherever the demand is actually.

Speaker #4: And what's driving this? So the channel mix and what we've seen in Q3 was mostly driven by the continued trend towards in-person shopping, so which naturally favors B2B channel over DTC.

However, it's very important we are not compromising quality distribution and full price realization. So we manage inventory in the <unk> channel very tightly through engineered distributional.

Speaker #4: And our brand benefits from physical shopping, where consumers can touch, feel, and experience the footbed. So it's a haptic product.

Price realization is that over 90% stock to sales ratios in the channel are very healthy and our order book is very strong.

Ivica Krolo: It's a haptic product, and especially for those who are new to the brand and new to the footpad. Our DTC business is still very much a digital platform, and with 90 doors globally, we are not able to capture all the in-person demands within our DTC business. The good news here is that both channels are very profitable, so we are very happy to go wherever the demand is, actually. All of them are very important. We are not compromising high-quality distribution and full price realization. We manage inventory in the B2B channel very tightly through our engineered distribution model. Big price realization is at over 90%. Stock-to-sales ratios in the channel are very healthy, and our order book is very strong.

Speaker #4: And especially for those who are new to the brand and new to the footbed. So our DTC business is still very much a digital platform, and with 90 doors globally, we are not able to capture all the in-person demands within our DTC business.

We're also accelerating the pace of our own store openings so that is.

While we can capture more of this in personal shopping demand in our own DTC channel.

There is no change from strategy, which includes leaning in both channels.

Speaker #4: So the good news here is that both channels are very profitable, so we are very happy to go wherever the demand is, actually. However, it's very important we are not compromising high-quality distribution and full-price realization.

And naturally a higher mix of <unk> means lower gross margin and a higher EBITDA margin.

The opposite is true.

To see mix, but both are very profitable.

Only one important facts.

Speaker #4: So we manage inventory in the B2B channel very tightly, through our engineered distribution model, good price realization is at over 90%, stock-to-sales ratios in the channel are very healthy, and our order book is very strong.

We own our own supply chain. So the <unk> order books provides for great predictability and certainly de risks our planet.

Very thorough Mitra.

Much appreciate it.

Speaker #4: We are also accelerating the pace of our own store openings, so that is why we can capture more of this in-person shopping demand in our own DTC channel.

Ivica Krolo: We are also accelerating the pace of our own store openings, so that is why we can capture more of this in-person shopping demand in our own DTC channel. There is no change in our strategy, which includes leaning in both channels. Naturally, a higher mix of B2B means lower gross margin and a higher EBITDA margin. The opposite is true for DTC mix, but both are very profitable. Finally, one important fact, as you know, we own our own supply chain. The B2B order books provide for great predictability and certainly de-risk our planning.

Thank you. The next question is coming from Laurence <unk> from BNP Paribas launch your line is live.

Good morning. Thank you very much for taking my question can I ask about EMEA growth it was a bit lower than the mid teens expectation.

Speaker #4: There is no change in our long-term strategy, which includes leaning into both channels. Naturally, a higher mix of B2B means lower gross margin and a higher EBITDA margin.

Are there any reasons why there were onetime factors for <unk> and should we expect a low teens growth rate for the screen Jen as an algorithm going forward and then I have a quick follow up on the gross margin.

Speaker #4: The opposite is true for a higher DTC mix, but both are very profitable. And finally, one important fact, as you know, we own our own supply chain, so the B2B order books provide for great predictability and certainly mitigate risks in our planning.

Hello, Rob This is niko with thank you for your question I'm happy to give some context on the EMEA numbers. So yes in our third quarter, we grew 13% in EMEA with actually a double digit growth in both <unk> and DTC and we further build on our strong third quarter of last year.

Speaker #9: Very thorough. Much appreciated.

David Kahn: Very thorough. Much appreciated.

In a market that was flat to negative I actually do believe there is a pretty strong result, as we continue to be among the best performing brands and we continue to take share of many other players.

Speaker #2: Thank you. The next question is coming from Laurent Vasileschu from BNP Paribas. Laurent, your line is live.

Operator: Thank you. The next question is coming from Laurent Vasilescu from BNP Paribas. Laurent, your line is live.

Speaker #10: Oh, good morning. Thank you very much for taking my question. Can I ask about Mayor growth? It was a bit lower than the mid-teens expectation.

Oliver Reichert: Good morning. Thank you very much for taking my question. Can I ask about our EMEA growth? It was a bit lower than the mid-teens expectation. Are there any reasons why there were one-time factors for Q3, and should we expect a low teens growth rate for this region as a going forward? Then I have a quick follow-up on the gross margin.

I have to admit that this quarter was a more challenging one for our region and Oliver alluded to that already or not and I have to underline. This because we are facing a structural demand issue. In fact, we continue to see very strong demand for our product. The challenge for US. This time was that we are simply unable to capture the full relevant demand due to limited production capacity.

Speaker #10: Are there any reasons why there were one-time factors for Q3, and should we expect a low-teens growth rate for this region as a new algorithm going forward?

Speaker #10: And then I have a quick follow-up on the gross margin.

Speaker #4: Hey, Laurent. This is Nico and thank you for your question. I'm happy to give some context on the IMEA numbers. So yes, in our third quarter, we grew 13% in IMEA.

Ivica Krolo: Hello, all. This is Nico. Thank you for your question. I am happy to give some context on the EMEA numbers. Yes, in our third quarter, we grew 13% in EMEA, with actually double-digit growth in both B2B and DTC, and we further built on a strong third quarter of last year. In a market that was flat to negative, I actually do believe this is a pretty strong result as we continue to be among the best-performing brands, and we continue to take share of many other players. I have to admit this quarter was a more challenging one for our region, and Oliver alluded to that already. Not, and I have to underline this, because we are facing a structural demand issue. In fact, we continue to see very strong demand for our product.

In other words, we simply didn't have the product that hand to capture the full relevant demand.

Allow me to give you some context on the numbers I have heard in regards of trading so third quarter. We saw strong sell through results at our wholesale partners of plus 20% versus last year, and Reorders, which is a direct demand signal increased significantly along the quarter versus last year as Oliver said, our same store sales.

Speaker #4: With actually double-digit growth in both B2B and DTC, and we further build on a strong third quarter of last year. In a market that was flat to negative, I actually do believe there's a pretty strong result as we continue to be among the best-performing brands and we continue to take share of many other players.

In retail went up significantly double digit another great demand signal.

Speaker #4: I have to admit this quarter was a more challenging one for our region, and Oliver alluded to that already. Not, and I have to underline this because we are facing a structural demand issue.

This increases and with the spring Summer 'twenty five collection were fully absorbed by the market and we maintained our full price realization of over 90%.

Speaker #4: In fact, we continue to see very strong demand for our product. The challenge this time was that we are simply unable to capture the full relevant demand due to limited production capacity.

As in America. The summer started a bit later than in our core markets than we expected. So April and may were a bit softer, but what we saw in June was a full reversal of that trend and we could see record sales across all channels and partners what.

Ivica Krolo: The challenge this time was that we are simply unable to capture the full relevant demand due to limited production capacity. In other words, we simply did not have the product at hand to capture the full relevant demand. Allow me to give you some context on the numbers further in regards to trading. Third quarter, we saw strong sell-through results at our wholesale partners of plus 20% versus last year, and reorders, which is a direct demand signal, increased significantly along the quarter versus last year. As Oliver said, our same-store sales in retail went up significantly double-digit, another great demand signal. Our price increases with the spring/summer 25 collection were fully absorbed by the market, and we maintained our full price realization of over 90%.

Speaker #4: In other words, we simply didn't have the product at hand to capture the full relevant demand. Allow me to give you some context on the numbers.

What we've seen so far for Q4. There was also a part of your question is that is going to be a stronger quarter in EMEA and should return to a mid high teens growth in regards of the consumer.

Speaker #4: Further, in regard to trading, in the third quarter, we saw strong sell-through results at our wholesale partners of plus 20% versus last year. Additionally, reorders, which are a direct demand signal, increased significantly throughout the quarter compared to last year.

Yes, they have been impacted by a lot of uncertainty in the European zone, but I can definitely confirm that theres no deviation for us from a brand health perspective, I can definitely confirm broken stock continues to be one of the chosen brands.

Speaker #4: As Oliver said, our same-store sales in retail went up significantly, double-digit; another great demand signal. Our price increases with the Spring/Summer '25 collection were fully absorbed by the market, and we maintained our full-price realization of over 90%.

Very helpful. Nicole. Thank you very much and then if it's a megan with.

With regards to the four key gross margin I know there was a lot of noise last year relative on a year over year basis, I think gms were down like 600 basis points, but should we assume it's <unk> gross margins are up by 200 basis points and then last our last call. During the Q&A I think there was commentary that that gross margin should be.

Speaker #4: As an Americas, the summer started a bit later than in our core markets than we expected, so April and May were a bit softer.

Ivica Krolo: As in Americas, the summer started a bit later than in our core markets than we expected, so April and May were a bit softer, but what we saw in June was a full reversal of that trend, and we could see record sales across all channels and partners. What we have seen so far for Q4, that was also part of your question, is that it is going to be a stronger quarter in EMEA, and should we turn to mid-high teens growth? In regards to the consumer, yes, they have been impacted by a lot of uncertainty in the European zone, but I can definitely confirm that there is no deviation for us from a brand health perspective. I can definitely confirm Birkenstock continues to be one of the chosen brands.

Speaker #4: But what we saw in June was a full reversal of that trend, and we could see record sales across all channels and partners. What we've seen so far for Q4, there was also part of your question, is that it's going to be a stronger quarter in IMEA and should we turn to mid-high-teens growth.

For next fiscal year is that still the case the way to think about it despite FX incremental tariffs. Thank you very much.

Speaker #4: In regards to the consumer, yes, they have been impacted by a lot of uncertainty in the European zone. But I can definitely confirm that there's no deviation for us from a brand health perspective.

Hi, Laura.

Gross margin was up this quarter by 100 basis points and there is basically two main drivers.

<unk> depth first and most important is pricing net over inflation, which contributed 120 basis points.

Speaker #4: I can definitely confirm Birkenstock continues to be one of the chosen brands. Very helpful, Nico. Thank you very much. And then, Ivica, Megan, with regards to the Q4 gross margin, I know there was a lot of noise last year relative on a year-over-year basis.

Oliver Reichert: Very helpful, Nico. Thank you very much. Ivica and Megan, with regards to the Q4 gross margin, I know there was a lot of noise last year relative on a year-over-year basis. I think GMs were down like 600 basis points, but should we assume Q4 gross margins are up like 200 basis points? Last call during the Q&A, I think there was commentary that gross margins should be up for next fiscal year. Is that still the case, the way to think about it despite FX and incremental tariffs? Thank you very much.

And the second point is that we continue continuously.

A better absorption with regards to our newest manufacturing facility.

Speaker #4: I think GMs were down like 600 basis points, but should we assume if Q4 gross margins are up like 200 basis points and then last call during the Q&A, I think there was commentary that gross margins should be up for next fiscal year.

And part of the book, which contributed 80 basis points.

This quarter and if you compare it to the Q2. This year. This is a trend that we are continuing to see and which are the biggest drivers behind gross margin expansion on the flip side the.

Speaker #4: Is that still the case, the way to think about it despite FX and incremental tariffs? Thank you very much.

The drag of FX.

Was 60 basis points, but overall.

Speaker #5: Hi, Laurent. So gross margin

Ivica Krolo: Hi, Laurent. Gross margin was up this quarter by 100 basis points, and there are basically two main drivers behind that. The first and most important is pricing net over inflation, which contributed 120 basis points. The second point is that we continuously see a better absorption with regards to our newest manufacturing facility in Parzival, which contributed 80 basis points this quarter. If you compare it to Q2 this year, this is a trend that we are continuing to see and which are the biggest drivers behind gross margin expansion. On the flip side, the drag of FX was 60 basis points, but overall, we continue for this year to come closer to our 60% gross margin target.

Speaker #4: was up this quarter by 100 basis points, and there are basically two main drivers behind that. The first and most important is pricing net over inflation, which contributed 120 basis points, and the second point is that we continuously see better absorption with regard to our newest manufacturing facility in Pasewalk, which contributed 80 basis points.

We continue for this year to come closer to our 60% gross margin target.

Thank you very much and best of luck.

Thank you. The next question will be from Randy <unk> from Jefferies. Randy Your line is live.

Yes, Thanks, a lot and good morning, everybody.

Just on the <unk>.

<unk> versus D to C. Just so we have a thought process for into next fiscal year.

Speaker #4: This quarter, and if you compare it to the Q2 this year, this is a trend that we are continuing to see and which are the biggest drivers behind gross margin expansion.

Would you want us to kind of think about.

<unk>, leading from a gross gross rate perspective over D to C or any kind of thought process change to that just so we know.

And then.

You talked about.

Speaker #4: On the flip side, the drag of FX was 60 basis points. However, overall, we continue to move closer to our 60% gross margin target for this year.

So good significant improvement in penetration in closed toe, obviously, Boston et cetera can you give us some perspective, just round that out a little bit more beyond the Boston other kind of wins, you're getting in close that would be super helpful. Thanks, guys.

Speaker #4: Thank you very much, and best of luck.

Oliver Reichert: Thank you very much, and best of luck.

Thanks, Randy it's Tom again coming.

Speaker #2: Thank you. The next question will be from Randy Konik from Jefferies. Randy, your line is live.

Operator: Thank you. The next question will be from Randy Konik from Jefferies. Randy, your line is live.

Coming back to your question with regards to <unk>. What is what is driving that and how could you think about it in the in terms of next year. So we haven't given guidance yet for 2026 naturally however.

Speaker #6: Yeah, thanks a lot, and good morning, everybody. Just on the B2B versus DTC, just so we have a thought process for into next fiscal year.

Analyst: Yeah, thanks a lot, Nico. Good morning, everybody. Just on the B2B versus DTC, just so we have a thought process for into next fiscal year, would you want us to kind of think about B2B leading from a growth rate perspective over DTC, or any kind of thought process change to that, just so we know? Then you talked about some good significant improvement in penetration in closed-toe silhouettes, obviously Boston, et cetera. Can you give us some perspective? Just round that out a little bit more beyond the Boston, other kind of wins you're getting in closed-toe silhouettes would be super helpful. Thank that.

Speaker #6: Would you want us to kind of think about B2B leading from a growth rate perspective over DTC, or any kind of thought process change to that, just so we know?

What we see is constant drive towards in person shopping and this is basically.

Why and where we are serving.

Speaker #6: And then you talked about some good significant improvement in penetration and closed toe. Obviously, the Boston et cetera. Can you give us some perspective just round that out a little bit more?

The demand where the actual customer wants wants to be served and this is certainly driving or thought process.

The reason why we're also seeing that increase in b to b and the demands of our retail partners.

Speaker #6: Beyond the Boston, other kind of wins you're getting in closed toe would be super helpful. Thanks, guys.

With regards to your second question on on close to we see expanded.

Speaker #4: Thanks, Randy. It's Ivica. Again, coming back to your question regarding B2B and what is driving that, how could you think about it in terms of next year.

Ivica Krolo: Thanks, Randy. It's Ivica again. Coming back to your question with regards to B2B and what is driving that, and how could you think about it in the terms of next year? We haven't given guidance yet for 2026, naturally. However, what we see is a constant drive toward in-person shopping, and this is basically why and where we are serving the demand where the actual customer wants to be served. This is certainly driving our thought process, and this is the reason why we are also seeing that increase in B2B and the demand of our retail partners. With regards to your second question on closed-toe, we see an expanded closed-toe share in Q3 by 400 basis points, and looking at the product categories, we see that the non-Boston silhouette is growing the same rate as the Boston.

Close to share in Q3 400 <unk>.

<unk> points and looking at the <unk>.

Product categories.

We see that non Boston through App is growing the same rate as the Boston So across the board and also with the newness that we have introduced we feel very comfortable on the growth rates, we're seeing in the coastal steward.

Speaker #4: So we haven't given guidance yet for 2026, naturally. However, what we see is constant drive towards in-person shopping and this is basically why and where we are serving the demand where the actual customer wants to be served.

Thank you.

Thank you. The next question will be from Jay sole from UBS J. Your line is live.

Speaker #4: And this is certainly driving our thought process and this is the reason why we are also seeing that increase in B2B and the demand of our retail partners.

Great. Thank you so much Oliver I wanted to ask about the durability of the ASP gains that you're seeing because with FX and tariffs and price increases because of tariffs. There's a lot of noise around asps, but it's been a good trend for a long time.

Speaker #4: With regards to your second question on closed toe, we see an expanded closed toe share in Q3 by 400 basis points, and looking at the product categories, we see that the non-Boston silhouette is growing the same rate as the Boston, so across the board and also with the newness that we have introduced, we feel very comfortable on the growth rates we are seeing in the closed toe silhouette.

How much further into the future can you see good ASP gains for Birkenstocks and why.

Thank you very much.

Again, if you disaggregate growth for this quarter as we see high single digit volume growth and mid single digit ESP growth and if you look at ISP.

Ivica Krolo: So across the board, and also with the newness that we have introduced, we feel very comfortable on the growth rates we are seeing in the closed-toe silhouette.

This is not only like for like price however, like for like price has contributed.

Speaker #4: Thank you.

Oliver Reichert: Thank you.

To that growth.

But it's also <unk>.

Speaker #2: Thank you. The next question will be from Jay Sol from UBS. Jay, your line is live.

Operator: Thank you. The next question will be from Jay Sol from UBS. Jay, your line is live.

Product mix and we see an increased share of close to <unk> as mentioned 400 basis points in Q3, but we also see continued trends and demand of customers to high quality execution preference to lever and this was also reflected in the ASP growth.

Speaker #10: Great. Thank you so much. Oliver, I want to ask about the durability of the ASP gains that you've seen, because with FX and tariffs and price increases because of tariffs, there's a lot of noise around ASP, but it's been a good trend for a long time.

Analyst: Great. Thank you so much. You know, Oliver Reichert, I want to ask about the durability of the ASP gains that you've seen. Because with FX and tariffs and price increases because of tariffs, there is a lot of noise around ASP, but it has been a good trend for a long time. You know, how much further into the future can you see good ASP gains for Birkenstock and why?

Speaker #10: How much further into the future can you see good ASP gains for Birkenstock and why?

Okay got it okay. Thank you so much.

Thank you. The next question will be from Adrian <unk> from Goldman Sachs.

Speaker #4: Thank you very much. It's Ivica again, and if you disaggregate growth for this quarter, we see high single-digit volume growth and mid-single-digit ASP growth.

Ivica Krolo: Thank you very much. It's Ivica Krolo again. If you disaggregate growth for these quarters, we see high single-digit volume growth and mid-single-digit ASP growth. If you look at ASP, this is not only like-for-like price. However, like-for-like price has contributed to that growth, but it's also product mix. We see an increased share of closed-toe silhouettes, as mentioned, 400 basis points in Q3. We also see the continued trend and demand of customers for high-quality executions, so the preference for leather, and this is also reflected in the ASP growth.

And your line is nice.

Hey, good afternoon. Thank you very much for taking my questions.

Speaker #4: And if you look at ASP, this is not only like-for-like price, however, like-for-like price has contributed to that growth. But it's also product mix, and we see an increased share of closed toe as mentioned, 400 basis points in Q3, but we also see the continued trend and demand of customers to high-quality executions, so the preference to leather, and this is also reflected in the ASP growth.

Could you please comment on the factory expansion plans and how they are progressing versus your expectations and how would you expect the additional supply to evolve over the next few years bought shares given the context, you've given today, where supply seems to be the main constraint in the business. Thank you very much.

Hi.

Again on factory expansion, and especially puzzle box. So we've set that we are expecting full absorption by end of Q3.

Speaker #10: Got it. Okay, thank you so much.

Analyst: Got it. Okay, thank you so much.

26.

Well on plan.

Maybe even ahead of that plan when it comes to full capacity utilization. So this works. According to what we have initially SAP and coming back to.

Speaker #2: Thank you. The next question will be from Adrian Duverger from Goldman Sachs. Adrian, your line is live.

Operator: Thank you. The next question will be from Adrian Duwerger from Goldman Sachs. Adrian, your line is live.

Speaker #11: Hey, good afternoon. Thank you very much for taking my questions. So could you please comment on the factory expansion plans and how they are progressing versus your expectations?

Analyst: Hey, good afternoon. Thank you very much for taking my questions. Could you please comment on the factory expansion plans and how they are progressing versus your expectations? How would you expect the additional supply to evolve over the next three years, particularly given the context you've given today where supply seems to be the main constraint in the business? Thank you very much.

On capacity overall.

Looking at our longer term growth algorithm, we said, we will be growing by mid to high teens and that means naturally doubling the business every five years. So we are making sure that our capacity in terms of production manufacturing, but also beyond that just considering the logistics network.

Speaker #11: And how would you expect the additional supply to evolve over the next few years? Particularly given the context you've given today, where supply seems to be the main constraint in the business.

Speaker #11: Thank you very much.

Speaker #4: Hi, it's Ivica. Again, on factory expansion and especially Pasewalk. So we have said that we are expecting full absorption by end of Q3, '26.

Ivica Krolo: Hi, it's Ivica Krolo again on factory expansion and especially Parzival. We have said that we are expecting full absorption by end of Q3 2026. We are well on plan, maybe even ahead of that plan when it comes to full capacity utilization. This works according to what we have initially said. Coming back to capacity overall and looking at our longer-term growth algorithm, we said we will be growing by mid to high teens, and that means naturally doubling the business every five years. We are making sure that our capacity in terms of production, manufacturing, but also beyond that, just considering the logistics network, is able to keep up with the growth. This means additional investments, especially in core latex, but also final assembly, and this is what we are currently looking at to keep up with the demand that we are seeing generally in the market.

It's able to keep up with the growth and this means additional investments, especially.

Copel Opex.

Also final Assembly and this is what we are currently looking at to keep up with the demand that we're seeing generally in the market.

Speaker #4: We are well on plan. Maybe even ahead of that plan when it comes to full capacity utilization. So this works according to what we have initially set and coming back to capacity overall, and looking at our longer-term growth algorithm, we said we will be growing by mid to high teens, and that means naturally doubling the business every five years.

And this is also perfectly in line.

We've always said investing in our business in terms of capital allocation remains our top priority. So we are well on track to invest around $80 million for.

For Capex over the course of this year and this is something.

That you can expect into the future including additional.

Speaker #4: So we are making sure that our capacity in terms of production, manufacturing, but also beyond that, just considering logistics network, is able to keep up with the growth.

Investments in building up our capacity.

Okay. Thank you. Thank you very much on this and if I can just maybe follow up on the wholesale channel could you. Please comment on the confidence across the wholesale partners and how you would compare this.

Speaker #4: And this means additional investments, especially in corporate APEX, but also final assembly. And this is what we are currently looking at to keep up with the demand that we are seeing generally in the market.

To like six or six months ago. For example, thank you.

Hey, This is David I think we've spoke for a few calls about general shopping being slower, but intentional purchasing for the chosen brand for the few most successful brands being even stronger so the wholesale partners are certainly the ones that are <unk>.

Speaker #4: And this is also perfectly in line that we've always said investing in our business in terms of capital allocation remains our top priority. So we are well on track to invest around 80 million for CAPEX over the course of this year, and this is something that you can expect into the future, including additional investments in building up our capacity.

Ivica Krolo: This is also perfectly in line that we've always said investing in our business in terms of capital allocation remains our top priority. We are well on track to invest around $80 million for CapEx over the course of this year, and this is something that you can expect into the future, including additional investments in building up our capacity.

<unk> that and Theyre mirroring consumer behaviors. So there's certainly the appetite for more of our product and not just in quantity, but in breadth of styles, but we always maintain.

High level of relative scarcity in the more we do that the more we put into the market and the more of the demand is from our wholesale partners. So it continues to escalate.

Speaker #11: Okay, thank you very much on this. And if I can just maybe follow up on the wholesale channel. Could you please comment on the confidence across the wholesale partners and how you would compare this to like six months ago, for example?

Analyst: Okay, thank you very much on this. If I can just maybe follow up on the wholesale channel, could you please comment on the confidence across the wholesale partners and how you would compare this to like six months ago, for example? Thank you.

Around the world quarter after quarter.

Speaker #11: Thank you.

Thank you very much.

Speaker #4: Hey, this is David.

Thank you. The next question will be from Sam Poser from Williams trading Sam Your line is live.

David Kahn: This is David. I think we have spoken for a few calls about general shopping being slower, but intentional purchasing for the chosen brands, for the few most successful brands being even stronger. The wholesale partners are certainly the ones that are driving that, and they are mirroring consumer behavior. There is certainly the appetite for more of our product, not just in quantity, but in breadth of styles, but we always maintain a high level of relative scarcity. The more we do that, the more we put into the market, and the more the demand is from our wholesale partners. So it continues to escalate around the world quarter after quarter.

Speaker #8: I think we've spoken for a few calls about general shopping being slower, but intentional purchasing for the chosen brands for the few most successful brands being even stronger.

Good morning, Thank you for taking my questions I've got I.

I guess, two and a half so Aspen you mentioned can you give us a breakout of what the.

Speaker #8: So the wholesale partners are certainly the ones that are driving that, and they're mirroring consumer behavior. So there's certainly the appetite for more of our product and not just in quantity, but in breadth of styles.

In the U S store comps of the comp stores were averse as compared to the total.

And I guess, probably about six or seven of them.

Stores are comp.

Speaker #8: But we always maintain a high level of relative scarcity. And the more we do that, the more we put into the market, and the more the demand is from our wholesale partners.

Number one.

Number two.

Can you give us.

Specifically I know you said it but could you give us specifically what the reported revenue youre looking at for the full year is based on today.

Speaker #8: So it continues to escalate around the world quarter after quarter.

Based on the.

What that reflects on an FX neutral basis and three the tariffs.

Speaker #11: Thank you very much.

Analyst: Thank you very much.

Speaker #2: Thank you. The next question will be from Sam Poser from Williams Trading. Sam, your line is live.

Operator: Thank you. The next question will be from Sam Poser from Williams Trading. Sam, your line is live.

On your product you were at 11.

Went to <unk>. So there's only four 4% variance you're not it's not a stock number that's correct. So so actually it came down from.

Speaker #6: Good Good morning. Thank you for taking my questions. I've got I guess two and a half. So I'll ask them. You mentioned the, can you give us a breakout of what the in the US, of what the store comps of the comp stores were versus as compared to the total?

Analyst: Good morning. Thank you for taking my questions. I have, I guess, two and a half, so I will ask them. You mentioned, can you give us a breakout of what, in the U.S., the store comps of the comp stores were as compared to the total? I guess probably about six or seven of your stores are comp now. That is number one. Number two, can you give?

'twenty one.

Okay.

<unk>.

And since you asked Scott.

If I understand it correctly.

Speaker #6: And I guess probably about six or seven of your stores are comp. That's number one. Number two, can you give us specifically, I know you said it, but can you give us specifically what the reported revenue you're looking at for the full year is, based on today?

Hello, Sam.

Operator: us specifically, I know you said it, but can you give us specifically what the reported revenue you are looking at for the full year is based on today, based on what that reflects on an FX neutral basis? Three, the tariffs on your product, you were at 11%, it went to 15%. So there is only that 4% variance. You are not, it is not a stack number. That is correct. So actually, it came down from 21% or so to 15% since you last guided it, if I understand it correctly. Hello?

Hey, it's David here.

Yes.

Our comps in our own retail stores were up high teens.

Very successful quarter for us.

Speaker #6: Based on the what that reflects on an FX neutral basis. And three, the tariffs, on your product, you were at 11. It went to 15.

And again, what's happened in our retail stores, even more than in the wholesale partners is.

Higher transaction value per transaction higher ASP. The velocity has been very significant and all of the new products that we've introduced because obviously we've had some winners out in the wholesale world. We're just able to showcase so many more of the breath of product. So we're seeing a spread be.

Speaker #6: So there's only that 4% variance. It's not a stack number. That's correct. So actually, it came down from 21 to or so to 15 since you last guided it, if I'm understanding correctly.

Much more significant but very successful quarter in our own retail stores.

Mirroring.

Exactly what happened at wholesale.

Speaker #6: Hello?

Okay.

Call Center Operator: Hey, Sam. It's David here. Yeah, our comps in our own retail stores were up high teens. Very successful quarter for us. Again, what's happened in our retail stores even more than in the wholesale partners is higher transaction value per transaction, higher ASP. The velocity has been very significant. All of the new products that we've introduced, because obviously we've had some winners out in the wholesale world, we're just able to showcase so many more of the breadth of product. We're seeing a spread be much more significant. Very successful quarter in our own retail stores mirroring exactly what happened at wholesale.

So Sam on your question with regards to FX. It's a speaking again, so the FX headwind that we've been seeing.

The third quarter was significant so it was a 5% depreciation in the U S dollar on average in the quarter.

The average USD Euro exchange rate was $1 13 compared to $1 eight.

108 in the third quarter. So this resulted in a drag of 330 basis points. If you look at <unk>.

Into Q4.

We expect a revenue.

Drag of around 400 basis points compared to where the U S. Dollar is currently trading at which was 117.

Compared to previous year. So if you look at the entire fiscal 'twenty five.

Nico Bouillaf: Well, Sam, on your question with regards to FX, Ivica Krolo is speaking again. The FX headwind that we have been seeing in the third quarter was significant. It was a 5% depreciation in the U.S. dollar on average in the quarter. The average USD euro exchange rate was 1.13 compared to 1.08 in the third quarter. This resulted in a drag of 330 basis points. If you look ahead into Q4, we expect a revenue drag of around 400 basis points compared to where the U.S. dollar is currently trading at, which is 1.17 compared to the previous year. If you look at the entire fiscal 2025, you will certainly remember that in the first and second quarter, we had some currency tailwinds. This turned in the third and is now turning into the fourth quarter into headwinds.

You will certainly remember that on the first and second quarter, we had some currency.

This turned in the third.

Now turning into the fourth quarter into headwinds and overall, we expect a drag of around 150 to 200 basis points for the full fiscal year.

And then covering your question.

On on tariffs.

Yes.

The blended rate.

Was 11%, but this is indeed, a blended rate so preliminary <unk> data certainly are aware there are some products, which have a lower rate than that and some that have a higher rate than that and for those that have been terrific at a lower rate the rate will go up to.

15, and for those products and materials that have already a historically high early higher rate.

25% this higher rate will remain in place as such we expect.

Nico Bouillaf: Overall, we expect a drag of around 150 to 200 basis points for the full fiscal year. Then covering your question on tariffs, the blended rate was 11%, but this is indeed a blended rate. Pre-liberation date, as you certainly are aware, there are some products which had a lower rate than that and some that had a higher rate than that. For those that have been tariffed at a lower rate, the rate will go up to 15%. For those products and materials that had already a historically higher rate, say 25%, this higher rate will remain in place. As such, we expect to be slightly higher than 15%, but depending on the overall product mix.

To be.

Slightly higher than 15, but depending on the overall product mix.

But a few months ago your blended rate with the additional tariffs were stacked so it would have stacked on top of that blended 11 additional <unk> and now it's just 15, which would help you which is less than what you thought it was what's going to be three months ago is that is that fair.

Yes, it's fair to say that.

So compared to the additional 10 risk parochial tariff, which would have led to 'twenty one blended with the 15, where blended 15, we would be slightly better this is true.

Thank you very much.

Thank you. The next question will be from Ed <unk> from Morgan Stanley.

Ed Your line is.

Yes, hi, good afternoon, good morning, guys.

Operator: But a few months ago, your blended rate with the additional tariffs were stacked. So it would have stacked on top of that blended 11%, an additional 10%. Now it's just 15%, which would help you, which is less than what you thought it was going to be three months ago. Is that fair?

First one is a clarification. So I can say I couldnt really hear what you said on the DTC in Q4.

You imply that DTC would reaccelerate from the plus 12 U you printed in Q3 to mid teen rate on that just to make sure I understood. It correctly.

Nico Bouillaf: Yes, it is fair to say that. Compared to the additional 10% reciprocal tariff, which would have led to 21% blended, with the 15% or blended 15%, we would be slightly better. This is true.

Number one and the second one is also a clarification is that.

Right to assume that most of the goods that you are selling in fiscal 'twenty five in the U S had already been shipped.

Prior to kind of Liberation day, and therefore, you have very limited or no tariff impact and that it will come in 2600, <unk>. If you could clarify that that would be helpful. Thank you.

Operator: Thank you very much.

Megan Kulick: Thank you. The next question will be from Ed Alban from Morgan Stanley. Ed, your line is up.

And on the first part of the question with regards to DTC. So.

Ivica Krolo: Yeah, hi. Good afternoon. Good morning, guys. Ivica, so first one is a clarification. Sorry, because I couldn't really hear what you said on the DTC in Q4. Did you imply that DTC would re-accelerate from the plus 12% you printed in Q3 to a mid-teen rate or not, just to make sure I understood it correctly? Number one. The second one is also a clarification. Am I right to assume that, you know, most of the goods that you're selling in fiscal 2025 in the U.S. had already been shipped prior to kind of liberation day, and therefore you have very limited, if no, tariff impact, and that it will come in 2026? If you could clarify that, that would be helpful. Thank you.

We expect indeed.

Acceleration in D C. In the fourth quarter of this fiscal year. However, as mentioned before B to B will outpace did.

Did you see in both Q4 and.

For the full fiscal 'twenty, five however, D to C will accelerate in.

In Q4.

With regards to.

Yeah.

Tariffs and inventory, so generally and more broadly speaking we have had a very good inventory position, but it is not depth limited to U S. Only so looking at our inventory it's very productive.

It's pre allocated to customer orders and certainly very good inventory position does help to mitigate adverse effects.

Nico Bouillaf: On the first part of the question with regards to DTC, we expect indeed an acceleration in DTC in the fourth quarter of this fiscal year. However, as mentioned before, B2B will outpace DTC in both Q4 and the full fiscal 2025. However, DTC will accelerate in Q4. With regards to tariffs and inventory, generally and more broadly speaking, we have had a very good inventory position, but it is not limited to the US only. Looking at our inventory, it is very productive. It is pre-allocated to customer orders, and certainly a very good inventory position does help to mitigate adverse effects.

Yes.

So, but just to follow up on my question. So again that would imply that you had little impact in fiscal 'twenty five rate is that fair to say.

That's true.

And certainly inventory position.

Helped in that regard.

Okay. Thank you so much.

Thank you. The next question will be from Janine Stichter from BTG Jeanine Your line is live.

Hi, Thanks for taking my question.

I was hoping you could expand a bit on the day to day business you talk about 90% of the growth coming from existing doors, how do you feel about where the ceiling is.

Alright, congrats on shelf space in those existing doors, and then maybe you talk a little bit more about what youre seeing from the 10% new doors that youre opening whether it's sporting goods outdoor channel.

Um, on the first part, um, of the question with regards to, uh, a DTC. So um, we expect indeed a acceleration uh, in d2c and the fourth quarter of this fiscal year. However, as as mentioned before, um, B2B will outpace, um, d2c in both so Q4 and, um, the full fiscal 25. However, did you see will accelerate, um, in Q4, um, with regards to, um, tariffs and and inventory. So generally and more broadly speaking, we have had a very good inventory position but it's not that limited to us only. So, looking at our inventory, it's very productive. Um, it's pre-allocated to customer orders and certainly

Im curious what youre seeing in those new external thank you.

Um, very good inventory position does help, um, to mitigate adverse effects.

Ivica Krolo: So, but just to follow up on my question, again, that would imply that you had little impact in fiscal 2025, right? Is that fair to say?

Yeah.

Yeah.

Yeah. We've said this is David we've said that 90% of our growth 90, plus comes from existing doors, which means it's more penetration in styles and Skus and also some depth of inventory, we're very deliberate in expanding doors, and especially expanding any new points of.

So, but just to follow up on my question. So again, that would imply that you had little impact in the physical 25, right? Is that fair to say,

Nico Bouillaf: is true. And certainly, the inventory position helped in that regard.

Ivica Krolo: Okay, thank you so much.

That's true, um, and certainly the inventory position helped in that regard.

Okay, thank you so much.

Megan Kulick: Thank you. The next question will be from Janine Stichter from BTIG. Janine, your line is live.

Distribution they might be in the professional space they might be in more run recovery space or outdoor but again, it's very deliberate significantly the growth is coming from some additional door counts in some key partners, but it's really coming from breadth of styles additional inventory and the fact that we're at.

Analyst: Hi, thanks for taking my question. I was hoping you could expand a bit on the B2B business. You talk about 90% of the growth coming from existing doors. How do you feel about where the ceiling is for growth or growth in sales space from those existing doors? Then maybe you talk a little bit more about what you are seeing from the 10% new doors that you are opening, whether it is sporting goods, the outdoor channel, run specialties. Curious what you are seeing in those newer channels. Thank you.

Thank you. The next question will be from Janine Sticker from BTIG. Janine, your line is live.

Just performing at a level that significantly.

Above the peer group I mean, youre looking at a flat business, where we're up so certainly we're taking share, but we're doing it very deliberately and as Niko said when he talked about retail in EMEA, we never ever compromise the relative scarcity.

Hi, thanks for taking my question. Um, I was hoping you could expand a bit on the B2B business. You talk about 90% of the growth coming from existing doors. How do you feel about where the feeling is for growth in the child space from those existing doors? And then maybe you could talk a little bit more about what you're seeing from the 10% new doors that you're opening, whether it's Sporting Goods, the Outdoor Channel, or run specialty. I'm curious about what you're seeing in those newer channels. Thank you.

David Kahn: Yeah, we have said, this is David. We have said that 90% of our growth, 90% plus, comes from existing doors, which means it is more penetration in styles and SKUs and also some depth of inventory. We are very deliberate in expanding doors and especially expanding any new points of distribution. They might be in the professional space. They might be in more run recovery space or outdoor. Again, it is very deliberate. Significantly, the growth is coming from some additional door counts and some key partners, but it is really coming from breadth of styles, additional inventory, and the fact that we are just performing at a level that is significantly above the peer group. You are looking at a flat business where we are up. Certainly we are taking share, but we are doing it very deliberately.

Okay. Thanks, so much.

Thank you. The next question will be from Mark <unk> from Baird Mark Your line is live.

Great. Good morning, Thank you for taking my questions.

I guess, just first thinking about.

Um yeah we've said uh this is David. We've said that 90% of our growth 90 plus comes from existing doors which means it's more penetration in Styles and skus and also some depth of inventory. We're very deliberate in expanding doors and especially expanding any new points of distribution. They might be in the professional space. They might be in more run. Recovery space or outdoor?

The DTC business, where perhaps you have some more granular customer data curious what youre seeing in terms of sort of new customer growth versus spend per customer or frequency per customer, obviously closed toe penetration growth continues to be a theme here.

I'm just wondering to what extent that sandals buyers that are also buying closed toe styles versus the close to bringing a new customer.

The brand just maybe how those trends may be evolving.

David Kahn: As Nico said, when he talked about retail in EMEA, we never ever compromise the relative scarcity.

Thanks, and then one quick.

Guidance follow up as well.

Okay.

But again it's very deliberate significantly. The growth is coming from some additional door counts and some key Partners, but it's really coming from breath of styles, additional inventory and the fact that we're just performing at a level that's significantly. Um, above the peer group. I mean, you're looking at a flat business where we're up, so certainly we're taking share but we're doing it very deliberately and as Nico said, when he talked about retail in uh, EA, um, we never ever compromise the relative scarcity,

Analyst: Great, thanks so much.

Hi, This is Nick I'm going to give you some context on the DTC trading.

Thank you so much.

Megan Kulick: Thank you. The next question will be from Mark Altschwager from Baird. Mark, your line is live.

And also acquisition.

New customers, but also how we.

Ivica Krolo: is great. Good morning. Thank you for taking my questions. I guess just thinking about the DTC business where perhaps you have some more granular customer data, curious what you are seeing in terms of new customer growth versus spend per customer or frequency per customer. Obviously, closed-toe penetration growth continues to be a theme here. Just wondering to what extent that sandals buyers that are also buying closed-toe styles versus the closed-toe bringing in new customer into the brand, just maybe how those trends may be evolving. Thanks. One quick guidance follow-up as well.

Thank you. The next question, will be from Mark treyger from be Mark. Your line is live.

How pleased we are with the success of expansionary categories and new categories. So what we typically see and we've been sharing that over the course over the last quarters is that in our DTC, we have higher share in a higher growth of so-called expansionary categories. So new categories that would be exposed to our consumers in DTC.

Through our online.

Shop or in our physical retail they are fast adopted by consumers than our b to b partner.

And then in our B to B partners. We also do is for sure. We have the power to celebrate the full line in our DTC, whereas b to B partners typically a more safer, placing dubai, but we use the great success in our DTC business to bring it over to B to B and share with our B to B.

Great. Good morning. Thank you for taking my questions. Um, I guess just just disperse thinking about um, the DTC business, where perhaps you have, some more granular customer data. Here's what you're seeing in terms of sort of new customer growth versus spend per customer or a frequency per customer, obviously closed toe. Penetration growth continues to be a theme here. Um, just wondering to what extent that's sandals buyers that are also buying closed toe Styles versus the closed toe bringing in new customer into the brand. Um just maybe how those Trends may be evolving. Um thanks and then I 1 quick um guidance follow-up as well.

Nico Bouillaf: This is Nico. I am going to give you some context on the DTC trading and also acquisition of new customers, but also how pleased we are with the success of expansionary categories and new categories. What we typically see, and we have been sharing that over the course of the last quarters, is that in our DTC, we have a higher share and a higher growth of so-called expansionary categories. New categories that we expose to our consumers in DTC, be it through our online shop or in our physical retail, they are faster adopted by consumers than our B2B partners. In our B2B partners, what we also do is for sure, we have the power to celebrate the full line in our DTC, whereas B2B partners typically are more safer placing the buy.

One of the styles what are the categories that are spearheading and our DTC business. We also see is whenever we open a retail store a new store.

Consumers are coming in and trending towards higher priced product. So our new stores are delivering a higher ASP more premium product.

And also more units per transaction, while our same stores as David mentioned our growing.

Double digit in there and the sales so that gives us very much confidence on expanding in DTC through our retail expansion plan that is targeted to address the physical shopping trend. While we also spare had growth in underpenetrated areas for digital specifically.

Nico Bouillaf: We use the great success in our DTC business to bring it over to B2B and share with our B2B partners what are the styles, what are the categories that are spearheading in our DTC business. What we also see is whenever we open a retail store, a new store, consumers are coming in and trending towards a higher price product. Our new stores are delivering a higher ASP, more premium product, and also more units per transaction. While our same stores, as David mentioned, are growing double digit in their sales. That gives us very much confidence on expanding in DTC through our retail expansion plan that is targeted to address the physical shopping trend, while we also spearhead growth in underpenetrated areas for digital. Specifically in regions like APAC, but also Middle East, our digital business is quite young, but expanding really fast.

In regions like APAC, but also middle East our digital business is quite young, but expanding really fast and that gives us great confidence that we are.

Quality, expanding our business on the DTC front, while we keep scarcity and the quality in our b to B business.

Excellent. Thank you for that color and then just on the margin guidance.

We're reiterating the full year, but that does imply a fairly wide range of outcomes for the fiscal fourth quarter.

Stories that we exposed to our consumers in DTC, be it um, through our online uh, um, shop or in our physical retail. They are faster adopted by consumers than our B2B partner. Um, and then in our B2B Partners, uh, what we also do is for sure. We we have the the power to celebrate the full line in our DTC. Whereas B2B Partners typically are more safer uh placing the buy. Uh but we use the great success in our DTC business to bring it over to be to be. Um and share with our B2B Partners. What are the Styles, what are the categories that are spare heading in our DTC business? What we also see is whenever we open a retail store, a new store. Um, consumers are coming in and trending towards, um, higher price product. So our new stores are delivering a higher, ASP more premium product um and uh also more units per transaction while our same stores as David mentioned are growing. Um,

Including EBITDA margin being down year over year, just wondering if you could comment on that I mean is there a scenario where you see EBITDA margin could be down or just what are the factors that you see driving kind of the low end versus the high end of that guidance range. Thank you.

Hey, mom contributor speaking.

Certainly the key point driving that is the volatility that we've seen in currency. So it's extremely hard to predict and if you see where things have developed over the course of the year.

Nico Bouillaf: That gives us great confidence that we are with quality expanding our business on the DTC front, while we keep scarcity and the quality in our B2B business.

Double digit, um, in their, in their sales. So that gives us very much confidence on uh, expanding in DTC through our, uh, retail expansion plan that is targeted to address the physical shopping, um, Trend. While we also um, spare head growth in underpenetrated areas for digital specifically in regions, like aipac, but also Middle East our. Digital business is quite young, but expanding really fast. Um, and that gives us great confidence that

We feel very comfortable with that guidance, although we can't naturally predict where the U S dollar versus the euro will trade so as such.

that we are um with quality expanding our business on the DTC front, while we keep scarcity and the quality in our B2B business

Ivica Krolo: Excellent. Thank you for that caller. Just on the margin guidance, you are reiterating the full year, but that does imply a fairly wide range of outcomes for the fiscal fourth quarter, including EBITDA margin being down year over year. Just wondering if you could comment on that. Is there a scenario where you see EBITDA margin could be down, or just what are the factors that you see driving kind of the low end versus the high end of that guidance range? Thank you.

We are.

Very comfortable again on that guidance, but there is this part of the equation, which is unknown.

Thank you.

Thank you. The next question will be from Paul <unk> from Citi. Paul Your line is live.

Excellent. Um, thank you for that caller and then just on the margin guidance, um, reiterating the full year, um, but that that does imply, a fairly wide range of outcomes for the fiscal fourth quarter. Um, including IBA margin being down year-over-year. Just wondering if you could comment on that. I mean, is there a scenario where you see, I margin could be down or just what are the factors that that you see driving kind of the low end versus the high end of that guidance range. Thank you.

Hey, Thanks, Scott you gave some color on DTC business within EMEA.

Nico Bouillaf: Hey, Mark, it's Ivica speaking. Certainly, the key point driving that is the volatility that we have seen in the currency. It's extremely hard to predict. If you see where things have developed over the course of the year, we feel very comfortable with that guidance, although we can't naturally predict where the U.S. dollar versus the euro will trade. As such, we feel very comfortable again on that guidance, but there is this part of the equation which is unknown.

I think slower start and then it accelerated can you give some.

Some color about what you saw in the other regions within the DTC business throughout the quarter, whether or not it's an acceleration or deceleration and then separate.

Yes.

Can you talk about what does sell through look like within <unk> and how that compares to what you are seeing DTC in each region.

Hey, Mark and see if it's a speaking. Uh, I mean, certainly um, the key Point driving, that is the volatility that we have seen in in currency. Um, so it's extremely hard to predict and if you see where things have developed over the course of the year, um, we feel, um, very comfortable with that guidance, although we can't naturally predict where, um, the US dollar versus the Euro will trade. So, um, as such, um, we are, uh, feel very comfortable again on that guidance, but there is this part of the equation, which is unknown.

Ivica Krolo: Thank you.

Hey, this is Nicole so we've shared the sell throughs at our B to B partners are significantly up and so all the way up to 25% in Americas, 20%.

Thank you.

Megan Kulick: Thank you. The next question will be from Paul Lajoie from Citi. Paul, your line is live.

Thank you. The next question will be from Paul from City, Paul. Your line is live?

David Kahn: Hey, thanks guys. You gave some color on the DTC business within EMEA. I think slower start and then it accelerated. Can you give us some color about what you saw in the other regions within the DTC business throughout the quarter, whether or not you saw an acceleration or deceleration? Then separate, I am sorry if I missed this, but can you talk about what your sell-throughs look like within B2B and how that compares to what you are seeing DTC in each region? Thanks.

In EMEA, so that gives us a pretty immediate demand signal as also reorders have been substantially increasing I think we could and the two big regions I'm sitting next to David here, we could see that the summer started a bit softer. So April may Cayman in our DTC business a bit softer than expected.

And that was a market wide I'd say phenomenon and then as I shared June was a complete reversal of that trend. So it was really record sales.

At the same level I would say in our DTC business in stores same stores went up significantly new stores from day, one performed really well, while our b to B partners also push sell through at record rates. So we are quite happy to see this in the current market environment, where the market is mostly.

Hey, thanks, guys. Um, you gave some color on the DPC business within EMIA. Uh, I think it had a slower start and then it accelerated. Can you give uh some color about what you saw in the other regions within the DTC business throughout the quarter, whether or not you saw an acceleration or deceleration? And then, separate—sorry if I missed this—but can you talk about what your sell-throughs look like within B2B and how that compares to what you're seeing in DTC in each region? Thanks.

Nico Bouillaf: Hey, this is Nico. We've shared sell-throughs at our B2B partners are significantly up, all the way up to 25% in Americas and 20% in EMEA. That gives us a pretty immediate demand signal as reorders have been substantially increasing. I think we could, in the two big regions, I'm sitting next to David here, we could see that the summer started a bit softer. April, May came in in our DTC business a bit softer than expected. That was a market-wide, I'd say, phenomenon. Then, as I shared, June was a complete reversal of that trend. It was really record sales at the same level, I would say, in our DTC business in stores. Same stores went up significantly. New stores from day one performed really well, while our B2B partners also pushed sell-through at record rates.

Flat to negative so we continue as I've said to be the brand of choice for consumers that are making choices.

The choices that are impacted by a lot of uncertainty currently so our brand team is definitely on broken.

And with those comments related to India or did you see that acceleration and all in all markets in June.

That is all markets, so thats not just EMEA.

Hey, this is Nico. Um so we've shared a sell through uh at our B2B Partners, our significantly up um so all the way up to 25% in America and 20% um in EMA so that gives us a pretty immediate demand signal as also reorders. Have been substantially increasing. I I think we could in the 2 big regions. I'm sitting next to David here. We could see that. Um, the summer, um, started a bit softer, so April May came in, uh, in our DTC business. A bit softer than expected and that was a market wide. I'd say phenomenon, and then as I shared June was a

Got it thank you.

Thank you. The next question will be from Peter Mcgoldrick from Stifel. Peter Your line is live.

Hi, Thanks for taking my question I'm curious on the closed toe penetration up 400 bps in the June quarter, which is the seasonally smaller quarter for these products can you help us think about the closed toe rate of growth in the September quarter, and how that builds as we look into fiscal 'twenty six.

Nico Bouillaf: We are quite happy to see this in the current market environment where the market is mostly flat to negative. We continue, as I said, to be the brand of choice for our consumers that are making tougher choices, and that are impacted by a lot of uncertainty currently. Our brand heat is definitely unbroken.

Okay.

So yes, the cynical again close to or continued to outpace op until while op until shows a very robust growth.

Speed is definitely Unbroken.

David Kahn: Were those comments related to EMEA, or did you see that acceleration in all markets in June?

We are also very pleased to see that non Boston stylists grow at the same pace as Boston. So it's not just the.

And were those comments related to EMIA? Or did you see that acceleration in all markets in June?

Nico Bouillaf: That is all markets, so that is not just EMEA.

That is all markets. So that's not just in here.

David Kahn: Got it. Thank you. Good luck.

One horse race.

Now you might have seen we are completely sold out on Naples wrapped we saw an organic tick tock celebration.

Got it. Thank you. Good luck.

Megan Kulick: Thank you. The next question will be from Peter McGoldrick from Stifel. Peter, your line is live.

Ivica Krolo: Hi, thanks for taking my question. I'm curious on the closed-toe penetration up 400 bps in the June quarter, which is the seasonally smaller quarter for these products. Could you help us think about the closed-toe rate of growth in the September quarter and how this builds as we look into fiscal 2026? Thank you.

That.

Thank you. The next question will be from Peter, McGoldrick, from stifel Peter. Your line is live.

Naples Rep style among youth audiences. We are currently replenishing and coming back early September with Naples Rep. I'd also like to mention that Tokyo and literally are really performing well. So it's again not just a boston raise it's really a very diversified business and consumers enjoying that.

Hi, thanks for taking my question. I'm curious about the closed-toe penetration of 400 bits in the June quarter, which is the seasonally smaller quarter for these products. Could you help us think about the closed-toe rate of growth in the September quarter and how this builds as we look into Fiscal 26? Thank you.

Business.

Nico Bouillaf: So yes, this Nico again, closed-toe continued to outpace open-toe, while open-toe shows a very robust growth. We are also very pleased to see that non-Boston styles grow at the same pace as Boston. It is not just a one-horse race. Just now, you might have seen we are completely sold out on Naples Wrapped. We saw an organic TikTok celebration that made Naples Wrapped this style among youth audiences. We are currently replenishing and coming back early September with Naples Wrapped. I would also like to mention that Tokyo and Lutry are really performing well. So it is, again, not just a Boston race. It is really a very diversified business and consumers are enjoying that business. Where that share of business can grow, we shared, I believe, something around 30%. But it can grow stronger. So we are not at the ceiling yet with closed-toe.

Where that shelf business can grow we shared I believe something around 30%, but it can grow stronger. So we are not at the ceiling, yet with coastal and typically in.

The autumn season, close Tau is growing faster than open toe, even further but I would also like to mention that open toe is showing a very robust growth. So it is not at the expense of open toll.

Thank you.

And the next question will be from Luca <unk> from Bernstein.

Your line is live.

Um, so yes, uh, this Nico again close to a continued to outpace. Um, open toe while open toe shows a very robust growth. Um, uh, we're also very pleased to see that non Boston Styles grow at the same Pace, um, as Boston. So it's not just a um, 1 horse race. Um, just now, uh, you might have seen we are completely sold out on Naples W, um, we saw an organic Tik Tok celebration, um, that um, made Naples wrapped this style among youth audiences. We are currently replenishing. And coming back, uh, early September with with Naples wrapped but also like to mention that Tokyo and lutri are really performing. Well,

Okay.

Yes. Thank you for taking my question, maybe a different question trying to ferret out what.

<unk> been doing and what you're planning to do in order to maintain or increase brand momentum.

And how you are planning to support brand equity in terms of marketing initiatives collaborations.

Nico Bouillaf: Typically in the autumn season, closed-toe is growing faster than open-toe even further. I would also like to mention that open-toe is showing a very robust growth. So it is not at the expense of open-toe.

Communication social media events Activations anything that you have.

On the marketing side would be very useful thank you very much.

Hi, Luca this is Oliver Thank you for your question.

Uh, so it's again, not just a, a Boston race. It's really, um, a very diver Diversified business, and consumers are enjoying that business, um, where that, uh, share of business can grow. Uh, we shared, uh, I believe something around 30%. Um, but um, it can go stronger. So we are not at the ceiling yet with closed toe and typically in, uh, the, the Autumn season close to is uh is growing faster than open to even further. But I'd also like to mention that open toe is showing a very robust growth, so it's not at the expense of open toe.

No. We are a purpose driven brand so constantly introduce the functionality and the purpose of the brand to new audiences.

Megan Kulick: Thank you. The next question will be from Luca Solca from Bernstein. Luca, your line is live.

Thank you.

This will be especially to see in our in person shopping.

And the next question will be from Luca Sulka from Bernstein.

Look at your line of life.

Talked about the <unk> D to C.

David Kahn: Yes, thank you for taking my question. Maybe a different question, trying to ferret out what you have been doing and what you are planning to do in order to maintain or increase brand momentum and how you are planning to support brand equity in terms of marketing initiatives, collaborations, communication, social media events, activations, anything that you have planned on the marketing side would be very useful. Thank you very much.

<unk>.

It is very strong.

<unk> for this kind of in for treatment is very very strong in the APAC region. It's also strong in the upcoming market in EMEA and it's constantly strong.

In the U S and then Latin America as well, so we as a brand.

Functionality, which is not or maybe it's even the core of any marketing activity, but just not you know printing.

Yes, thank you for taking my question. Uh, maybe a different question to trying to figure it out, what you've been doing and what you're planning to do in order to maintain or increase brand momentum, and how you are planning to support brand equity, in terms of marketing initiatives, collaborations, uh, communication, social media events, activations, anything that you have planned on the marketing side would be uh very useful. Thank you very much.

Oliver Reichert: Hey Luca, this is Oliver. Thank you for your question. As you know, we are a purpose-driven brand. We constantly introduce the functionality and the purpose of the brand to new audiences. That's what we especially see in our in-person shopping. We just talked about the B2B, DTC thing. It is very strong and the demand for this kind of info treatment is very, very strong in the APAC region. It's also strong in the upcoming markets in EMEA and it's constantly strong in the US and in Latin America as well. We as a brand communicate about our functionality, which is not, or maybe it's even the core of any marketing activity, but just not, you know, printing sizable pictures and make them very big and spend a hell of money for it.

Pictures.

Make them very big in.

Spend a hell lot of money for it so it is the key.

Core Foundation groundwork, what we're doing every day to convince people to try the foot beds and come back.

And the.

The second third and the 10th pair so.

Nothing really special but very broad based.

As you can see unethical imagine when you have such a huge collection and youre globally relevant and you have this.

Growth in every channel in every product category.

City and in every territory you're in it is a very very big Big MMO. So what we're doing what we're doing is something thats really.

Important for the people, we think and don't forget 70, 74 hour vehicle from Paris, where we are.

Oliver Reichert: It is the core foundation groundwork, what we're doing every day to convince people to try the footbed and come back and buy the second, the third, and the 10th pair. Nothing really special, but very broad-based because as you can see and as you can imagine, if you have such a huge collection and you're globally relevant and you have this growth in every channel, in every product category, in every city, and in every territory you're in, it is a very, very big, big animal. What we're doing is something that's really important for the people, we think. Don't forget 7074, our vehicle from Paris, where we are, you know, together with other artists and creatives create a luxury-driven line to promote the silhouettes and the different executions to very hard-to-find new audiences.

Together with other artists and creators to create.

Hey, Luca, this is Oliver. Thank you for your question. Um, as you know, um, we have a purpose-driven brand, so we constantly uh introduce um, the functionality and the purpose of the brand to a new audiences. Um, that's what we especially see in our in-person shopping. Um, we just talked about the B2B DTC, uh, thing. Um, it is, it is very strong and it's the demand for this kind of. Um, info treatment is very, very strong in the Apec region. It's also strong in the upcoming, uh, markets in in Mia and it's, um, constantly strong on the on, in the US and in Latin America as well. So we as a brand we communicate about our functionality, which is not, uh, or maybe it's even the core of any marketing activity, but just not, you know, printing, um, reliable pictures and uh, make them very big and and and spend a hell of money for it. So it is the core Foundation groundwork

Luxury driven.

Lying to promote the silhouettes and the different executions to very hard to find new audiences and but thats just like that.

Work what we're doing every day to convince people to try the foot bed and come back. Um and by um the second the third and the 10th pair. So um,

Probably the most obvious.

Marketing activity you may count from your perspective as marketing activity.

The brutal truth is we are on this groundwork every single day all of us.

Getting people thinking about the feedback try it and that's that's the mission give everybody the access to the footprint.

Understood. Thank you very much.

Youre welcome.

Thank you. This does conclude today's Q&A session and also concludes today's conference you may now disconnect. Your lines. Thank you for your participation.

Oliver Reichert: That's just like, you know, probably the most obvious marketing activity you may count from your perspective as a marketing activity. The brutal truth is we're on this groundwork every single day, all of us, meeting people, talking about the footbed, try it, and that's the mission. Give everybody access to the footbed.

The the Silhouettes and the different executions to very hard to find new audiences. And um, but that's just like, you know, the the probably the most obvious uh uh, marketing activity. You you may count from your perspective as a marketing activity

David Kahn: Understood. Thank you very much.

Um, the brutal truth is we're on this groundwork every single day. All of us meeting people talking about the foot bed, try it. And that's that's the mission. Give everybody access to the foot bed.

Oliver Reichert: You're welcome.

Understood, thank you very much.

Megan Kulick: Thank you. This does conclude today's Q&A session, and it also concludes today's conference. You may now disconnect your lines. Thank you for your participation.

You're welcome.

Thank you. This does conclude today's Q&A session and it also concludes today's conference. You may now disconnect your lines. Thank you for your participation.