Q4 2025 Birkenstock Holding PLC Earnings Call

December 18, 2025

Speaker #1: meeting. Good morning.

Speaker #2: And thank you for standing by. Welcome to the Birkenstock fourth quarter and fiscal 2025 earnings conference call. At this time, all participants are in listen-only mode.

Speaker #2: Following the presentation, we will conduct a question-and-answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star 9 to unmute.

Speaker #2: The company, your hand, and star 6 have allocated 60 minutes in total for this conference call. I would like to remind everyone that this conference call is being recorded.

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

Operator: I now turn the call over to Megan Kulick, Director of Investor Relations.

I now turn the call over to Megan Kulick, Director of Investor Relations.

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. Niko Bouyakhf, President of EMEA, Klaus Baumann, Chief Sales Officer, and Alexander Hoff, Vice President of Global Finance, will join us for the Q&A. Today, we are reporting the results for our fiscal fourth quarter and full year ended 30 September 2025. You may find the press release and supplemental presentation connected to today's discussion on our investor relations website at birkenstock-holding.com. The company's annual report for the year ended 30 September 2025 on Form 20-F has been filed with the United States Securities and Exchange Commission and has also been posted to our website.

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. Nico Bouyakhf, President of EMEA, Klaus Baumann, Chief Sales Officer, and Alexander Hoff, Vice President of Global Finance, will join us for the Q&A. Today, we are reporting the results for our fiscal fourth quarter and full year ended 30 September 2025. You may find the press release and supplemental presentation connected to today's discussion on our investor relations website at birkenstock-holding.com. The company's annual report for the year ended 30 September 2025 on Form 20-F has been filed with the United States Securities and Exchange Commission and has also been posted to our website.

Speaker #3: Boyoff, President of EMEA; Nico Klaus Baumann, Chief Sales Officer; and Alexander Hoff, Vice President of Global Finance, will join us for the Q&A. Today, we are reporting the results for our fiscal fourth quarter and full year ended September 30, 2025.

Speaker #3: The release and supplemental presentation connected to today's discussion may be found on our investor relations website at birkenstock-holding.com. The company's annual report for the year ended September 30, 2025, on Form 20-F, has been filed with the United States Securities and Exchange Commission and has also been posted to our website.

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

Megan Kulick: We would like to remind you that some of the information provided during today's call is forward-looking and, accordingly, is subject to the safe harbor provisions of federal securities laws. 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, which 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.

We would like to remind you that some of the information provided during today's call is forward-looking and, accordingly, is subject to the safe harbor provisions of federal securities laws. 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, which 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.

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, which can be found on our website at birkenstock-holding.com.

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.

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.

Megan Kulick: 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. With that, I'm going to turn it over to Oliver.

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. With that, I'm going to turn it over to Oliver.

Speaker #3: Reconciliations of IFRS to non-IFRS measures can be found in this morning's press release and in our SEC filings. With that, I'm going to turn it over to Oliver.

Speaker #4: Good morning, everybody, and thank you for joining us today. As we enter year three as a public company, I would like to spend a few moments to highlight our accomplishments since our IPO in 2023.

Oliver Reichert: Good morning, everybody, and thank you for joining us today. As we enter year three as a public company, I would like to spend a few moments to highlight our accomplishments since our IPO in 2023. We have delivered strong double-digit top line growth in Constant Currency and generated a consistent 30% plus EBITDA margin without compromising on our disciplined Engineered Distribution. We made significant progress in unlocking our white space potentials. We deepened our retail footprint and doubled our own store fleet to 97 stores. We have grown our APAC business at an average rate of 36% per year, and we have significantly increased the closed-toe share of business by 10 percentage points to 38%. We generated significant cash flow, allowing us to deleverage from 3.3 times to 1.5 times while investing over EUR 150 million into our production capacity and buying back $200 million in shares.

Speaker #4: We have delivered strong double-digit top-line growth in constant currency and generated a consistent 30%+ EBITDA margin without compromising on our disciplined, engineered distribution.

Speaker #4: We made significant progress in unlocking our whitespace potentials. We deepened our retail footprint and doubled our own store fleet to 97 stores. We have grown at a rate of 36% per year.

Speaker #4: And we have significantly increased closed-store share of business by 10 percentage points to 38%. We generated significant cash flow allowing us to de-level from 3.3 times to 1.5 times, while investing over €150 million into our production capacity and buying back $200 million in shares.

Oliver Reichert: We achieved all this in an environment of fundamental changes in global tariffs and international trade, a war in Ukraine, an energy crisis, and a significant decline in the US dollar. Even for a brand like ours, with a history spanning two and a half centuries, these are unusual times. As our results show, we have navigated them consistently and successfully. Our brand delivers growth for 250 years. Our performance during these unusual times proved the resilience of our beloved brand. Our healthy brand momentum continued in the fourth quarter. We are very proud to report strong results for our fiscal year 2025, which came in ahead of our guidance. We delivered full-year revenue growth of 18% in constant currency, above the 15% to 17% range we provided at the beginning of the year. We reached EUR 2.1 billion in revenue, the best year in our history.

We achieved all this in an environment of fundamental changes in global tariffs and international trade, a war in Ukraine, an energy crisis, and a significant decline in the US dollar. Even for a brand like ours, with a history spanning two and a half centuries, these are unusual times. As our results show, we have navigated them consistently and successfully. Our brand delivers growth for 250 years. Our performance during these unusual times proved the resilience of our beloved brand. Our healthy brand momentum continued in the fourth quarter. We are very proud to report strong results for our fiscal year 2025, which came in ahead of our guidance. We delivered full-year revenue growth of 18% in constant currency, above the 15% to 17% range we provided at the beginning of the year. We reached EUR 2.1 billion in revenue, the best year in our history.

Speaker #4: This is an environmental phase. We achieved all fundamental changes in global tariffs and international trade. A war in Ukraine, an energy crisis, and a significant decline in the US dollar.

Speaker #4: Even for a brand like ours, with a history spanning two and a half centuries, these are unusual times. As our results show, we have navigated them consistently and successfully.

Speaker #4: Our brand delivers growth since 250 years. Our performance during these unusual times proved the resilience of our beloved brand. Our healthy brand momentum continued in the fourth quarter.

Speaker #4: We are very proud to report strong results for our fiscal year 2025, which came in ahead of our guidance. We delivered full-year revenue growth of 18% in constant currency, above the 15% to 17% range we provided at the beginning of the year.

Speaker #4: We reached €2.1 billion in revenue—the best year in our history. We grew double digits in every segment and channel, and we improved profitability.

Oliver Reichert: We grew double digits in every segment and channel, and we improved profitability. Gross margin was up 30 basis points to 59.1%. Adjusted EBITDA margin was up 100 basis points to 31.8%, meeting the high end of our target. Most importantly, we accomplished this in the face of significant tariff and currency pressures. Demand for our brand remains very strong across all segments, categories, and channels. We sold over 38 million pairs in fiscal 2025, up over 12%. ASP was up 5% in constant currency, supported by targeted price actions and a higher share of premium products such as closed-toe shoes and leather executions. We are winning in both B2B and D2C, gaining shelf space and taking share. Birkenstock had a very strong back-to-school season, with retail sales at our top 10 partners increasing over 20% year over year.

We grew double digits in every segment and channel, and we improved profitability. Gross margin was up 30 basis points to 59.1%. Adjusted EBITDA margin was up 100 basis points to 31.8%, meeting the high end of our target. Most importantly, we accomplished this in the face of significant tariff and currency pressures. Demand for our brand remains very strong across all segments, categories, and channels. We sold over 38 million pairs in fiscal 2025, up over 12%. ASP was up 5% in constant currency, supported by targeted price actions and a higher share of premium products such as closed-toe shoes and leather executions. We are winning in both B2B and D2C, gaining shelf space and taking share. Birkenstock had a very strong back-to-school season, with retail sales at our top 10 partners increasing over 20% year over year.

Speaker #4: Gross margin was up 30 basis points to 59.1%, and adjusted EBITDA margin was up 100 basis points to 31.8%, meeting the high end of our target.

Speaker #4: Importantly, we accomplished this in most of the phase of significant tariff and currency pressures. Demand for our brand remains very strong, across all segments, categories, and channels.

Speaker #4: We sold over 38 million pairs in fiscal '25, up

Speaker #1: Actions and targeted price share premium of products—the higher closed toe A executions leather—are winning in both B2B and B2C, gaining shelf space and taking share.

Speaker #1: Birkenstock had strong B2C school season, with to top our increasing sales at over retail over 20% year back. Importantly, we see a ten partners of this.

Speaker #1: Momentum year during the important holiday season. And over 90% of the growth in B2B came from within existing doors. We remain relative, maintaining scarcity and managing tightly our committed distribution growth.

Oliver Reichert: Importantly, we see a continuation of this momentum during the important holiday season, and over 90% of the growth in B2B came from within existing doors. We remain committed to maintaining relative scarcity and managing tightly our distribution growth. Full price realization, the ultimate indicator for brand health and demand, remains over 90%. This shows incredible brand strength in a market faced with significant discounting by others. We delivered as promised in fiscal 2025 in our white space growth opportunities. In owned retail, we added 30 new stores, ending the year with 97 stores and more than doubling our own store fleet since the IPO. The new stores are performing ahead of our expectations in terms of productivity and return on capital. We plan to open about 40 new stores in 2026, putting us well on track to reach our 150-store target ahead of schedule.

Importantly, we see a continuation of this momentum during the important holiday season, and over 90% of the growth in B2B came from within existing doors. We remain committed to maintaining relative scarcity and managing tightly our distribution growth. Full price realization, the ultimate indicator for brand health and demand, remains over 90%. This shows incredible brand strength in a market faced with significant discounting by others. We delivered as promised in fiscal 2025 in our white space growth opportunities. In owned retail, we added 30 new stores, ending the year with 97 stores and more than doubling our own store fleet since the IPO. The new stores are performing ahead of our expectations in terms of productivity and return on capital. We plan to open about 40 new stores in 2026, putting us well on track to reach our 150-store target ahead of schedule.

Speaker #1: Price full realization. The ultimate indicator for brand health and demand remains 90%. This, over incredible brand, shows strength in the market.

Speaker #1: Faced with significant discounting by others , we delivered as promised in fiscal 2025 , white in our growth opportunities in retail , we added own stores 30 new , ending the year with 97 stores and more than doubling our own store fleet since the IPO .

Speaker #1: The new stores are performing ahead of our expectations in terms of productivity and return of CapEx. We plan to open about 40 new stores in 2026, putting us well on track to reach our 150 store target.

Speaker #1: Target schedule . This allow us to will more capture ahead of demand and younger shoppers within our own DTC business , and us to showcase the allows range collection of our our share of revenue close to increased by 500 basis points year over year to reach 38% for the year .

Oliver Reichert: This will allow us to capture more in-person shopping demand and younger shoppers within our own D2C business and allows us to showcase the full range of our collection. Closed-toe share of revenue increased by 500 basis points year over year to reach 38% for the year, supporting continued ASP growth. Ten of our top 20 silhouettes in 2025 were closed-toe. The Boston, a category-defining hero silhouette, which turns 50 years in 2026, continues to lead the clog category, a category like sandals we believe we own. At the same time, non-Boston closed-toe silhouettes grew over 30%. Finally, our third wide space, APAC, grew 34% in constant currency, approximately double the pace of the more mature markets. APAC increased to 11% share of global revenue, and the APAC segment has the highest ASP. We expect to continue to steer APAC growth at double the speed of the other segments.

This will allow us to capture more in-person shopping demand and younger shoppers within our own D2C business and allows us to showcase the full range of our collection. Closed-toe share of revenue increased by 500 basis points year over year to reach 38% for the year, supporting continued ASP growth. Ten of our top 20 silhouettes in 2025 were closed-toe. The Boston, a category-defining hero silhouette, which turns 50 years in 2026, continues to lead the clog category, a category like sandals we believe we own. At the same time, non-Boston closed-toe silhouettes grew over 30%. Finally, our third wide space, APAC, grew 34% in constant currency, approximately double the pace of the more mature markets. APAC increased to 11% share of global revenue, and the APAC segment has the highest ASP. We expect to continue to steer APAC growth at double the speed of the other segments.

Speaker #1: Supporting continued ASP growth . Ten of our top silhouettes in 20 25 were closed to the Boston A category defining hero silhouette , which turns 50 years in 26 , continues lead the clock category like to , a sandals .

Speaker #1: We believe we own . At the same time , non Boston closed , grew over 30% . Finally , our third whitespace APAC grew 34% in constant , approximately currency pace of the more mature APAC markets .

Speaker #1: Increased to an 11% share of global revenue, and the APAC segment has the highest ASP. We expect to continue to steer APAC growth at double the speed of the other segments.

Speaker #1: Our growth is only limited in production by our capacity and disciplined distribution. As we, like many others did, saw a brand's continued shift toward in-person shopping, especially in the important Gen Z group.

Oliver Reichert: Our growth is only limited by our production capacity and disciplined distribution. We, as many other brands did, saw a continued shift toward in-person shopping, especially in the important Gen Z group. This consumer most often shops in a multi-brand curated retail environment, which is supported by our B2B channel. We are a consumer-centric brand in its core meaning. Our desire is to be where the customer is, reach first-time users who need to touch and feel the product, and transform them into brand fans for a lifetime. This strong wholesale growth, driven by the younger demographic, which we expect to continue, requires us to produce more pairs in a situation where we are already capacity constrained. At the same time, the strongest demand we see is for our premium executions, which require even more production minutes.

Our growth is only limited by our production capacity and disciplined distribution. We, as many other brands did, saw a continued shift toward in-person shopping, especially in the important Gen Z group. This consumer most often shops in a multi-brand curated retail environment, which is supported by our B2B channel. We are a consumer-centric brand in its core meaning. Our desire is to be where the customer is, reach first-time users who need to touch and feel the product, and transform them into brand fans for a lifetime. This strong wholesale growth, driven by the younger demographic, which we expect to continue, requires us to produce more pairs in a situation where we are already capacity constrained. At the same time, the strongest demand we see is for our premium executions, which require even more production minutes.

Speaker #1: This consumer most shops in often the multi-brand , curated retail environment , which is by supported B2B our by our channel . We are a consumer centric brand in its core , meaning our desire is to be where the customer is , reach first time users who need to touch and feel the product and transform them into brand fans for a lifetime .

Speaker #1: This strong wholesale growth , driven by younger the demographic , which we expect to continue , requires us to produce more pairs in a situation where we are already capacity constrained .

Speaker #1: At the same time, at the strongest demand, we see our premium is for executions, which require even more production methods. The combination of more wholesale and premium, more execution, is creating additional pressure on our vertically integrated supply chain.

Oliver Reichert: The combination of more wholesale and more premium execution is creating additional pressure on our vertically integrated supply chain. We need to manage growth in our production responsibly. This is why we are steering towards a mid-teens pace of growth for fiscal 2026. I will now turn it over to Ivica to discuss our financial results and outlook for 2026 in more detail.

The combination of more wholesale and more premium execution is creating additional pressure on our vertically integrated supply chain. We need to manage growth in our production responsibly. This is why we are steering towards a mid-teens pace of growth for fiscal 2026. I will now turn it over to Ivica to discuss our financial results and outlook for 2026 in more detail.

Speaker #1: We manage growth in our production responsibly. This is why we are steering towards a mid-teens pace of growth for fiscal '26.

Speaker #1: I will now turn it over to Ivica to discuss our results and for Q4. In outlook, more financials. Thanks. Oliver.

Speaker #1: I'm happy to report to you Birkenstock's performance for the fourth quarter and year 2025, which exceeded our targets. We achieved this in face of significant headwind from FX on our reported numbers.

Ivica Krolo: Thanks, Oliver. I'm happy to share with you Birkenstock's performance for the fourth quarter and the fiscal year 2025, which exceeded our targets. We achieved this in the face of significant headwind from FX on our reported numbers. We closed the year with a strong fourth quarter with revenues of EUR 526 million, growth of 20% in constant currency. Reported revenue growth was over 15% due to the historically strong depreciation of the US dollar compared to the fourth quarter of 2024, which caused a 420 basis points drag to revenue growth in the quarter. This brought the full-year revenues to EUR 2.1 billion, up 18% in constant currency, exceeding the high end of our guidance of 15% to 17%. We saw strong growth across all segments in fiscal 2025. The Americas segment was up 18% in constant currency. EMEA was up 14%, and APAC up 34% in constant currency.

Speaker #1: We closed the year with a strong quarter with revenues of 526 million . Growth of 20% in constant currency . revenue Reported growth was over 15% due to the historically strong depreciation of the US dollar compared to the fourth quarter of which caused 24 , a 420 basis points .

Speaker #1: to drag revenue growth in the quarter. This brought the full year revenues to $2.1 billion, up 18% in constant currency, exceeding the high end of our guidance. We saw strong growth across all segments in the 15 to 17% range.

Speaker #1: For fiscal 2025, the segment Americas was up 18% in constant currency. EMEA was up 14%, and APAC was up 34% in constant currency.

Speaker #1: Buy channel for the year, B2B was up 21% and B2C up 12% in constant currency. As also mentioned, we see sustained strength in our B2B channel. Share of business B2B in channel was 62%, up from about 60% in fiscal 2020.

Ivica Krolo: By channel for the year, B2B was up 21% and D2C up 12% in constant currency. As Oliver mentioned, we see sustained strength in our B2B channel. Share of business in the B2B channel was about 62%, up from 60% in fiscal 2024. Gross profit margin for the fourth quarter was 58.1%, down 90 basis points year over year. Like-for-like margins, excluding 120 basis points of pressure from FX, and 100 basis points of pressure from incremental US tariffs, were up 130 basis points to 60.3%. For the fiscal year, gross margin improved 30 basis points to 59.1%. Like-for-like margin, excluding FX, and tariff impacts, was up 90 basis points to 59.7%, close to our long-term target of 60%. Selling and distribution expenses were €156 million in the fourth quarter, representing 29.7% of revenue. This was down 130 basis points from the prior year.

By channel for the year, B2B was up 21% and D2C up 12% in constant currency. As Oliver mentioned, we see sustained strength in our B2B channel. Share of business in the B2B channel was about 62%, up from 60% in fiscal 2024. Gross profit margin for the fourth quarter was 58.1%, down 90 basis points year over year. Like-for-like margins, excluding 120 basis points of pressure from FX, and 100 basis points of pressure from incremental US tariffs, were up 130 basis points to 60.3%. For the fiscal year, gross margin improved 30 basis points to 59.1%. Like-for-like margin, excluding FX, and tariff impacts, was up 90 basis points to 59.7%, close to our long-term target of 60%. Selling and distribution expenses were €156 million in the fourth quarter, representing 29.7% of revenue. This was down 130 basis points from the prior year.

Speaker #1: For gross profit for the margin fourth quarter was 58.1% , down 90 basis points year over year . Like for margins like excluding 120 basis points of pressure from FX and 100 basis points of pressure from incremental US tariffs were up 130 basis points to 60.3% for the fiscal year .

Speaker #1: Gross improved margin 30 basis to points 59.1% . Like for like margin , excluding effects and tariff impacts , was up 90 basis points to 59.7% , close to our long term target of 60% .

Speaker #1: Selling and distribution expenses were $156 million in the fourth quarter, representing 29.7% of revenue. This was down 130 basis points from the prior year.

Speaker #1: For the full selling year, selling and distribution expenses totaled €564 million, or 26.9% of revenue, down 28 basis points from fiscal 2020.

Ivica Krolo: For the full year, selling and distribution expenses totaled €564 million, or 26.9% of revenue, down from 28% in fiscal 2024, mainly due to a higher B2B share year over year and the reclassification of some expenses into G&A previously recorded in S&D. Adjusted general and administrative expenses were €35 million, or 6.7% of revenue in the quarter, down 30 basis points versus prior year. Full year adjusted G&A totaled €123 million, or 5.9% of revenue, up 30 basis points from fiscal 2024, mainly due to the reclassification. Adjusted EBITDA in the fourth quarter of €147 million was up 17% year over year. Adjusted EBITDA margin of 27.8% was up 40 basis points year over year. Excluding FX and tariff impacts, adjusted EBITDA margin was up 280 basis points to 30.2%. For the full year 2025, adjusted EBITDA was €667 million, up 20% year over year.

For the full year, selling and distribution expenses totaled €564 million, or 26.9% of revenue, down from 28% in fiscal 2024, mainly due to a higher B2B share year over year and the reclassification of some expenses into G&A previously recorded in S&D. Adjusted general and administrative expenses were €35 million, or 6.7% of revenue in the quarter, down 30 basis points versus prior year. Full year adjusted G&A totaled €123 million, or 5.9% of revenue, up 30 basis points from fiscal 2024, mainly due to the reclassification. Adjusted EBITDA in the fourth quarter of €147 million was up 17% year over year. Adjusted EBITDA margin of 27.8% was up 40 basis points year over year. Excluding FX and tariff impacts, adjusted EBITDA margin was up 280 basis points to 30.2%. For the full year 2025, adjusted EBITDA was €667 million, up 20% year over year.

Speaker #1: Mainly due to a higher year-over-year B2B share and the reclassification of some expenses into G&A that were previously recorded in general and SMD administration, adjusted expenses were $35 million, or 6.7% of revenue in the quarter, down 30 basis points versus the prior year.

Speaker #1: Full year adjusted DNA totaled $123 million, or 5.9% of revenue, up 30 basis points from fiscal Q4, mainly due to the 2020.

Speaker #1: Reclassification. Adjusted EBITDA in the fourth quarter of $147 million was up 17% year over year. Adjusted EBITDA margin of 27.8% was up 40 basis points year over year.

Speaker #1: Excluding FX and tariff impacts, adjusted EBITDA margin was up 280 basis points to 30.2% for the full year 2025. Adjusted EBITDA was $667 million, up 20% year over year.

Speaker #1: Full year margin of 31.8% was up points year over year, high hit at the end of 100 basis, our targeted and range, which we increased after the second quarter.

Ivica Krolo: Full year margin of 31.8% was up 100 basis points year over year and hit the high end of our targeted range, which we increased after the second quarter. Adjusted EBITDA margin for fiscal 25, excluding FX and tariff impacts, was 32.5%, up 170 basis points. Adjusted net profit of €94 million in the fourth quarter was up 71% year over year. Adjusted EPS for the fourth quarter was €0.51, up 76% from €0.29 a year ago. For the fiscal year, adjusted net profit of €346 million was up 44%, and EPS of €1.85 were up 45% from fiscal 24, driven by strong operational performance, lower interest payments, and a lower effective tax rate. Cash flows from operating activities remained strong at €384 million for the fiscal year, down 12% from fiscal 2024, mainly due to the timing of tax payments.

Full year margin of 31.8% was up 100 basis points year over year and hit the high end of our targeted range, which we increased after the second quarter. Adjusted EBITDA margin for fiscal 25, excluding FX and tariff impacts, was 32.5%, up 170 basis points. Adjusted net profit of €94 million in the fourth quarter was up 71% year over year. Adjusted EPS for the fourth quarter was €0.51, up 76% from €0.29 a year ago. For the fiscal year, adjusted net profit of €346 million was up 44%, and EPS of €1.85 were up 45% from fiscal 24, driven by strong operational performance, lower interest payments, and a lower effective tax rate. Cash flows from operating activities remained strong at €384 million for the fiscal year, down 12% from fiscal 2024, mainly due to the timing of tax payments.

Speaker #1: Adjusted EBITDA margin for fiscal 25, excluding FX and tariff impacts, was up 170 basis points to 32.5%. Adjusted net profit for the fourth quarter was $94 million, up over 71% year over year.

Speaker #1: EPs Adjusted was up the fourth quarter for was $0.51 , up 76% from $0.29 a year ago the fiscal . year , adjusted net For profit of 346 million was up 44% and EPs of €1.85 were 45% from up fiscal 24 , driven by strong operational performance , interest payments and a lower effective tax rate lower .

Speaker #1: Cash operating flows remained strong at $384 million for the fiscal year, down 12% from fiscal 2020, mainly due to the timing of tax payments.

Speaker #1: We ended the year with cash and cash equivalents Four , of 329 million . After the repurchase of 3.9 million shares totaling 176 million and the partial early repayment of the US dollar , loan term of 50 million US dollar in September , our inventory to sales ratio declined to 34% for the year , from 35% in the year 2020 .

Ivica Krolo: We ended the year with cash and cash equivalents of €329 million after the repurchase of 3.9 million shares, totaling €176 million, and the partial early repayment of the US dollar term loan of $50 million in September. Our inventory to sales ratio declined to 34% for the year from 35% in the fiscal year 2024. Our DSO for the year were healthy 28 days, up from 23 days in 2024, primarily due to the higher B2B mix. During the fiscal year, we spent approximately €85 million in CapEx, adding to our production capacity in Arouca, Görlitz, and Pasewalk, and continuing our investments in retail and IT. Even with the share buyback we executed in May, our net leverage was 1.5 times at the end of fiscal 2025, down from 1.8 times at the end of fiscal 2024.

We ended the year with cash and cash equivalents of €329 million after the repurchase of 3.9 million shares, totaling €176 million, and the partial early repayment of the US dollar term loan of $50 million in September. Our inventory to sales ratio declined to 34% for the year from 35% in the fiscal year 2024. Our DSO for the year were healthy 28 days, up from 23 days in 2024, primarily due to the higher B2B mix. During the fiscal year, we spent approximately €85 million in CapEx, adding to our production capacity in Arouca, Görlitz, and Pasewalk, and continuing our investments in retail and IT. Even with the share buyback we executed in May, our net leverage was 1.5 times at the end of fiscal 2025, down from 1.8 times at the end of fiscal 2024.

Speaker #1: fiscal For our DSO , year were healthy , 28 days , up from 23 days for the in 2024 , primarily due higher to the mix during the fiscal year , we spent approximately 85 million in CapEx , adding to our production capacity in Arouca , Görlitz and Powerwalk , and continuing our investments in retail and IT .

Speaker #1: Even with the share buyback , executed we in May , our net leverage was 1.5 times at the end of fiscal 2025 , down from 1.8 times at the end of fiscal 2024 .

Speaker #1: Without the buyback, the net leverage would have been 1.2 times. Our capital allocation priorities continue to be number one, invest in our business.

Ivica Krolo: Without the buyback, the net leverage would have been at 1.2 times. Our capital allocation priorities continue to be number one, invest in our business, number two, reduce debt, and number three, opportunistic share buybacks. Now turning to our outlook for fiscal 2026. We are expecting significant headwinds from FX and tariffs in fiscal year 2026. Regarding FX, we will see an especially strong headwind in the first half of the year, impacting the quarter-over-quarter comparison. At today's euro-US dollar exchange rate of 1.17, we expect approximately 600 to 650 basis points of headwind to revenue growth in both the first and the second quarter, and around 300 to 350 basis points for the full year. The margin impact to gross profit and adjusted EBITDA will be 150 to 200 basis points in each of the first two quarters and about 100 basis points for the full year.

Without the buyback, the net leverage would have been at 1.2 times. Our capital allocation priorities continue to be number one, invest in our business, number two, reduce debt, and number three, opportunistic share buybacks. Now turning to our outlook for fiscal 2026. We are expecting significant headwinds from FX and tariffs in fiscal year 2026. Regarding FX, we will see an especially strong headwind in the first half of the year, impacting the quarter-over-quarter comparison. At today's euro-US dollar exchange rate of 1.17, we expect approximately 600 to 650 basis points of headwind to revenue growth in both the first and the second quarter, and around 300 to 350 basis points for the full year. The margin impact to gross profit and adjusted EBITDA will be 150 to 200 basis points in each of the first two quarters and about 100 basis points for the full year.

Speaker #1: Number two , reduce debt . And number three , opportunistic share buybacks . Now turning to our outlook for fiscal We are 2026 .

Speaker #1: expecting significant headwinds from FX and tariffs in fiscal Regarding year 2026 . FX . We will see an especially strong headwind first half of in the the year , impacting the quarter over quarter comparison and today's euro US dollar exchange rate of 117 .

Speaker #1: We expect approximately 600 to 650 basis points of headwind to revenue growth in both the first and the second quarter, and around 300 to 350 basis points for the full year.

Speaker #1: The margin impact to gross profit and adjusted EBITDA will be points in 150 to 200 basis the first two quarters, and about points for 100 basis the full year.

Speaker #1: As a reminder, nearly all of our costs are in euros, and the majority of our revenue is as well. As such, the absolute euro impact of movements in FX to revenue flows through about 90% to gross profit and about 67% to adjusted EBITDA.

Ivica Krolo: As a reminder, nearly all of our COGS are in euro, and the majority of SG&A is as well. As such, the absolute euro impact of movements in FX to revenue flows through about 90% to gross profit and about 67% to adjusted EBITDA. Our guidance for fiscal 2026 assumes today's exchange rate will remain the same throughout the remainder of the year. Regarding tariffs, we were able to offset most of the 2025 impact with targeted price increases, including the July US price increase. We also benefited from the fact that the majority of our goods for 2025 were already shipped prior to the increase in tariffs. This will not be the case in 2026, where we expect to see more impact from tariffs and COGS than we did in 2025.

As a reminder, nearly all of our COGS are in euro, and the majority of SG&A is as well. As such, the absolute euro impact of movements in FX to revenue flows through about 90% to gross profit and about 67% to adjusted EBITDA. Our guidance for fiscal 2026 assumes today's exchange rate will remain the same throughout the remainder of the year. Regarding tariffs, we were able to offset most of the 2025 impact with targeted price increases, including the July US price increase. We also benefited from the fact that the majority of our goods for 2025 were already shipped prior to the increase in tariffs. This will not be the case in 2026, where we expect to see more impact from tariffs and COGS than we did in 2025.

Speaker #1: Our guidance for fiscal 2026 assumes today’s exchange rate will remain the same throughout the remainder of the year. Regarding tariffs, we were able to offset most of the 2025 impact with targeted price increases, including the July US price increase.

Speaker #1: We also benefited from the fact that the majority of our goods for 2025 were already shipped prior to the increase in tariffs. This will not be the case in 2026, where we expect to see more impact from tariffs in COGS than we did in 2025.

Speaker #1: This will result in about a 100-basis-point decline in both gross margin and EBITDA margin for 2026. With that explanation behind us, now—

Ivica Krolo: This will result in about a 100 basis point decline in both gross margin and EBITDA margin for 2026. With that explanation behind us, now on to the guidance. For 2026, we are targeting constant currency revenue growth of 13% to 15%, which, as Oliver mentioned, is a slower pace than we saw in 2025. The FX headwind should be about 300 to 350 basis points for the full year, resulting in reported revenue growth of 10% to 12% to €2.3 to 2.35 billion. This goal is based on our capacity constraints and the demand in our B2B channel, especially in the emerging youth segment. We target unit growth of approximately 10% per year, a manageable pace of growth when we consider our supply chain, access to specialized labor, and equipment, and our desire to maintain scarcity.

This will result in about a 100 basis point decline in both gross margin and EBITDA margin for 2026. With that explanation behind us, now on to the guidance. For 2026, we are targeting constant currency revenue growth of 13% to 15%, which, as Oliver mentioned, is a slower pace than we saw in 2025. The FX headwind should be about 300 to 350 basis points for the full year, resulting in reported revenue growth of 10% to 12% to €2.3 to 2.35 billion. This goal is based on our capacity constraints and the demand in our B2B channel, especially in the emerging youth segment. We target unit growth of approximately 10% per year, a manageable pace of growth when we consider our supply chain, access to specialized labor, and equipment, and our desire to maintain scarcity.

Speaker #1: for 2026 . We are targeting constant currency revenue growth of 13 to 15% , , as Oliver which mentioned , is a slower pace than we saw in The 2025 .

Speaker #1: FX headwind should be about 300 to 350 basis points for the full year, resulting in reported revenue growth of 10 to 12%, to €2.3 to €2.35 billion.

Speaker #1: This based goal is on our capacity constraints and the demand in our B2B channel , especially in the emerging youth segment . We target unit growth of approximately 10% per year manageable , a pace of growth when we consider our supply chain access to specialized labor and equipment , and our desire to maintain scarcity , we expect adjusted gross margin of 57 to 57.5% , inclusive of the 100 basis points of pressure from FX and points from 100 basis US tariffs .

Ivica Krolo: We expect adjusted gross margin of 57% to 57.5%, inclusive of the 100 basis points of pressure from FX and 100 basis points from incremental US tariffs. We expect adjusted EBITDA of at least €700 million for the year, implying an adjusted EBITDA margin of 30% to 30.5%, inclusive of the pressure from FX and tariffs, totaling 200 basis points. Excluding the impact of these external factors, forecasted adjusted EBITDA margin would be at 32% to 32.5%. Our expected tax rate should be in the range of 26% to 28%. Adjusted EPS is expected to be €1.90 to €2.05, including approximately 15% to 20% of pressure from FX. This is not including the impact of any additional share repurchases. We intend to repurchase share for a total consideration of $200 million during fiscal 2026, subject to market conditions.

We expect adjusted gross margin of 57% to 57.5%, inclusive of the 100 basis points of pressure from FX and 100 basis points from incremental US tariffs. We expect adjusted EBITDA of at least €700 million for the year, implying an adjusted EBITDA margin of 30% to 30.5%, inclusive of the pressure from FX and tariffs, totaling 200 basis points. Excluding the impact of these external factors, forecasted adjusted EBITDA margin would be at 32% to 32.5%. Our expected tax rate should be in the range of 26% to 28%. Adjusted EPS is expected to be €1.90 to €2.05, including approximately 15% to 20% of pressure from FX. This is not including the impact of any additional share repurchases. We intend to repurchase share for a total consideration of $200 million during fiscal 2026, subject to market conditions.

Speaker #1: incremental We expect adjusted EBITDA of at least €700 million for the year . Implying an adjusted EBITDA margin of 30 to 30.5% , of the inclusive pressure from FX and tariffs totaling 200 basis points .

Speaker #1: Excluding these external factors, forecasted adjusted EBITDA margin would be at 32 to 32.5%. Our expected tax rate should be in the range of 26 to 28%.

Speaker #1: in the Adjusted EPs is expected to be €1.90 to €2 five , including approximately 15 to $0.20 of pressure . This is not FX including the impact of any from additional share repurchases .

Speaker #1: We intend to repurchase share total for consideration of $200 million during fiscal 2026 , subject to market conditions . expenditures should be in Capital the range of net 110 to €130 million , leverage target for the end of fiscal 2026 of 1.3 to 1.4 times , excluding the impact of any additional share repurchases .

Ivica Krolo: Capital expenditures should be in the range of EUR 110 million to 130 million. Net leverage target for the end of fiscal 2026 of 1.3 to 1.4 times, excluding the impact of any additional share repurchases. Finally, we expect to open about 40 new retail doors globally over the course of the year. Before I turn back to Oliver to close, I'm excited to announce our plans for a capital markets day at the end of January in New York City. Details on venue and timing will be forthcoming and will be posted on our investor relations website. We are now in year three of our life as a public company, and we are looking forward to providing you a detailed look into the world of Birkenstock and our vision for growth for the next three years.

Capital expenditures should be in the range of EUR 110 million to 130 million. Net leverage target for the end of fiscal 2026 of 1.3 to 1.4 times, excluding the impact of any additional share repurchases. Finally, we expect to open about 40 new retail doors globally over the course of the year. Before I turn back to Oliver to close, I'm excited to announce our plans for a capital markets day at the end of January in New York City. Details on venue and timing will be forthcoming and will be posted on our investor relations website. We are now in year three of our life as a public company, and we are looking forward to providing you a detailed look into the world of Birkenstock and our vision for growth for the next three years. We hope you can join us for a deep dive into all areas of our unique and dynamic business model.

Speaker #1: Finally, we expect to open about 40 new retail doors globally over the course of the year. Before I turn back to close, I'm excited to share our plans for a Capital Markets Day.

Speaker #1: Announce end of 'At the January' in Oliver, New York City. Details on venue and timing will be forthcoming and will be posted on our Investor Relations website.

Speaker #1: We are now in year three of our life as a public company, and we are looking forward to providing you an inside look into the world of Birkenstock and our detailed plans for growth for the next three years. We hope you can join us for a deep dive into all areas of our unique and dynamic business model.

Speaker #1: Thanks , Ivica . 2025 was the strongest year in the over 250 year history of Birkenstock . I am extremely proud of the team and how well and disciplined we steered our business in an overall very challenging context .

Ivica Krolo: We hope you can join us for a deep dive into all areas of our unique and dynamic business model. Thanks, Ivica. 2025 was the strongest year in the over 250-year history of Birkenstock. I am extremely proud of the team and how well and disciplined we steered our business in an overall very challenging context. We remain very optimistic about our future. 2026 is off to a great start with Birkenstock at the top of gifting lists this holiday season. Demand for the footbed remains robust and unconstrained. The main constraints we face are in our own production capacity and our desire to maintain scarcity. As we look ahead to the rest of this fiscal year and beyond, we see opportunity.

Oliver Reichert: Thanks, Ivica. 2025 was the strongest year in the over 250-year history of Birkenstock. I am extremely proud of the team and how well and disciplined we steered our business in an overall very challenging context. We remain very optimistic about our future. 2026 is off to a great start with Birkenstock at the top of gifting lists this holiday season. Demand for the footbed remains robust and unconstrained. The main constraints we face are in our own production capacity and our desire to maintain scarcity. As we look ahead to the rest of this fiscal year and beyond, we see opportunity. The opportunity to continue to take share globally, especially in the fast-growing APAC market, adding to our own retail store fleet, building on our closed-toe momentum, and doubling down on our engineered distribution to maximize profitability.

Speaker #1: We remain very optimistic about our future. '26 is off to a great start, with Birkenstock at the top of gifting this holiday season.

Speaker #1: Demand for the list is unconstrained. The main constraints we face are in our own production capacity and our desire to maintain scarcity. As we look ahead to the rest of this fiscal year and beyond, we see opportunity.

Speaker #1: The opportunity to continue to take , share globally the fast , especially in growing APAC , adding to our own retail store fleet market , building on our close to home , and doubling down on our engineered distribution to maximize profitability , we look forward to seeing you all in New York in January to discuss the next few years of this incredible brand journey .

Ivica Krolo: The opportunity to continue to take share globally, especially in the fast-growing APAC market, adding to our own retail store fleet, building on our closed-toe momentum, and doubling down on our engineered distribution to maximize profitability. We look forward to seeing you all in New York in January to discuss the next few years of this incredible brand journey. We will dig deeper into our growth drivers, including investments in manufacturing, innovation, new usage occasions, retail, and the APAC segment. I would now kindly ask the operator to open our Q&A session. Thank you. Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute.

We look forward to seeing you all in New York in January to discuss the next few years of this incredible brand journey. We will dig deeper into our growth drivers, including investments in manufacturing, innovation, new usage occasions, retail, and the APAC segment. I would now kindly ask the operator to open our Q&A session. Thank you.

Speaker #1: We will dig deeper into our growth drivers , including investments in manufacturing innovation usage occasions , retail and the APAC segment . I would now , new kindly ask the operator to open our Q&A session .

Speaker #1: Thank you .

Speaker #2: Thank you . We will now begin the question and answer session limit . Please yourself to one question and one follow up . If you would like to ask a question , please raise your hand if you have dialed in to today's call , please press star nine to raise your hand and star six to stand unmute .

Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Matthew Boss with JPMorgan. Your line is open. Please go ahead.

Speaker #2: Please, while we compile the Q&A roster, your first question comes from the line of Matthew Bos with J.P. Morgan. Your line is open.

Ivica Krolo: Please stand by while we compile the Q&A roster. Your first question comes from the line of Matthew Boss with JPMorgan. Your line is open. Please go ahead. Great. Thanks. So, Oliver, maybe relative to the 20% constant currency revenue growth in the fourth quarter and 18% for the year, which both exceeded your plan, you're targeting 13% to 15% constant currency growth for fiscal 2026. What's driving the more conservative view for 2026? Have you seen any slowdown in demand so far in the first quarter? And how should we think about this more moderate pace of growth within your long-term algorithm? Matt, hello. Thank you for your question. First of all, we see very strong demand for our brand all over the world. During the holiday season in the US, specifically, some of our big wholesale partners grew over 30%.

Speaker #2: Please go ahead .

Speaker #3: Great . Thanks . So , Oliver , maybe relative to the 20% constant revenue currency growth in the fourth quarter and 18% for the year , which both exceeded your plan .

Matthew Boss: Great. Thanks. So, Oliver, maybe relative to the 20% constant currency revenue growth in the fourth quarter and 18% for the year, which both exceeded your plan, you're targeting 13% to 15% constant currency growth for fiscal 2026. What's driving the more conservative view for 2026? Have you seen any slowdown in demand so far in the first quarter? And how should we think about this more moderate pace of growth within your long-term algorithm?

Speaker #3: You're targeting 13 to 15% constant currency growth for fiscal '26. What's driving the more conservative view for '26? Have you seen any slowdown in FAR demand so far in the first quarter?

Speaker #3: And how should we think about moderating this more pace of growth within your long-term algorithm?

Speaker #1: Hello . Thank you for your question . First of all , we see very strong demand for our brand all over the world during the holiday season in the US , specifically , some of our big wholesale partners grew over 30% .

Oliver Reichert: Matt, hello. Thank you for your question. First of all, we see very strong demand for our brand all over the world. During the holiday season in the US, specifically, some of our big wholesale partners grew over 30%. So our full price realization is still north of 90%. So since nearly two years, we see a change in consumer journey in the Western Hemisphere. A lot of brands, including us, are seeing more traffic and demand coming from multi-brand environment and in-person shopping at wholesale, especially Gen Z customers or consumers. Wholesale partners play successfully the full panoply of marketing activities online, offline, and social. They are very attractive partners. This is good news.

Speaker #1: So our full price realization is still north. So, since nearly two years, we see in consumer journey a change in the Western of 90%.

Ivica Krolo: So our full price realization is still north of 90%. So since nearly two years, we see a change in consumer journey in the Western Hemisphere. A lot of brands, including us, are seeing more traffic and demand coming from multi-brand environment and in-person shopping at wholesale, especially Gen Z customers or consumers. Wholesale partners play successfully the full panoply of marketing activities online, offline, and social. They are very attractive partners. This is good news. We have the highest percentage in EBITDA margin in wholesale, and brand rookies need to have a physical touchpoint with our products. They will return to us for their second, third, fourth, and so on pair. These young customers are buying into more expensive and more complex executions. Don't worry. We continue to manage scarcity and execute very tight inventory management door by door.

Speaker #1: A lot of brands, including us, are seeing traffic and demand coming from a multi-brand environment and in shopping at wholesale, especially from Gen Z customers.

Speaker #1: The wholesale partners play successfully the full range of the piano of marketing activities online and offline and social. They are very attractive partners.

Speaker #1: This is good news. We have the highest percentage in EBITDA margin in wholesale and brand. Rookies need to have a physical touchpoint with our products.

We have the highest percentage in EBITDA margin in wholesale, and brand rookies need to have a physical touchpoint with our products. They will return to us for their second, third, fourth, and so on pair. These young customers are buying into more expensive and more complex executions. Don't worry. We continue to manage scarcity and execute very tight inventory management door by door. But one of our most successful categories in Gen Z, the clogs, you know, Bostons, Naples, we own the clogs category. But from a production perspective, a clog takes more than twice as many production minutes per pair than sandals. So the clogs business puts even more pressure on our production minutes and ultimately our production capacity, which is the biggest limitation to our growth. So we will produce more than 5 million pairs more in 2026.

Speaker #1: They will return to us for their second , third , fourth and so on . Pair these young customers into more buying expensive and more complex executions .

Speaker #1: worry , we Don't continue to . Manage scarcity and tight very execute inventory management door by door . But one of our most successful category Z , in Gen clock , you know , Boston's Naples .

Speaker #1: We own the clock category. But from a production perspective, a clock takes more than twice as many production minutes per pair than sandals.

Ivica Krolo: But one of our most successful categories in Gen Z, the clogs, you know, Bostons, Naples, we own the clogs category. But from a production perspective, a clog takes more than twice as many production minutes per pair than sandals. So the clogs business puts even more pressure on our production minutes and ultimately our production capacity, which is the biggest limitation to our growth. So we will produce more than 5 million pairs more in 2026. These are the main reasons for our growth algo outlook. The demand is not limiting our growth. The capacity does. On your question about the long-term algo, we expect top-line growth over the next three to five years to be in the mid-teens range.

Speaker #1: So the clock puts business even more on our minutes, production, and ultimately our production capacity, which is the biggest limitation to our growth.

Speaker #1: We will produce more—so, more than 5 million pairs more—in '26. These are the main reasons for our growth outlook. The demand is not limiting our growth.

Speaker #1: The does capacity . your On the long question about term algo , we expect top growth over line the next 3 to 5 years to be in the mid-teens range .

These are the main reasons for our growth algo outlook. The demand is not limiting our growth. The capacity does. On your question about the long-term algo, we expect top-line growth over the next three to five years to be in the mid-teens range. We assured we are investing heavily in our pre-production capacity in Portugal, ramping up stitching and pre-forming capacities, especially for our clogs and more complex and more expensive products. Our new purchased facility in Wittichenau near Dresden will further increase our Cork-Latex footbed capacity. Our final assembly lines, where we currently face the biggest bottlenecks, this factory will be operational in 2027. I believe our investor day end of January in New York City will help us a lot to further explain and address this topic in more detail.

Speaker #1: Assured, we are investing heavily in our pre-production capacity in Portugal, ramping up stitching and preforming capacities, especially for our clock styles and more complex and more expensive products.

Ivica Krolo: We assured we are investing heavily in our pre-production capacity in Portugal, ramping up stitching and pre-forming capacities, especially for our clogs and more complex and more expensive products. Our new purchased facility in Wittichenau near Dresden will further increase our Cork-Latex footbed capacity. Our final assembly lines, where we currently face the biggest bottlenecks, this factory will be operational in 2027. I believe our investor day end of January in New York City will help us a lot to further explain and address this topic in more detail. Great. Best of luck. Thank you, Matt. Your next question comes from the line of Laurent Vasilescu, with BNP. Your line is open. Please go ahead. A kind reminder, you will need to press star six with mute. Good morning. Thank you. Sorry, I had to star six, star nine, star six with the Zoom.

Speaker #1: Our new purchased facility in Wittichenau, near Dresden, will further increase our core latex footbed capacity and our final assembly lines, where we currently face the biggest bottlenecks. This factory will be operational in '27.

Speaker #1: I believe our investor day at the end of January in New York City will help us a lot to further explain and address this in more detail.

Speaker #1: topic in

Speaker #3: Luck. Best of great.

Speaker #1: Thank you . Your

Speaker #1: Matt .

Speaker #2: Our next question comes from the line of Laurent Vasilescu with BNP. Your line is open. Please go ahead. A kind reminder: if you are from the press, you will need to press star.

Matthew Boss: Great. Best of luck.

Oliver Reichert: Thank you, Matt.

Operator: Your next question comes from the line of Laurent Vasilescu, with BNP. Your line is open. Please go ahead. A kind reminder, you will need to press star six with mute.

Speaker #2: Good morning .

Speaker #4: Thank Sorry I you . had to star six . Star . Nine . Star six with the zoom . So I apologize about that .

Laurent Vasilescu: Good morning. Thank you. Sorry, I had to star six, star nine, star six with the Zoom. So I apologize about that. Ivica, I wanted to dig a bit more on the margin outlook for 2026 and the impact from FX and tariffs. Can you walk us through in more detail how FX flows through the P&L? Similarly, you took pricing in July to mitigate the tariff impact. Why are you seeing so much margin pressure for tariffs in 2026? And what more can be done to offset some of this? And then I've got a quick follow-up. Thank you.

Speaker #4: Evita, I wanted to dig a bit more into the margin outlook for 2026 and the impact from FX and tariffs. Can you walk us through in more detail how FX flows through the P&L?

Ivica Krolo: So I apologize about that. Ivica, I wanted to dig a bit more on the margin outlook for 2026 and the impact from FX and tariffs. Can you walk us through in more detail how FX flows through the P&L? Similarly, you took pricing in July to mitigate the tariff impact. Why are you seeing so much margin pressure for tariffs in 2026? And what more can be done to offset some of this? And then I've got a quick follow-up. Thank you. Thanks for the question, Laurent, it's Ivica. So you're right. Fiscal 2026 will be heavily impacted by FX and tariffs. So we're presenting a drag to both gross margin and EBITDA margin of each 100 basis points, which is 200 basis points in total. So excluding these external factors, we do not have under our control, margin would be very consistent with fiscal 2025.

Speaker #4: Similarly, you took pricing in July to mitigate the tariff impact. Why are we seeing so much margin pressure from tariffs in 2026? And what more can be done to offset some of this?

Speaker #4: And then I've got a follow-up. Thank you.

Speaker #5: Thanks for question , Laurent . It's Evita , so you're right . Fiscal 2026 will be heavily impacted by FX and . So representing a tariffs both gross margin and EBITDA margin of each 100 basis points , which is 200 basis points in total .

Ivica Krolo: Thanks for the question, Laurent, it's Ivica. So you're right. Fiscal 2026 will be heavily impacted by FX and tariffs. So we're presenting a drag to both gross margin and EBITDA margin of each 100 basis points, which is 200 basis points in total. So excluding these external factors, we do not have under our control, margin would be very consistent with fiscal 2025. So first, regarding FX flow-through and starting with revenue, the 2026 impact will be 300 to 350 basis points drag on top-line growth for the full year or about € 70 million. Given that almost all of our COGS are in euro, as you know, we are producing in Europe, this absolute impact flows through to gross profit at about 90% or € 63 million hit to gross profit.

Speaker #5: So excluding these external factors , we do under not have our control margin would be very consistent with fiscal 2025 . So first , regarding FX flow through and starting with revenue , the 2026 impact will be 300 to 350 basis points .

Ivica Krolo: So first, regarding FX flow-through and starting with revenue, the 2026 impact will be 300 to 350 basis points drag on top-line growth for the full year or about € 70 million. Given that almost all of our COGS are in euro, as you know, we are producing in Europe, this absolute impact flows through to gross profit at about 90% or € 63 million hit to gross profit. Pretty much the same picture for adjusted EBITDA. About 2/3 of the top-line impact flows through the EBITDA or approximately € 47 million on adjusted EBITDA for the full year. So overall, these impacts will be more pronounced in the first half when the dollar was at its strongest level before the decline gained in April this year.

Speaker #5: Drag on top line growth for year , or the full about €70 million . And given the given that almost all of our are in Cogs Euro , as we are producing in Europe , this absolute impact flows through to gross profit at about 90% or €63 million hit to gross profit pretty much the same picture for adjusted EBITDA About .

Speaker #5: Two thirds of the top line impact flows through the or FDA, approximately €47 million on adjusted EBITDA for the full year. So overall, these impacts will be more pronounced than the first half, when the dollar was at its strongest level before the decline began in April this year.

Pretty much the same picture for adjusted EBITDA. About 2/3 of the top-line impact flows through the EBITDA or approximately € 47 million on adjusted EBITDA for the full year. So overall, these impacts will be more pronounced in the first half when the dollar was at its strongest level before the decline gained in April this year. On a quarterly basis, we expect revenue growth will be impacted by about 600 to 650 basis points and margin by 150 to 200 basis points in both Q1 and Q2. In our fiscal second half, the pressure will be much less year over year. Then, with regards to your question on tariffs, so for the full year fiscal 2026, we expect about 100 basis points of margin pressure from incremental tariffs, which is reflected in our forecast.

Speaker #5: On a quarterly basis, we expect revenue growth will be impacted by about 600 to 650 basis points, and margin by 150 to 200 basis points in both Q1 and Q2.

Ivica Krolo: On a quarterly basis, we expect revenue growth will be impacted by about 600 to 650 basis points and margin by 150 to 200 basis points in both Q1 and Q2. In our fiscal second half, the pressure will be much less year over year. Then, with regards to your question on tariffs, so for the full year fiscal 2026, we expect about 100 basis points of margin pressure from incremental tariffs, which is reflected in our forecast. We look at pricing to offset the majority of the incremental tariff impact in absolute terms, which is dollar neutral, however, not margin neutral. So for example, we say we have a $100 shoe with $40 COGS and $60 gross profit. That is a 60% gross margin. Now, we add $10 of tariffs to COGS. We need to add $10 to price to maintain $60 gross profit.

Speaker #5: Fiscally, in our second half, the pressure will be much less year over year. Then, with regards to your question on tariffs.

Speaker #5: So for fiscal year 2026, we expect about 100 basis points of margin pressure from incremental tariffs, which is reflected in our forecast.

Speaker #5: We look at pricing to offset the majority incremental tariff impact in absolute terms, which is dollar neutral, if not margin neutral.

We look at pricing to offset the majority of the incremental tariff impact in absolute terms, which is dollar neutral, however, not margin neutral. So for example, we say we have a $100 shoe with $40 COGS and $60 gross profit. That is a 60% gross margin. Now, we add $10 of tariffs to COGS. We need to add $10 to price to maintain $60 gross profit. But the margin is now 54.5%. So that is 60 over 110. If we wanted to maintain a 60% margin, we would have to take pricing of $25 to bring our gross profit to 75, not 60. The price increase would have to be 2.5 times the tariffs. This is not something we would do to our customers, being a democratic brand. And as you know, we review prices every season and make adjustments very surgically on a style-by-style basis.

Speaker #5: So, for example, we say we have a $100 shoe with $40 COGS and $60 gross profit. That is a 60% gross margin.

Speaker #5: Now we add $10 of tariffs to Cox. We need to add price to maintain $10 to $60 gross profit. But the margin is now 54.5.

Speaker #5: So that is 60 over 110. Wanted to maintain a 60% margin. If we have to, we would take pricing to $25 to bring our gross profit to 75, not 60.

Ivica Krolo: But the margin is now 54.5%. So that is 60 over 110. If we wanted to maintain a 60% margin, we would have to take pricing of $25 to bring our gross profit to 75, not 60. The price increase would have to be 2.5 times the tariffs. This is not something we would do to our customers, being a democratic brand. And as you know, we review prices every season and make adjustments very surgically on a style-by-style basis. We will continue to mitigate the tariff impact on margin, lowering COGS in other areas. We do this through production efficiencies, improved logistics, and better terms with suppliers and vendors along our vertically integrated supply chain. But this naturally does take time. In addition, our growing share of business in APAC will, for the longer term, reduce our exposure to the US dollar and to US tariffs regime.

Speaker #5: The price increase would have to be 2.5 times the tariffs. This is not something we do to our customers. Being a democratic brand would—

Speaker #5: And as you know, we review prices every season and make seasonal adjustments on a surgical, style-by-style, and by-star basis. We will continue to mitigate the tariff impact on margin by lowering COGS and other areas.

We will continue to mitigate the tariff impact on margin, lowering COGS in other areas. We do this through production efficiencies, improved logistics, and better terms with suppliers and vendors along our vertically integrated supply chain. But this naturally does take time. In addition, our growing share of business in APAC will, for the longer term, reduce our exposure to the US dollar and to US tariffs regime.

Speaker #5: We do this through efficiencies, improved logistics, and better terms with suppliers and vendors along our vertically integrated supply chain. But this naturally does take time.

Speaker #5: In addition, share growth of business in APAC will, for the longer term, reduce our exposure to the US dollar and to the US tariffs regime.

Speaker #4: Very helpful. And there's a follow-up on a finer point on Matt's question. I know you go by guide, but just because there's a lot of pressure on the stock.

Ivica Krolo: Very helpful detail. And as a follow-up on a finer point on Matt's question, I know you don't guide by quarter, but just because there's a lot of pressure on the stock pre-market on this 13% to 15% top line, any finer point on just like on Q1, could we assume that top line could be up high teens on that front? Hello, it's Oliver again. Yeah, of course. I mean, the guidance is the guidance. We guide mid-teens, especially on the long-term algorithm. But I mean, just remember my first comments on the holiday season, especially in the US, business is going super well. So I understand your worries somehow. But listen, it's really brand is performing super strong. So yeah, all good. Very helpful. Very helpful, Oliver. And we'll look forward to January. Your next question comes from the line of Randy Konik with Jefferies.

Laurent Vasilescu: Very helpful detail. And as a follow-up on a finer point on Matt's question, I know you don't guide by quarter, but just because there's a lot of pressure on the stock pre-market on this 13% to 15% top line, any finer point on just like on Q1, could we assume that top line could be up high teens on that front?

Speaker #4: Pre-market, on this 13 to 15% top line, any finer point on—just like us—on we assume that one quarter could top line, could be up high teens on that front?

Speaker #1: Hello , it's Oliver again . Yeah , of course . I mean , you know , the guidance is the guidance . You know , we guide mid-teens , especially on the on the long term But you know , I just mean , algorithm .

Oliver Reichert: Hello, it's Oliver again. Yeah, of course. I mean, the guidance is the guidance. We guide mid-teens, especially on the long-term algorithm. But I mean, just remember my first comments on the holiday season, especially in the US, business is going super well. So I understand your worries somehow. But listen, it's really brand is performing super strong. So yeah, all good.

Speaker #1: Remember first comments on my season, especially in the US, the holiday going business is super well. So I your your somehow.

Speaker #1: Worry. But listen, its really brand is performing super strong. So, yeah. All good.

Speaker #4: Helpful, very helpful. Oliver, we'll look very forward to January.

Laurent Vasilescu: Very helpful. Very helpful, Oliver. And we'll look forward to January.

Speaker #2: Next, your question comes from the line of Randy Konig with Jefferies. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Randy Konik with Jefferies. Your line is open. Please go ahead.

Ivica Krolo: Your line is open. Please go ahead. Hey, Randy, can you hear us? Yeah, can you hear me? Yeah, sorry about that unmuted thing. Look, can we talk a little bit about channel mix a little bit more? I think for the full year, B2B was up about 21%, D2C up about 12%. And then in the fourth quarter, the B2B channel was, I think, even stronger, up about 26% in constant currency. How do you think about channel growth in 2026? Do you think B2B will continue to outpace D2C by such a wide margin as it did? And then what are you trying to do to drive continued faster, even faster growth in the D2C channel? Thanks, guys. Thanks for the question, Randy. It's Ivica again. So as you know, this is a shift that we've been seeing in the business for over a year.

Oliver Reichert: Hey, Randy, can you hear us?

Speaker #1: Randy, can you hear us? Hey,

Speaker #6: Yeah . hear me Can you ? Yeah . Sorry about Just that . unmuted thing . Look , can we can we talk a little bit about channel mix a little think for the full year , B2B was up bit more ?

Randy Konik: Yeah, can you hear me? Yeah, sorry about that unmuted thing. Look, can we talk a little bit about channel mix a little bit more? I think for the full year, B2B was up about 21%, D2C up about 12%. And then in the fourth quarter, the B2B channel was, I think, even stronger, up about 26% in constant currency. How do you think about channel growth in 2026? Do you think B2B will continue to outpace D2C by such a wide margin as it did? And then what are you trying to do to drive continued faster, even faster growth in the D2C channel? Thanks, guys.

Speaker #6: about 21% . DTC up about 12% . And then in the fourth quarter , the I B2B channel was , I think , stronger , up even about 26% in constant currency .

Speaker #6: How do you think about channel growth in 2026? Do you think B2B will continue to outpace DTC by such a wide margin as it did?

Speaker #6: And then what are you trying to do drive ? to Continued faster , even faster growth in the DTC channel ? Thanks , guys .

Speaker #5: Thanks for the question , Randy . It's again , so as you know , this is a that we've been shift seeing in the business for year over a .

Ivica Krolo: Thanks for the question, Randy. It's Ivica again. So as you know, this is a shift that we've been seeing in the business for over a year. In-person shopping is back, especially within our fastest growing cohort, which is the youth market, where consumers prefer to shop in a multi-brand retail environment. This is very favorable to our B2B business, where we have over 6,000 high-quality strategic retail partners globally. They are doing a very good job representing our brand, reaching new consumers through their own advertising and outreach. This is basically marketing spend that brings consumers to our brand, and it's effectively not spent by us. This is a good thing and supports the very strong margins we are achieving. We're leaning in both channels, but we can't control where consumers choose to interact with our brand.

Speaker #5: In-person shopping is back , especially within our fastest growing cohort , which is the youth market . Where consumers prefer to shop in a retail multi-brand environment .

Ivica Krolo: In-person shopping is back, especially within our fastest growing cohort, which is the youth market, where consumers prefer to shop in a multi-brand retail environment. This is very favorable to our B2B business, where we have over 6,000 high-quality strategic retail partners globally. They are doing a very good job representing our brand, reaching new consumers through their own advertising and outreach. This is basically marketing spend that brings consumers to our brand, and it's effectively not spent by us. This is a good thing and supports the very strong margins we are achieving. We're leaning in both channels, but we can't control where consumers choose to interact with our brand. We have learned through the experience of other brands that you can't force consumers into one channel or another.

Speaker #5: This is very our favorable to business , where we have over 6000 high quality strategic retail partners globally , and they are doing a very good job representing our brand , reaching new consumers through their own advertising and outreach .

Speaker #5: And this is basically marketing spend that brings consumers to our brand. And it's effectively not spent by us. This is a good thing.

Speaker #5: We are very strong and are achieving margins in both channels, leaning in on support. But we can't control where consumers choose to interact with our brand.

Speaker #5: We learned through the experience of other brands that you can't force consumers into one channel or another. All we can do is make sure that the touchpoints they have with the brand are high quality.

We have learned through the experience of other brands that you can't force consumers into one channel or another. All we can do is make sure the touchpoints they have with the brand are high quality, educate on the purpose of Birkenstock, strive to maintain scarcity in the channel, and support full price realization, regardless of channel. And this is what we're doing. And we are thrilled to see the strong demand, regardless of where it is. It means more Birkenstocks on feet and the opportunity to turn the new consumer into a lifetime brand fan who we firmly believe will become a D2C consumer at some point in their consumer journey, regardless of where they purchase the first or the second pair.

Speaker #5: Educate on the purpose of Birkenstock, strive to maintain scarcity in the channel, and support full price realization regardless of channel. And this is what we're doing, and we are thrilled to see the strong demand, regardless of where it is.

Ivica Krolo: All we can do is make sure the touchpoints they have with the brand are high quality, educate on the purpose of Birkenstock, strive to maintain scarcity in the channel, and support full price realization, regardless of channel. And this is what we're doing. And we are thrilled to see the strong demand, regardless of where it is. It means more Birkenstocks on feet and the opportunity to turn the new consumer into a lifetime brand fan who we firmly believe will become a D2C consumer at some point in their consumer journey, regardless of where they purchase the first or the second pair.

Speaker #5: It means more Birkenstocks on feet and the opportunity to turn the new consumer into a lifetime fan—a brand we firmly believe will come, will become a...

Speaker #5: DTC who we consumer at some point in their consumer journey , regardless of where they purchase the first or the second pair . So with regards to B2B outpacing DTC , yes , we do expect this trend of faster so B2B growth to continue in 2026 .

Ivica Krolo: So with regards to B2B outpacing D2C, so yes, we do expect this trend of faster B2B growth to continue in 2026 and for the foreseeable future as we continue to reach more and more consumers who are new to the brand, especially in the younger demographics. But both channels are growing double-digit. Few points that are very important to this. We are not compromising high-quality distribution and full price realization. We manage inventory in the B2B channel very tightly through engineered distribution model. Full price realization is at over 90%. Stock-to-sales ratios in the channel are very healthy, and our order book continues to be very strong.

So with regards to B2B outpacing D2C, so yes, we do expect this trend of faster B2B growth to continue in 2026 and for the foreseeable future as we continue to reach more and more consumers who are new to the brand, especially in the younger demographics. But both channels are growing double-digit. Few points that are very important to this. We are not compromising high-quality distribution and full price realization. We manage inventory in the B2B channel very tightly through engineered distribution model. Full price realization is at over 90%. Stock-to-sales ratios in the channel are very healthy, and our order book continues to be very strong.

Speaker #5: And for the foreseeable future, as we continue to reach more and more consumers who are new to the brand, especially in the younger demographics.

Speaker #5: But both channels double are growing digit few points that are very important to this . We are not compromising high quality distribution and full realization .

Speaker #5: price We manage inventory in the B2B channel very tightly through engineered distribution model , full price realization is at over 90% stock to sales ratios in the channel are very and healthy our order book continues to be very strong on your on the last your part of question on the DTC channel we itself , are very much focused on our accelerating store rollout to promote the high quality touchpoints with the brand and to present the full range of our products .

Ivica Krolo: On the last part of your questions on the D2C channel itself, we are very much focused on accelerating our store rollout to promote the high-quality touchpoints with the brand and to present the full range of our products and, of course, introduce newness. With 97 stores globally, we are not able to capture all in-person demand that we are seeing with our own B2B business. We added 30 stores in 2025, and we should add another 40 in 2026. Additionally, we are working to drive an even stronger connection to our consumers through more targeted membership benefits, a loyalty program, exclusive styles, content, and special events. Just to follow up, when you say, I think you said you're committing to double-digit growth on both channels, is that on a constant currency basis?

On the last part of your questions on the D2C channel itself, we are very much focused on accelerating our store rollout to promote the high-quality touchpoints with the brand and to present the full range of our products and, of course, introduce newness. With 97 stores globally, we are not able to capture all in-person demand that we are seeing with our own B2B business. We added 30 stores in 2025, and we should add another 40 in 2026. Additionally, we are working to drive an even stronger connection to our consumers through more targeted membership benefits, a loyalty program, exclusive styles, content, and special events.

Speaker #5: And of course, with the introduction of newness with 97 doors, we are not able to capture all in-person demand that we are seeing with our own DB business.

Speaker #5: We added stores in 2025, and we should add another 30 to 30 additionally, so are 40 in 2026. Working to drive even a stronger connection to consumers through more membership targeted.

Speaker #5: Loyalty A program, exclusive content, and special styles events.

Speaker #6: follow

Speaker #6: up , And just to I say when you think you said you're committing to double digit growth on both channels , is that on a constant currency basis ?

Randy Konik: Just to follow up, when you say, I think you said you're committing to double-digit growth on both channels, is that on a constant currency basis? Lastly, do you expect, again, the growth rate spread to widen or stay about the same or narrow from a B2B stronger than D2C growth rate in 2026? Thanks, guys.

Speaker #6: and lastly , do you the expect again , the . growth And rate spread to widen about the or stay same or narrow from a B2B stronger than DTC growth rate 2026 ?

Ivica Krolo: Lastly, do you expect, again, the growth rate spread to widen or stay about the same or narrow from a B2B stronger than D2C growth rate in 2026? Thanks, guys. With regards to the first part of your question, yes, it's constant currency. With regards to the second part of your question, so we expect the trend that we are currently seeing to continue. Got it. Thanks, guys. Your next question comes from the line of Lorraine Hutchinson with Bank of America. Your line is open. Please go ahead. Thank you. Good morning. The growth in EMEA accelerated nicely. What are you seeing in terms of consumer demand in the EU in particular, and any comments on Q1 trends there? Hey, Lorraine, this is Niko. Thank you for your question.

Speaker #6: in Thanks , .

Speaker #5: With regards to the first part of your it's constant question , yes , currency with . And regards to the second part of your question , so we expect the trend that we are currently considering seeing to continue .

Ivica Krolo: With regards to the first part of your question, yes, it's constant currency. With regards to the second part of your question, so we expect the trend that we are currently seeing to continue.

Speaker #6: Got it . guys Thanks

Speaker #6: . Your

Randy Konik: Got it. Thanks, guys.

Speaker #2: The question comes next from the line of Lorraine Hutchinson with Bank of America. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Lorraine Hutchinson with Bank of America. Your line is open. Please go ahead.

Speaker #7: Good, thank you. Morning. The growth in EMEA accelerated nicely. What are you seeing in terms of consumer demand in the EU in particular?

Lorraine Hutchinson: Thank you. Good morning. The growth in EMEA accelerated nicely. What are you seeing in terms of consumer demand in the EU in particular, and any comments on Q1 trends there?

Speaker #7: And any comments on first quarter trends? There—

Speaker #5: Hey

Speaker #5: Lorraine, this is Nico. Thank you for your question. Indeed, we projected in the last earnings call an acceleration of growth in EMEA, and the 17% in our Q4 is significant versus the previous quarter.

Nico Bouyakhf: Hey, Lorraine, this is Niko. Thank you for your question. Indeed, we projected in the last earnings call an acceleration of growth in EMEA, and the 17% in Q4 are a significant acceleration versus previous quarter. We saw double-digit growth across B2B and D2C in an overall flat to negative market. So effectively, we continue to be one of the very few chosen brands, and effectively, we take share from many other players. Growth, as also part of your question in Q4, was predominantly driven by a strong consumer appetite for product newness and higher price points. We are particularly pleased with our closed-toe performance. This category grew more than two times our overall business, and closed shoes, so lace-up shoes, grew almost two times our overall business. Looking at the top 20 styles in our sales, 10 styles are closed-toe, and half of these are closed shoes.

Ivica Krolo: Indeed, we projected in the last earnings call an acceleration of growth in EMEA, and the 17% in Q4 are a significant acceleration versus previous quarter. We saw double-digit growth across B2B and D2C in an overall flat to negative market. So effectively, we continue to be one of the very few chosen brands, and effectively, we take share from many other players. Growth, as also part of your question in Q4, was predominantly driven by a strong consumer appetite for product newness and higher price points. We are particularly pleased with our closed-toe performance. This category grew more than two times our overall business, and closed shoes, so lace-up shoes, grew almost two times our overall business. Looking at the top 20 styles in our sales, 10 styles are closed-toe, and half of these are closed shoes. Just to name a few, Naples, we are onto something here.

Speaker #5: We saw double-digit growth across B2B and B2C in an overall flat to negative market. So, effectively, we continue to be one of the very few chosen brands.

Speaker #5: And effectively, we take share from many other players. Growth is also part of the question. In your Q4, it was predominantly driven by a strong consumer appetite for product newness and higher price points.

Speaker #5: We are particularly pleased with our closed shoes performance. This category grew more than two times our overall business, and closed shoes — so lace-up shoes grew almost two times.

Speaker #5: Our overall business . Looking at the top 20 styles in our sales , ten styles are closed toe and half of these are closed shoes , just to name a few .

Speaker #5: We are on Naples . to something here . That's a new clock silhouette , specifically the wrapped that we bring towards the consumer , and we see great traction .

Just to name a few, Naples, we are onto something here. That's a new clog silhouette, specifically the wrapped that we bring towards the consumer, and we see great traction. It's growing triple-digit, and it's really also outgrowing Boston. And then to name a closed-toe silhouette, the Uji is doing really strong. Again, strong consumer appetite from a female consumer, but also from a male consumer. Your second part of the question was Q1. We are very pleased to see that we are off to a great start in Q1 and see a continuation of the trends that I just mentioned. So appetite for product newness and higher price points. We are very confident that we again outperform the market and will take share from many other players and be the brand of choice for our consumers.

Speaker #5: It's growing triple digits, and really also, it's outgrowing Boston. And then to name a closed shoe silhouette, the UTI is doing really strong.

Ivica Krolo: That's a new clog silhouette, specifically the wrapped that we bring towards the consumer, and we see great traction. It's growing triple-digit, and it's really also outgrowing Boston. And then to name a closed-toe silhouette, the Uji is doing really strong. Again, strong consumer appetite from a female consumer, but also from a male consumer. Your second part of the question was Q1. We are very pleased to see that we are off to a great start in Q1 and see a continuation of the trends that I just mentioned. So appetite for product newness and higher price points. We are very confident that we again outperform the market and will take share from many other players and be the brand of choice for our consumers. We project our Q1 in EMEA to be very much in line with our overall guidance.

Speaker #5: Again, strong consumer appetite from a female consumer, but also from a male consumer. Your second part of the question was Q1.

Speaker #5: We're very pleased to see that we are off to a great start in Q1 and see a continuation of the trends that I just mentioned.

Speaker #5: So, appetite for product newness and higher price points. We're very confident that we will again outperform the market and will take share from many other players and be the brand of choice for our consumers.

Speaker #5: We project our Q1 in EMEA to be very much in line with our overall guidance , and as shared in the opening remarks , our growth is not impacted by consumer demand , but our manufacturing capacity and distribution wise , our will to quality distribution remain the in our .

We project our Q1 in EMEA to be very much in line with our overall guidance. As shared in the opening remarks, our growth is not impacted by consumer demand, but our manufacturing capacity. Distribution-wise, our will to maintain the quality in our distribution.

Ivica Krolo: As shared in the opening remarks, our growth is not impacted by consumer demand, but our manufacturing capacity. Distribution-wise, our will to maintain the quality in our distribution. Thank you. Then it sounds like capacity constraints are the key reason for the slower growth in 2026. Would you expect to be back in a position to return to mid to high teens growth in fiscal 2027? Hello, Lorraine. It's Ivica speaking. As you know, we are constantly capacity constrained. We've been for some time. What we are doing is now building up the capacity to close the gap to the demand. Otherwise, we would not be in a position to serve and keep up with the demand that we are seeing in the market. Overall, our goal is to increase our capacity in terms of units by roughly 10% for the foreseeable future.

Speaker #7: Thank you. And then it sounds like capacity constraints are the key reason for the slower growth in '26. Would you expect to be back in a position to return to mid- to high-teens?

Lorraine Hutchinson: Thank you. Then it sounds like capacity constraints are the key reason for the slower growth in 2026. Would you expect to be back in a position to return to mid to high teens growth in fiscal 2027?

Speaker #7: Growth in fiscal 27 ?

Ivica Krolo: Hello, Lorraine. It's Ivica speaking. As you know, we are constantly capacity constrained. We've been for some time. What we are doing is now building up the capacity to close the gap to the demand. Otherwise, we would not be in a position to serve and keep up with the demand that we are seeing in the market. Overall, our goal is to increase our capacity in terms of units by roughly 10% for the foreseeable future. And this will certainly help us to serve the demand going forward.

Speaker #5: Hi Lauren , it's so as you know , we are capacity constantly constrained . I've been we've been for some time what we are doing is now building up the capacity to close the gap to the demand .

Speaker #5: Otherwise, we would be in a not position to serve and keep up with the demand that we are seeing in the market.

Speaker #5: So overall, our goal is to increase our capacity, in terms of units, by roughly 10% for the foreseeable future. And this will certainly help us to serve the demand going forward.

Speaker #5: . Thank you

Speaker #7: .

Ivica Krolo: And this will certainly help us to serve the demand going forward. Thank you. Your next question comes from the line of Michael Binetti with Evercore ISI. Your line is open. Please go ahead. Hey, guys. Thanks. Can you hear me okay? I can hear you. Hey, guys. So I guess on the EBITDA margin guidance, could you just help us unpack it a little bit more? You gave us 100 basis points drag from FX, 100 basis points drag from tariffs. So we're trying to bridge to the 130 to 175 basis points in total. I think when we last checked in, you had 75 basis points left to recapture from the factory. How should we think about like-for-like pricing as a good guy offsetting the tariffs? And then it sounds like wholesale grows above D2C. So I think that's positive on the EBITDA margin rate line.

Speaker #2: Your line of questioning comes next from Michael Binetti with Evercore ISI. Your line is open. Please go ahead.

Lorraine Hutchinson: Thank you.

Operator: Your next question comes from the line of Michael Binetti with Evercore ISI. Your line is open. Please go ahead.

Speaker #8: Hey , open . guys . Thanks . Can you hear me ? Okay .

Speaker #1: Yeah .

Speaker #8: Hey, guys. So I guess, on the EBITDA margin guidance, could you just help us unpack it a little bit more?

Michael Binetti: Hey, guys. Thanks. Can you hear me okay? I can hear you. Hey, guys. So I guess on the EBITDA margin guidance, could you just help us unpack it a little bit more? You gave us 100 basis points drag from FX, 100 basis points drag from tariffs. So we're trying to bridge to the 130 to 175 basis points in total. I think when we last checked in, you had 75 basis points left to recapture from the factory. How should we think about like-for-like pricing as a good guy offsetting the tariffs? And then it sounds like wholesale grows above D2C. So I think that's positive on the EBITDA margin rate line. Is there any way to help us size a couple of those components?

Speaker #8: gave You us 100 basis points . Drag from 100 basis points . Drag from tariffs . So if we're trying to bridge to the 130 to 175 basis points total in , I think when we last checked in , you had 75 basis points left to recapture from the factory .

Speaker #8: How should we think about like for like pricing as a , as a good guy offsetting the tariffs . And then it sounds like wholesale grows above DTC .

Speaker #8: Should I think positively on the EBITDA margin rate line? Is there any way to help us size a couple of those components?

Speaker #5: Yeah , sure . Hi , Michael , it's it's so speaking . So we closed fiscal 25 with a gross margin of And the external that is factors , 59.1% .

Ivica Krolo: Is there any way to help us size a couple of those components? Yeah, sure. Hi, Michael. It's Ivica speaking. We closed fiscal 2025 with a gross margin of 59.1%. The external factors, that is, tariffs and the drag in currency, is representing a drag in total of 200 basis points. That means 57.1%, and we guided 57% to 57.5%. What are the puts and takes here? Absorption and capacity absorption within our production will contribute roughly 60 basis points. You mentioned correctly, Michael, 75. However, the base for 2026 is higher. As such, the positive contribution will be around 60 basis points. The next point is on channel. As B2B will outpace D2C growth, there will be a drag in gross margin from the channel shift. This is basically around 50 basis points. Overall, this is neutral.

Ivica Krolo: Yeah, sure. Hi, Michael. It's Ivica speaking. We closed fiscal 2025 with a gross margin of 59.1%. The external factors, that is, tariffs and the drag in currency, is representing a drag in total of 200 basis points. That means 57.1%, and we guided 57% to 57.5%. What are the puts and takes here? Absorption and capacity absorption within our production will contribute roughly 60 basis points. You mentioned correctly, Michael, 75. However, the base for 2026 is higher. As such, the positive contribution will be around 60 basis points. The next point is on channel. As B2B will outpace D2C growth, there will be a drag in gross margin from the channel shift. This is basically around 50 basis points. Overall, this is neutral. And then what is not embedded is like-for-like pricing. And in that respect, the guide of 57 to 57.5 is more conservative.

Speaker #5: . And the drag in currency representing a drag is total of 200 basis points . in So that means . And we 57.1 guided 57 to 57.5 .

Speaker #5: So, what are the and takes, puts here? And absorption and capacity absorption within our production will contribute roughly 60 basis points. You mentioned correctly, Michael, 75.

Speaker #5: However, the base for '26 is higher. As such, the positive contribution will be around 60 basis points. The next point is on channel, as B2B will outpace DTC growth.

Speaker #5: There will be a drag in the gross margin from channel shift, and this is basically around 50 to 50 basis points. Overall, this is so neutral.

Speaker #5: And then what is not embedded is like-for-like pricing. And in that respect, the guide of conservatively 57 to 57.5 is more.

Ivica Krolo: And then what is not embedded is like-for-like pricing. And in that respect, the guide of 57 to 57.5 is more conservative. Okay. And then I'm just curious, a quick couple of follow-ups. So I think you said the units grow about 10%, and that's based on some capacity constraints and your desire to control scarcity. What is the unit growth capacity if you weren't trying to control scarcity? What could you produce given where the facilities are at right now? And then, Ivica, just to clarify, how much does the Australia roll-up add to revenues this year? Hi, Michael. I'm taking the first part as Oliver. Thank you. It is not really easy to comment this because it's like a really diverse picture on what kind of article are we talking about.

Speaker #8: Okay . And then I'm just curious a quick a follow quick a quick couple follow ups that said you you , I think said the units grow about 10% .

Michael Binetti: Okay. And then I'm just curious, a quick couple of follow-ups. So I think you said the units grow about 10%, and that's based on some capacity constraints and your desire to control scarcity. What is the unit growth capacity if you weren't trying to control scarcity? What could you produce given where the facilities are at right now? And then, Ivica, just to clarify, how much does the Australia roll-up add to revenues this year?

Speaker #8: And that's based on some capacity And your constraints . desire to control , you know , control scarcity . What is the the unit what is growth capacity ?

Speaker #8: If you weren't trying to control scarcity, what, like, could you produce given where the facilities are at right now? And then, just to clarify, how much does the Australia roll-up add to revenues this year?

Speaker #1: Hi Michael , I'm taking the first part as Oliver you . . Thank is it It is not really easy to to comment this because it's like you know , it really diverse picture on what kind of article are we talking about .

Oliver Reichert: Hi, Michael. I'm taking the first part as Oliver. Thank you. It is not really easy to comment this because it's like a really diverse picture on what kind of article are we talking about. That's why I mentioned this from a production capacity perspective, that a clogs, as an example, will digest double the time in minutes, in production minutes, than an average sandal. So in total, somehow the multiple is if you sell one pair online, it equals more or less 2.4 pairs in wholesale to reach the same financial impact. So this alone is a big shift from a unit perspective. That is also what you can see in our unit versus ASP comparison. And that's why we have this two-thirds units and one-third ASP situation. So the more we grow in wholesale, the more we are capacity restricted.

Speaker #1: That's why I mentioned this . You know , from a production capacity perspective , that o'clock as an example , will digest double the time in minutes in production minutes than in average channel .

Ivica Krolo: That's why I mentioned this from a production capacity perspective, that a clogs, as an example, will digest double the time in minutes, in production minutes, than an average sandal. So in total, somehow the multiple is if you sell one pair online, it equals more or less 2.4 pairs in wholesale to reach the same financial impact. So this alone is a big shift from a unit perspective. That is also what you can see in our unit versus ASP comparison. And that's why we have this two-thirds units and one-third ASP situation. So the more we grow in wholesale, the more we are capacity restricted. So that's why we are constantly managing these channels as well and try to maneuver us through their article mix and our production minutes. And we're constantly capacity constrained. So that is the big jigsaw puzzle at the moment we're deep diving in.

Speaker #1: So in in total the somehow the multiple is if you , if you sell one pair in online , it equals more or less two and a 2.4 pairs half in wholesale to reach the same financial impact .

Speaker #1: So this alone is a big shift , you know , from , from a unit a , from perspective . That's is also what you can see in our unit versus ASP comparison .

Speaker #1: that's why we have And two third this units and one third ASP situation . So the more we grow wholesale , in the more we are capacity restricted .

Speaker #1: So that's why we are constantly managing channels as these well . And and try to to maneuver us through their article mix and our production minutes .

So that's why we are constantly managing these channels as well and try to maneuver us through their article mix and our production minutes. And we're constantly capacity constrained. So that is the big jigsaw puzzle at the moment we're deep diving in. And I'm pretty confident that we can explain it really very transparent and answer all questions in our investor day end of January in New York, because then you will really understand that. And I know it's pretty unique and it sounds super weird from outside, but our growth algorithm is not designed by demand. It's designed by our production capacity.

Speaker #1: And we're constantly capacity constrained. So that is the big jigsaw puzzle at the moment. We're deep diving in, and I'm pretty confident that we can explain it really very transparently and answer all questions in our Investor Day at the end of January in New York, because then you will really understand that.

Ivica Krolo: And I'm pretty confident that we can explain it really very transparent and answer all questions in our investor day end of January in New York, because then you will really understand that. And I know it's pretty unique and it sounds super weird from outside, but our growth algorithm is not designed by demand. It's designed by our production capacity. And if people decide to switch to wholesale channels to buy our products, and if they decide to buy into more expensive price groups and more complex price groups, the overall capacity in millions and units are declining because we cannot deliver simply more of the same thing. Does that make sense to you? Yeah, I understand. Yeah, completely. And then just, yeah, the Australia part, please. Sure, Michael. It's Ivica again on the Australia part.

Speaker #1: And, you know, that's pretty unique, and it sounds super weird from the outside, but our growth algorithm is not designed by its demand.

Speaker #1: designed by our production capacity . And if people decide to to switch to wholesale channels our to buy products , and if decide to buy they into more expensive price groups and more complex price groups , the overall capacity in millions and units are declining because we cannot deliver simply of the more same thing .

And if people decide to switch to wholesale channels to buy our products, and if they decide to buy into more expensive price groups and more complex price groups, the overall capacity in millions and units are declining because we cannot deliver simply more of the same thing. Does that make sense to you?

Speaker #1: You make sense to .

Speaker #8: You ? Yeah , yeah , completely . And then okay . And then just Australia yeah , the part please . .

Speaker #5: For Michael again, Australia is part, so we only expect overall an immaterial impact on the Australia acquisition for the 2026 P&L.

Michael Binetti: Yeah, I understand. Yeah, completely. And then just, yeah, the Australia part, please.

Ivica Krolo: Sure, Michael. It's Ivica again on the Australia part. So we expect overall an immaterial impact on the Australia acquisition for the 2026 P&L. The benefit of this acquisition over the next few years is we cut out the middleman and take Australia to its full potential in D2C and capture the full value directly in our P&L, basically. In a way, Australia was a unique situation in that we had a long-time partner who was looking for retirement. And basically, this was driving the decision to directly enter this market.

Ivica Krolo: So we expect overall an immaterial impact on the Australia acquisition for the 2026 P&L. The benefit of this acquisition over the next few years is we cut out the middleman and take Australia to its full potential in D2C and capture the full value directly in our P&L, basically. In a way, Australia was a unique situation in that we had a long-time partner who was looking for retirement. And basically, this was driving the decision to directly enter this market. Okay. Thanks a lot, guys. Your next question comes from the line of Dana Telsey with Telsey Advisory Group. Your line is open. Please go ahead. Hi, good morning, everyone. As you think about the D2C channel, was there any difference in performance between e-comm and the physical stores? And then with your opening of stores in 2026, where are those stores going to be located regionally?

Speaker #5: The benefit of this acquisition over the next years is we cut out the middleman and take Australia to its full potential in DTC and capture the full value of our—basically, in a way, Australia was P&L.

Speaker #5: A unique situation in that we had a long-time partner who was looking for retirement, and basically, this was driving the decision to directly enter this market.

Speaker #8: A lot. Okay, thanks, guys.

Speaker #2: Your next question comes from the line of Donna Telsey with Telsey Advisory Group. Your line is open. Please go ahead.

Michael Binetti: Okay. Thanks a lot, guys.

Operator: Your next question comes from the line of Dana Telsey with Telsey Advisory Group. Your line is open. Please go ahead.

Speaker #9: Hi . Good morning everyone . think about As you the DTC channel , was there any difference in performance between E-com and the physical stores ?

Dana Telsey: Hi, good morning, everyone. As you think about the D2C channel, was there any difference in performance between e-comm and the physical stores? And then with your opening of stores in 2026, where are those stores going to be located regionally? How do you think about it? And is there any difference in store size and where you're going? And then just lastly, for 2026 price increases, any particular way we should think about it or how you're thinking about pricing, whether it's on closed-toe, clogs, or open-toe for '26? Thank you.

Speaker #9: And then with your opening of stores in 2026, where are those stores going to be located regionally? How do you think about it, and is there any difference in size of store and where you're—

Speaker #9: And then going just lastly , for 2026 , price increases , any particular way we should think about it or how thinking about you're pricing , whether it's on closed toe or clogs or open toe for 26 .

Ivica Krolo: How do you think about it? And is there any difference in store size and where you're going? And then just lastly, for 2026 price increases, any particular way we should think about it or how you're thinking about pricing, whether it's on closed-toe, clogs, or open-toe for '26? Thank you. Hi, Dana. This is Niko. I'm going to take the first part of your question. So as you know, retail is a very important growth pillar for us. We are currently at 97 doors, adding 30 net new stores. Thus, we are actually holding our promise. We promised to come closer to 100. We're now very close to 100. What we also did is we actually accelerated the pace of our openings in the second half, adding 20 in the second half versus 10 in the first half.

Speaker #9: Thank you .

Speaker #5: Hi , Diana , this is Nico . I'm going to take the first part of your question . So as you know , retail is a very important growth for us .

Nico Bouyakhf: Hi, Dana. This is Niko. I'm going to take the first part of your question. So as you know, retail is a very important growth pillar for us. We are currently at 97 doors, adding 30 net new stores. Thus, we are actually holding our promise. We promised to come closer to 100. We're now very close to 100. What we also did is we actually accelerated the pace of our openings in the second half, adding 20 in the second half versus 10 in the first half. So really getting much more experienced in driving this expansion. Among others, we opened Milan, Mumbai, and Singapore, so really key cities and key connection points for our consumers. For next year, we have plans to add 40 more.

Speaker #5: Pillar currently at—we are 97 doors, adding 30 net new stores. And actually holding our—thus, we are promise. So we promise to be closer to 100.

Speaker #5: We're now at a close , very close to 100 . also did is we What we actually accelerated the pace of our openings in the second half , adding 20 in the second half versus ten in the first half .

Speaker #5: So really getting much more experienced in driving this expansion , amongst others , we opened Milan , Mumbai and Singapore . So really key cities and key connection points for our consumers for next year .

Ivica Krolo: So really getting much more experienced in driving this expansion. Among others, we opened Milan, Mumbai, and Singapore, so really key cities and key connection points for our consumers. For next year, we have plans to add 40 more. So that will bring us to 140, and that will bring us very well set up to reach a total goal that we stated of 150 stores by 2027. You know, whenever we open a store, they perform really well. So we are very, very disciplined with our openings and store locations selection. We will continue to find stores in the format of 100sq m, 150sq m, not AAA locations. We go right next to the AAA locations, and that is really driving the very healthy economics of each store. The new stores will continue to outperform the longer-standing ones.

Speaker #5: We have plans to add 40 more, so that will bring us to 140, and that will have us very well set up to reach the total goal that we stated of 150 stores by 2027.

So that will bring us to 140, and that will bring us very well set up to reach a total goal that we stated of 150 stores by 2027. You know, whenever we open a store, they perform really well. So we are very, very disciplined with our openings and store locations selection. We will continue to find stores in the format of 100sq m, 150sq m, not AAA locations. We go right next to the AAA locations, and that is really driving the very healthy economics of each store. The new stores will continue to outperform the longer-standing ones. We achieve higher average transaction value driven by higher ASP and more units per transaction. And all this while the same store sales are up high single digit. So you see that retail is the strongest growing channel and will also outpace in growth our digital channel.

Speaker #5: You by know , whenever we open a store , they perform really well . So we are very very , our disciplined with openings and store locations .

Speaker #5: We will continue with our selection to find stores in the format of hundred square meters, 150 m², not triple-A locations. We go right next to the triple-A locations, and that is really driving the healthy unit economics of each store.

Speaker #5: The new stores will continue to outperform the longer-standing ones as we achieve higher average transaction value, driven by higher ASP and more units per transaction.

Speaker #5: And all this , while the same store up high , sales are single digit . So you see that retail is the strongest growing channel .

Ivica Krolo: We achieve higher average transaction value driven by higher ASP and more units per transaction. And all this while the same store sales are up high single digit. So you see that retail is the strongest growing channel and will also outpace in growth our digital channel. With regards to digital, we do continue to see very, very strong growth opportunities in three areas: markets. So there are some underdeveloped markets, if you will, under-penetrated markets with regards to our digital, specifically in Asia and Middle East, where we launch later than in the more mature markets. With regards to consumers, we heard that young consumers, young demographics are under-penetrated by us. And so that accounts the same for our digital business. And then on the product side, our expansionary categories like shoes, closed-toe, EVA, professional are trending much, much better in our digital business.

Speaker #5: We'll also outpace in growth our digital channel. With regards to digital, we do continue to see very, very strong growth opportunities in markets.

With regards to digital, we do continue to see very, very strong growth opportunities in three areas: markets. So there are some underdeveloped markets, if you will, under-penetrated markets with regards to our digital, specifically in Asia and Middle East, where we launch later than in the more mature markets. With regards to consumers, we heard that young consumers, young demographics are under-penetrated by us. And so that accounts the same for our digital business. And then on the product side, our expansionary categories like shoes, closed-toe, EVA, professional are trending much, much better in our digital business. So this will also enable us to catch more demand and drive the business in our digital channel. So we'll see retail outpacing digital while we also see substantial growth coming in our digital channel.

Speaker #5: So, there are three areas. There are some underdeveloped markets, if you will—under-markets with regards to our digital, specifically in Asia and the Middle East, where we launched later than in the more mature markets.

Speaker #5: With regards to consumers , we heard that young consumers , young demographics are under-penetrated by us . And so does that . That accounts the same for our digital business .

Speaker #5: And then on the product side , our expansionary like shoes , categories toe , Eva professional are trending much , much better in our digital business .

Speaker #5: Will also enable us to catch more demand and drive business in our digital channel. So we'll see retail outpacing digital, while we also see substantial growth coming in in our digital channel.

Ivica Krolo: So this will also enable us to catch more demand and drive the business in our digital channel. So we'll see retail outpacing digital while we also see substantial growth coming in our digital channel. Hi, Dana. Ivica on the pricing part. So as you know, we are reviewing pricing on a season-by-season and style-by-style basis and are very surgical to increase prices throughout the product portfolio. And why we're doing that, again, it comes back to the fact that we are a manufacturing company. So we know what our input costs are. We know what labor does cost. We know what raw materials do cost. And this is very much a bottom-up exercise that we continue to do as we have done in the past to pass through inflationary pressures, while at the same time maintaining our globally aligned pricing structure. And any update on the Americas?

Speaker #5: If it's on the on the pricing part . So as you know , we are reviewing pricing on a season and season by style by style basis and are very surgical to increase prices throughout the product portfolio .

Ivica Krolo: Hi, Dana. Ivica on the pricing part. So as you know, we are reviewing pricing on a season-by-season and style-by-style basis and are very surgical to increase prices throughout the product portfolio. And why we're doing that, again, it comes back to the fact that we are a manufacturing company. So we know what our input costs are. We know what labor does cost. We know what raw materials do cost. And this is very much a bottom-up exercise that we continue to do as we have done in the past to pass through inflationary pressures, while at the same time maintaining our globally aligned pricing structure.

Speaker #5: And what that we're doing again, it comes back to the fact that we are a manufacturing company. So we know what our import costs are.

Speaker #5: We know what labor does cost , we know what raw materials do cost . And this is a very much a bottom , bottom up exercise that we continue to do as we have done , done in the past to pass through inflationary pressures while at the same time maintaining our globally aligned pricing structure .

Speaker #9: And any update on the Americas?

Dana Telsey: And any update on the Americas?

Speaker #1: Very strong holiday season , Dana . Hello , this is Oliver speaking very , very strong holiday season . I mean , do you do you check in wholesale doors , do the check in New York , in the store ?

Ivica Krolo: Very strong holiday season, Dana. Hello, this is Oliver speaking. Very, very strong holiday season. I mean, do your check in wholesale doors. Do the check in New York in the store. It's one of the must-have gifting items. We're very, very confident and very, very successful holiday season in the US. Thank you. Your next line comes from the line of Simon Siegel with Guggenheim Partners. Your line is open. Please go ahead. Hi, everyone. Morning and afternoon. Tim, we can barely hear you. We can barely hear you. You have digital dropouts. You dialed in on the landline, or? You appear to have some technical difficulties on Simon's line. We'll move to the next question. Your next question comes from the line of Adrian Duval with Goldman Sachs. Your line is open. Please go ahead. Hey, good morning, everyone. Thank you very much for taking my questions.

Oliver Reichert: Very strong holiday season, Dana. Hello, this is Oliver speaking. Very, very strong holiday season. I mean, do your check in wholesale doors. Do the check in New York in the store. It's one of the must-have gifting items. We're very, very confident and very, very successful holiday season in the US.

Speaker #1: It's one of the have gifting items. We're very, very confident and had a very, very successful holiday season in the US.

Speaker #9: Thank you .

Speaker #2: You are line comes next from the line Simon of Segal with Guggenheim partner . Your line is open . Please ahead go .

Dana Telsey: Thank you.

Operator: Your next line comes from the line of Simon Siegel with Guggenheim Partners. Your line is open. Please go ahead.

Speaker #10: Hey , Hey . everyone . Morning . Good afternoon . I had some .

Simeon Siegel: Hi, everyone. Morning and afternoon.

Ivica Krolo: Tim, we can barely hear you. We can barely hear you. You have digital dropouts. You dialed in on the landline, or?

Speaker #11: Issues .

Speaker #1: Damian , we can barely hear you . can We barely hear you . You have a digital drops out , drop outs . You dialed in on on landline a or .

Speaker #2: He appeared to have some technical difficulties on Simon's line. We'll move to the next question. Your question next comes from the line of Adrien Duverger with Goldman Sachs.

Operator: You appear to have some technical difficulties on Simon's line. We'll move to the next question. Your next question comes from the line of Adrian Duval with Goldman Sachs. Your line is open. Please go ahead.

Speaker #2: Your line is open. Go ahead, please.

Speaker #12: Hey , good morning . Good afternoon . Thank you very much for taking my questions . Still have one . Could you please comment on the on the performance of the new products and the opportunity for continued increase of the price mix , as well as the appetite for customers on the on the new products ?

Adrien Duverger: Hey, good morning, everyone. Thank you very much for taking my questions. So I have one. Could you please comment on the performance of the newer products and the opportunity for continued increase of the price mix as well as the appetite for customers on these new products? And I'll have a quick follow-up on that, which is on the share of sales from the closed-toe shoes. I think you're now at 38%. What are your expectations for the long-term share of sales from these? Thank you very much.

Ivica Krolo: So I have one. Could you please comment on the performance of the newer products and the opportunity for continued increase of the price mix as well as the appetite for customers on these new products? And I'll have a quick follow-up on that, which is on the share of sales from the closed-toe shoes. I think you're now at 38%. What are your expectations for the long-term share of sales from these? Thank you very much. Hey, Adrian. This is Nicola again. Thank you for your question. Great question, indeed. So what we definitely see is that our diversification of product offering is really paying off. Particularly, we are very pleased to see consumers adopting newer closed-toe silhouettes. So closed-toe is not just the Boston anymore. Non-Boston silhouettes are growing at the same pace as Boston. So we are truly diversifying our clog business.

Speaker #12: And I'll have a quick follow up on that , which is on the share of sales from the from the clothes to shoes .

Speaker #12: You're now, I think, at 38%. What are your expectations for the long-term share of sales from these? Thank you very much.

Speaker #5: Adrien , this is Nico Hey , again . your Thank you for question . Great indeed . We So what ? definitely see is that our diversification of product offering is really paying off .

Nico Bouyakhf: Hey, Adrian. This is Nicola again. Thank you for your question. Great question, indeed. So what we definitely see is that our diversification of product offering is really paying off. Particularly, we are very pleased to see consumers adopting newer closed-toe silhouettes. So closed-toe is not just the Boston anymore. Non-Boston silhouettes are growing at the same pace as Boston. So we are truly diversifying our clog business. We don't just own the sandals category. We now own the sandals and the clogs category. You'll continue to see closed-toe outperforming open-toe while open-toe is still growing. That is also something that we will actively drive forward. We'll bring back open-toe silhouettes. We'll rejuvenate open-toe silhouettes such as the Madrid, such as fine straps sandals, the Florida, the Mayari.

Speaker #5: Particularly, we are very pleased to see consumers adopting newer, closed-toe silhouettes. So closed toe is not just the Boston anymore.

Speaker #5: Non-Boston silhouettes are growing at the same pace as Boston. So we are truly diversifying our clog business, and we don't just own the sandals category.

Speaker #5: We now own the sandals, clogs, and the category. So you'll continue to see closed outperforming toe, while open toe is still growing.

Ivica Krolo: We don't just own the sandals category. We now own the sandals and the clogs category. You'll continue to see closed-toe outperforming open-toe while open-toe is still growing. That is also something that we will actively drive forward. We'll bring back open-toe silhouettes. We'll rejuvenate open-toe silhouettes such as the Madrid, such as fine straps sandals, the Florida, the Mayari. We'll give them more investment in product and give them more oxygen and daylight to let them flourish further. Where does closed-toe grow forward? Where does it go? You see that we have a very strong growth trajectory until now. We once said it will grow over 30%. We're now coming to 40% and even above. We'll definitely continue to see this growing further. Closed shoes as a market is a huge market for us.

Speaker #5: And that is also something that we've actively that we will drive actively we'll forward . So back open toe silhouettes . We'll rejuvenate , open toe silhouettes such as the Madrid , such as fine strap sandals , the Florida , the Miami .

Speaker #5: So we'll give them more product and investment, and give them more oxygen and daylight to let them flourish further. So, where does Close to Grow forward?

We'll give them more investment in product and give them more oxygen and daylight to let them flourish further. Where does closed-toe grow forward? Where does it go? You see that we have a very strong growth trajectory until now. We once said it will grow over 30%. We're now coming to 40% and even above. We'll definitely continue to see this growing further. Closed shoes as a market is a huge market for us. Again, we see new silhouettes being adopted by our consumers very fast, like the Uji, Highwood, and we're also further diversifying that business into different platforms. Boots are performing very strong during the winter season. High price points. Consumers are not shying away from these products. And again, particularly in our DTC, you'll see these categories trending very well.

Speaker #5: Where does it go? You see that we have a very strong growth trajectory. Until now, we think it will grow over 30%.

Speaker #5: once said now We're coming to 40% . And even above , and we'll definitely continue to see this growing further . Closed shoes as a market is for us .

Speaker #5: once said now We're coming to 40% . And even above , and we'll definitely continue to see this growing further . Closed shoes as a market is for a huge market Again , we see new silhouettes being adopted by our very consumers fast , like the UT .

Speaker #5: Hi . And we are also further diversifying that business into different platforms . Boots are performing very strong during the winter season . High price points , consumers are not shying away from these products .

Ivica Krolo: Again, we see new silhouettes being adopted by our consumers very fast, like the Uji, Highwood, and we're also further diversifying that business into different platforms. Boots are performing very strong during the winter season. High price points. Consumers are not shying away from these products. And again, particularly in our DTC, you'll see these categories trending very well. Okay. Thank you very much. And maybe just on what I have you, what's the opportunity that you see from further pricing? So I think you mentioned you expect about 10% volume growth over the next few years. So should we assume that there is between the three to five remaining is from price list and price mix? Is that how we should think about it? Hi, Adrian. It's Ivica. Happy to take your question. So it's certainly a combination of both.

Speaker #5: And again, particularly in our DTC, you'll see these categories trending very well.

Speaker #12: Okay . Thank you very And much . maybe just on what I have you what's the opportunity that you see from from further price mix .

Adrien Duverger: Okay. Thank you very much. And maybe just on what I have you, what's the opportunity that you see from further pricing? So I think you mentioned you expect about 10% volume growth over the next few years. So should we assume that there is between the three to five remaining is from price list and price mix? Is that how we should think about it?

Speaker #12: So I think you mentioned you expect about 10% , 10% volume growth over the next few over the years . So should we assume that there is you between , know , like the three , the 3 to 5 remaining is from , you know , price list and price mix .

Speaker #12: Is that how we should think about it?

Speaker #5: Hi , Adrian .

Speaker #13: It's happy to take your your question . So it's certainly combination a of both . looking So back to 2025 , if you growth , disaggregate mix of it's a two thirds .

Ivica Krolo: Hi, Adrian. It's Ivica. Happy to take your question. So it's certainly a combination of both. So looking back to 2025, if you disaggregate growth, it's a mix of 2/3 with regards to units and 1/3 with regards to ASP. Certainly, a positive contributor to higher ASP is definitely the mix shift that we are seeing. So consumers are choosing intentionally higher quality and premium execution, including closed-toe, as Nicola mentioned. And clearly, this will be driving ASP besides, of course, that we will continue to take targeted like-for-like pricing.

Speaker #13: With regards to unit and one third with regards to ASP. Certainly, a positive contributor to higher ASP is definitely the mix shift that we are seeing.

Ivica Krolo: So looking back to 2025, if you disaggregate growth, it's a mix of 2/3 with regards to units and 1/3 with regards to ASP. Certainly, a positive contributor to higher ASP is definitely the mix shift that we are seeing. So consumers are choosing intentionally higher quality and premium execution, including closed-toe, as Nicola mentioned. And clearly, this will be driving ASP besides, of course, that we will continue to take targeted like-for-like pricing. Thank you very much. Your next question comes from the line of Mark Altschwager with Baird. Your line is open. Please go ahead. Kind reminder to press star six to unmute. Hi, can you hear me? Yes, loud and clear. Wonderful. Thank you for taking the question.

Speaker #13: So, consumers are choosing intentionally higher quality and premium execution, including closed store, as Nico mentioned, and clearly this will be driving ASP.

Speaker #13: Besides, of course, that we continue to take targeted, like-for-like pricing.

Speaker #12: you very Thank much .

Speaker #2: Next, your question comes from the line of Altschwager with Baird. Your line is open. Please go ahead. Kind reminder to press star six to unmute.

Adrien Duverger: Thank you very much.

Operator: Your next question comes from the line of Mark Altschwager with Baird. Your line is open. Please go ahead. Kind reminder to press star six to unmute.

Speaker #14: Hi, can you hear me?

Speaker #1: Yes . Loud and clear

Mark Altschwager: Hi, can you hear me?

Speaker #1: .

Speaker #14: you for taking the Wonderful . Thank question . With respect to sustaining the mid-teens growth over the next 3 to 5 years , can you talk a bit more about what's giving you the confidence that you can continue to add capacity at a fast enough rate to support that growth ?

Ivica Krolo: Yes, loud and clear.

Mark Altschwager: Wonderful. Thank you for taking the question. With respect to sustaining the mid-teens growth over the next three to five years, can you talk a bit more about what's giving you the confidence that you can continue to add capacity at a fast enough rate to support that growth as the base gets larger, especially as it relates to both labor and components suppliers? And then as a follow-up, you talked about new capacity expansion for the core product, and demand is skewing towards the higher-end product. Can you give us a sense of how EVA is trending and how the capacity that you've added in Pasewalk is playing into the growth algorithm? Thank you.

Ivica Krolo: With respect to sustaining the mid-teens growth over the next three to five years, can you talk a bit more about what's giving you the confidence that you can continue to add capacity at a fast enough rate to support that growth as the base gets larger, especially as it relates to both labor and components suppliers? And then as a follow-up, you talked about new capacity expansion for the core product, and demand is skewing towards the higher-end product. Can you give us a sense of how EVA is trending and how the capacity that you've added in Pasewalk is playing into the growth algorithm? Thank you. Thank you for your question.

Speaker #14: base larger gets , especially as it relates to both labor and components suppliers . And then as a follow up , you talked about new capacity expansion for the core product , and demand is towards skewing the higher end product .

Speaker #14: Can you give us a sense of how EVA is trending, and how the capacity that you've added is playing into the growth? Thank you.

Speaker #14: .

Speaker #1: your question Thank you for . As I said , you know , in the in the previous answer , the first question from Matt Boss , we are heavily increasing our pre-production facility in Portugal , which is really a key thing for us to to speed up the processes speed and up the go to market sequence from our products .

Ivica Krolo: Thank you for your question. As I said in the previous answer for the first question from Matt Boss, we are heavily increasing our pre-production facility in Portugal, which is really a key thing for us to speed up the processes and speed up the go-to-market sequence from our products. Just keep in mind that in the near future, we probably have a half-finished goods warehouse where we simply collect all the uppers and then finally push them into final assembly when needed. Then the reaction time of this company to be in the market with the right article, the right color is very, very significant faster than today. The acquisition of Wittichenau near Dresden, the factory we bought, like 80,000sq m for EUR 18 million. This will be ready in 2027, more or less.

Ivica Krolo: As I said in the previous answer for the first question from Matt Boss, we are heavily increasing our pre-production facility in Portugal, which is really a key thing for us to speed up the processes and speed up the go-to-market sequence from our products. Just keep in mind that in the near future, we probably have a half-finished goods warehouse where we simply collect all the uppers and then finally push them into final assembly when needed. Then the reaction time of this company to be in the market with the right article, the right color is very, very significant faster than today. The acquisition of Wittichenau near Dresden, the factory we bought, like 80,000sq m for EUR 18 million. This will be ready in 2027, more or less.

Speaker #1: And just keep in mind that , you know , in the near future probably we a , have you half finished know , goods warehouse where we simply all the collect uppers and , then finally push and them final into assembly when needed .

Speaker #1: And then we reaction time the of this company to be in the market with the right the right door article at is , is very significant , faster today than .

Speaker #1: Now, you know, the acquisition of Dresden – the factory we bought near there is like 80,000 m² for €18 million. This will be ready in '27, more or less.

Speaker #1: And then , you can know , they fill the gap lines because assembly that's the of final at the moment . said As I latex backing .

Ivica Krolo: And then they can fill the gap of final assembly lines because that's the bottleneck at the moment, as I said, and cork-latex footbed making. Last but not least, I think you were in Pasewalk with us. The same space in Pasewalk next to us is about to be converted into a construction area. And there will be another 80,000 sq m of production space. And we will definitely keep a very high flexibility within these spaces to react on the different perspective of the markets. And you mentioned the EVA in Pasewalk. We're very happy with the EVA development, especially in what we called elevated EVA. One example is just the Big Buckle EVA that's performing very well. But keep in mind, globally, we keep our EVA around maximum 20% share of business here. So it's a very planned, high-scarcity executed model from the EVA perspective.

And then they can fill the gap of final assembly lines because that's the bottleneck at the moment, as I said, and cork-latex footbed making. Last but not least, I think you were in Pasewalk with us. The same space in Pasewalk next to us is about to be converted into a construction area. And there will be another 80,000 sq m of production space. And we will definitely keep a very high flexibility within these spaces to react on the different perspective of the markets. And you mentioned the EVA in Pasewalk. We're very happy with the EVA development, especially in what we called elevated EVA. One example is just the Big Buckle EVA that's performing very well. But keep in mind, globally, we keep our EVA around maximum 20% share of business here. So it's a very planned, high-scarcity executed model from the EVA perspective.

Speaker #1: Footbed, but not, you know, I think we're in with you. Us, the same space next to us is about to be into a converted construction area.

Speaker #1: And there will be another production—80,000 m² of space—and we will definitely keep a very high flexibility within these spaces to react to the different perspectives of the markets.

Speaker #1: And you mentioned the Eva we and very happy Eva with the development , in the especially what we called elevated Eva . One example is big buckle just the that's Eva performing very mind , you but know , globally we keep in our keep Eva around maximum 20% share of here .

Speaker #1: business So it's a it's a it's very planned high scarcity model executed Eva perspective . And in Asia the very strong growth is .

Speaker #1: Highest ASP in—that's a very important message, I would say, because that's very rare, that you create as a brand, highest ASP in the APAC region.

Ivica Krolo: In Asia, the growth is very strong. Highest ASP in Asia. That's a very important message, I would say, because that's very rare that you create as a brand the highest ASP in the APAC region. That's what we're doing. And they are ready for this PU products, direct injected, in molds, textile uppers, leather uppers, you name it. And all this will definitely come from Pasewalk. Thank you. Your next question comes from the line of Sam Poser with Williams Trading. Your line is open. Please go ahead. Thank you for taking my question. Can you all hear me? Yes, we can hear you, Sam. So we have 14 days or 13 days left in Q1. Can you give us an update on what Q1 looks like in more specifics? I mean, the quarter's over pretty much. So just wondering.

In Asia, the growth is very strong. Highest ASP in Asia. That's a very important message, I would say, because that's very rare that you create as a brand the highest ASP in the APAC region. That's what we're doing. And they are ready for this PU products, direct injected, in molds, textile uppers, leather uppers, you name it. And all this will definitely come from Pasewalk.

Speaker #1: That's what we're . And doing they are this ready for Pu products direct injected molds in , textile uppers , leather uppers , you name it .

Speaker #1: This will definitely come from.

Speaker #14: Thank you .

Speaker #2: Next, your question comes from the line of Sam Poser with Williams Trading. Your line is open, please go ahead.

Mark Altschwager: Thank you.

Operator: Your next question comes from the line of Sam Poser with Williams Trading. Your line is open. Please go ahead.

Speaker #15: Thank you. Can you all hear me? Am I coming through?

Sam Poser: Thank you for taking my question. Can you all hear me? Yes, we can hear you, Sam. So we have 14 days or 13 days left in Q1. Can you give us an update on what Q1 looks like in more specifics? I mean, the quarter's over pretty much. So just wondering. I know you said business is very good and so on. But could you give us some details on what the quarter looks like, please? That's number one, in more specifics? Sam, can I quickly jump in and give you the first answer? Yes. This is Oliver. Okay. So you should expect, I mean, you know, Q1 is our smallest quarter, but it will be well above our guidance. Okay? So easy. From a margin and from a revenue growth perspective, or in what respect?

Speaker #13: Yes, we can hear you. Sam.

Speaker #16: So I just, we have 14.

Speaker #15: Days or 13 days left in Q1 in . Can us an , you give like an update on what Q1 looks like in more specifics ?

Speaker #15: I mean, the quarter is over pretty much. So just wondering, I know you said business is very good and so on, but could you give us some details on what this quarter looks like, please?

Ivica Krolo: I know you said business is very good and so on. But could you give us some details on what the quarter looks like, please? That's number one, in more specifics? Sam, can I quickly jump in and give you the first answer? Yes. This is Oliver. Okay. So you should expect, I mean, you know, Q1 is our smallest quarter, but it will be well above our guidance. Okay? So easy. From a margin and from a revenue growth perspective, or in what respect? Sam, this is Ivica speaking. Oliver is referring to top line. And in terms of margin, we're not pre-announcing margin for Q1 yet. Okay. Do you anticipate doing that prior to ICR or at ICR? No, we're not going to do that. Okay. We will give more details, Sam, though, at our capital markets day, end of January. Okay.

Speaker #15: Is number one in more, like, specifics?

Speaker #1: quickly Sam , can I jump in and give you the first answer ? Yes , yes . Oliver . Okay , you should so expect I mean , you know , our Q1 is quarter , but it will be well above our guidance So .

Speaker #1: easy

Speaker #15: From a from a from a from a revenue growth perspective or in what respect ?

Speaker #13: Sam, this is easy to speak. All of this is referring to top line in terms of margin pre-announcing. And for Q1 yet.

Ivica Krolo: Sam, this is Ivica speaking. Oliver is referring to top line. And in terms of margin, we're not pre-announcing margin for Q1 yet. Okay. Do you anticipate doing that prior to ICR or at ICR? No, we're not going to do that. Okay. We will give more details, Sam, though, at our capital markets day, end of January.

Speaker #15: Okay. Do you anticipate doing that prior to ICR, or at ICR?

Speaker #13: No, we're not going to do that.

Speaker #13: We’re okay. We’ll give more detail, Sam, though, at Capital Markets Day, at the end of our January.

Speaker #17: Okay .

Speaker #15: And then, secondly, I just want to focus on the factories. There's been a conversation about that within. And Gurlitt, Portugal.

Sam Poser: Okay. And then secondly, I just want to focus on the factories. There's been lots of conversations about that. Within Pasewalk, Görlitz, and Portugal, how the existing framework of your production? You had recently said that I believe going into Q3 2026, you expected those production facilities to be pretty much optimized given all the changes. Now, it's not to say you're not doing other things, expanding Pasewalk and the new factory near Dresden. But within that framework, is that still the same expectation? And should we expect production capacity to increase going into the back half of fiscal 2026?

Ivica Krolo: And then secondly, I just want to focus on the factories. There's been lots of conversations about that. Within Pasewalk, Görlitz, and Portugal, how the existing framework of your production? You had recently said that I believe going into Q3 2026, you expected those production facilities to be pretty much optimized given all the changes. Now, it's not to say you're not doing other things, expanding Pasewalk and the new factory near Dresden. But within that framework, is that still the same expectation? And should we expect production capacity to increase going into the back half of fiscal 2026? Sam, this is Oliver speaking. There will be no big impacts other than optimization within our existing structure. But within 2026, all the machines are ordered.

Speaker #15: . .

Speaker #15: The existing framework of your production , you How had currently recently that I into going believe said Q3 you expect 26 , that those production facilities to be pretty much optimized , given all the changes .

Speaker #15: Now , it's not to say you're not doing other things . You know , expanding pasta walk and and the new near factory Dresden .

Speaker #15: But within that framework, is that still the same expectation? And should we expect production capacity to increase going back into the end of fiscal '26?

Speaker #1: Sam , does Oliver speaking ? There will be no big impacts , you know , other than within optimization our existing structure . But within 26 , you know , all the machines are ordered .

Oliver Reichert: Sam, this is Oliver speaking. There will be no big impacts other than optimization within our existing structure. But within 2026, all the machines are ordered. So we're waiting for the machines to come, and then we have to implement them, and then we have to roll them out, find the workforce. So it is a constant optimization, of course. And we're constantly on the edge of the capacity, as you know, blowing every single horn that's available. But it is really tough at the moment. And the big capacity push will come once Wittichenau is online to deliver output from a cork-latex standpoint and very urgently needed from a final assembly standpoint. The construction site in Pasewalk will be a longer game because that's simply grassland at the moment.

Speaker #1: we're So waiting for machines to come . And then we have to the implement them , and then we have to roll them out , find the workforce .

Ivica Krolo: So we're waiting for the machines to come, and then we have to implement them, and then we have to roll them out, find the workforce. So it is a constant optimization, of course. And we're constantly on the edge of the capacity, as you know, blowing every single horn that's available. But it is really tough at the moment. And the big capacity push will come once Wittichenau is online to deliver output from a cork-latex standpoint and very urgently needed from a final assembly standpoint. The construction site in Pasewalk will be a longer game because that's simply grassland at the moment. So we have to build the building first. So that's on the mid-term perspective. And Portugal is ongoing. And Portugal will double or triple their capacity from pre-production and manufacturing standpoint, which is a huge amount. Okay?

Speaker #1: So it is constant a optimization of constantly , you know , on the edge of the capacity , as you know , blowing every single horn , you know , that's available .

Speaker #1: it's But really it is really tough at the moment . And , you know , the big the big capacity push will come once now is on the net to deliver output from a LaTeX standpoint .

Speaker #1: And very urgently needed from a final assembly standpoint. The construction side in Parzival longer game because that's grassland at the simply moment.

Speaker #1: So we have to we have to build the , the , the building first . So that's on the on the mid-term perspective and and is Portugal ongoing and Portugal will double or triple their capacity from pre-production and manufacturing standpoint , which is a amount .

So we have to build the building first. So that's on the mid-term perspective. And Portugal is ongoing. And Portugal will double or triple their capacity from pre-production and manufacturing standpoint, which is a huge amount. Okay? But it is also in the ramp-up scenario. We need to order lines, machines, and stuff. It's all done. But ramping up workforce, especially in this very complicated stuff like stitching, lasting, and all this, it's not that quick.

Speaker #1: It's huge. But it also is in the ramp-up scenario. We need to order lines, machines, and stuff. It's all but done.

Ivica Krolo: But it is also in the ramp-up scenario. We need to order lines, machines, and stuff. It's all done. But ramping up workforce, especially in this very complicated stuff like stitching, lasting, and all this, it's not that quick. Your next question comes from the line of Paul Lejuez with Citi. Your line is open. Please go ahead. A kind reminder to unmute yourself locally. Hey, hopefully you can hear me now, hopefully. Hey, Paul. We can hear you loud and clear. Hey. Sorry about that. Curious about your regional plans for FY26. I think you talked about APAC being up 10%. Curious how that looks by region, how you're thinking about the three big regions. And also curious if, given your capacity constraints, if you're having to restrict your distribution in certain regions. I think you had to do that once with EMEA.

Speaker #1: ramping up workforce , especially in this , you know , very . Complicated stuff like stitching as Schilling and all this . It's not that quick .

Speaker #1: You know .

Speaker #2: Your next question comes from the line of Paul Lisieux with Your line is open . Citi . go ahead . I kind reminder to unmute yourself locally .

Operator: Your next question comes from the line of Paul Lejuez with Citi. Your line is open. Please go ahead. A kind reminder to unmute yourself locally.

Paul Lejuez: Hey, hopefully you can hear me now, hopefully.

Speaker #18: Hey, hopefully you can hear me now. Hopefully.

Speaker #1: Hey, Paul, we can hear you loud and clear.

Speaker #18: Hey , sorry about that . Curious about your regional plans for F26 ? I think you talked about pairs being up 10% . Curious how that looks by region , how you're thinking about the three big regions and also curious if given your capacity constraints , if you're having to restrict your distribution in certain in regions , I think you had to do that once with Atma .

Oliver Reichert: Hey, Paul. We can hear you loud and clear.

Paul Lejuez: Hey. Sorry about that. Curious about your regional plans for FY26. I think you talked about APAC being up 10%. Curious how that looks by region, how you're thinking about the three big regions. And also curious if, given your capacity constraints, if you're having to restrict your distribution in certain regions. I think you had to do that once with EMEA. Curious if you're facing that again now?

Speaker #18: Curious if you're facing that again now.

Speaker #1: you for your Thank question , Paul . You completely right . I mean , this is the basement of our of our distribution It's strategy .

Ivica Krolo: Curious if you're facing that again now? Thank you for your question, Paul. You're completely right. I mean, this is the basis of our distribution strategy. It's engineered distribution. So with the lens of margin perspective on the different regions, Americas, Europe, and APAC, and I said it before, highest ASP is coming from the APAC region. Yes, we definitely will shift more product into this region to further develop the strength of the brand. They're growing very nicely. Best-in-class quality. That's an important thing. And I know you guys heard a lot of success stories in Asia, but they are always margin dilutive. They're always low ASPs, and they're always mass-driven. So it's the opposite with executing in APAC. And this is now relatively low-hanging fruit for us to shift also capacity into Asia and making sure these territories are well developed over time.

Oliver Reichert: Thank you for your question, Paul. You're completely right. I mean, this is the basis of our distribution strategy. It's engineered distribution. So with the lens of margin perspective on the different regions, Americas, Europe, and APAC, and I said it before, highest ASP is coming from the APAC region. Yes, we definitely will shift more product into this region to further develop the strength of the brand. They're growing very nicely. Best-in-class quality. That's an important thing. And I know you guys heard a lot of success stories in Asia, but they are always margin dilutive. They're always low ASPs, and they're always mass-driven. So it's the opposite with executing in APAC. And this is now relatively low-hanging fruit for us to shift also capacity into Asia and making sure these territories are well developed over time.

Speaker #1: engineered distribution . So with the with the light of , you know , margin perspective on the different regions , Americas , Europe and APAC .

Speaker #1: And I said it before . you know , A , highest ASP is coming from the APAC region . Yes , we definitely will shift more product into this region to further develop the strength of the brand .

Speaker #1: They they are growing very nicely . Best in class quality . That's an important thing , you know , and I know you guys heard a lot of success stories in Asia , but they are always margin dilutive .

Speaker #1: They're always low . ASPs and they're always math driven . So it's the opposite with executing in APAC . And this is now , you know , relatively low hanging fruit for us to to shift .

Speaker #1: Also capacity into into Asia . And making sure these territories are well developed over time . And keep in mind , you know what we said at the at pre-IPO , our ideal world , not mid-term , but long term will be one third business share .

Ivica Krolo: Keep in mind what we said at pre-IPO, our ideal world, not midterm, but long-term, will be 1/3 business share Americas, 1/3 business share Europe, and 1/3 APAC. Right now in APAC, we are at 11%. So yes, there's a lot of things we can do, and we should continue doing. And it's very encouraging what we see in this region. Impacts of tariffs and effects are not that bad in this region. So yeah, it's the right direction. And you're completely right. Any color you can give around the different growth rates by region, just tied to your guidance, full of your guidance for the year? APAC is twice the speed compared to the rest of the world. But that's steered. It could be quicker, but that's what we're doing.

Keep in mind what we said at pre-IPO, our ideal world, not midterm, but long-term, will be 1/3 business share Americas, 1/3 business share Europe, and 1/3 APAC. Right now in APAC, we are at 11%. So yes, there's a lot of things we can do, and we should continue doing. And it's very encouraging what we see in this region. Impacts of tariffs and effects are not that bad in this region. So yeah, it's the right direction. And you're completely right. Any color you can give around the different growth rates by region, just tied to your guidance, full of your guidance for the year? APAC is twice the speed compared to the rest of the world. But that's steered. It could be quicker, but that's what we're doing.

Speaker #1: America's one third business share is Europe, and one third APAC. And right now in APAC, we are at 11%. So yes, there's a lot of things we can do, and we should continue doing.

Speaker #1: And it's very encouraging what we see in this region. Impacts of tariffs and effects are not that bad in this region. So yeah, it's the right direction and you're completely right.

Speaker #18: Any color you can give around the different growth rates by region, just tied to your guidance, full-year guidance for the year?

Speaker #1: Hey Peg , it's twice the speed of compared to the rest of the world . But that's steered . It could be quicker .

Speaker #1: But that's what we're doing . That's how we you know it's also the steering is coming from our capacity restrictions because honestly speaking , if I have 10 million pairs of clocks right now , available I can send them over to Asia and they are gone in a week .

Ivica Krolo: That's how we. It's also the steering is coming from our capacity restrictions because, honestly speaking, if I have 10 million pairs of clogs available right now, I can send them over to Asia, and they are gone in a week. So this is not the issue. I know it sounds super weird, but Paul, believe me, we are not demand constrained. It's all about the capacity. If we don't have enough product, we cannot deliver anything. Got it. Good luck, guys. Happy holidays. Thank you. Same to you. We have time for one last question, and that comes from the line of Janine Stichter with BTIG. Your line is open. Please go ahead. Hi. Yeah. I wanted to ask a bit more about the B2B expansion. I think in the past, you've pointed to the long-term opportunity at about 5,000 doors on the base of around 12,000.

That's how we. It's also the steering is coming from our capacity restrictions because, honestly speaking, if I have 10 million pairs of clogs available right now, I can send them over to Asia, and they are gone in a week. So this is not the issue. I know it sounds super weird, but Paul, believe me, we are not demand constrained. It's all about the capacity. If we don't have enough product, we cannot deliver anything.

Speaker #1: So this is not , you know , the the , as I know issue it super sounds weird , but Paul , believe are not demand constrained .

Speaker #1: It's all about the capacity. We don't have enough product. We cannot deliver anything.

Speaker #18: Got it. Good luck, guys. Happy holidays.

Speaker #1: Thank you. You, same to you.

Paul Lejuez: Got it. Good luck, guys. Happy holidays.

Speaker #2: We have time for one last question, and that comes from the line of Janine Stitcher with BT. Janine, your line is open.

Oliver Reichert: Thank you. Same to you.

Operator: We have time for one last question, and that comes from the line of Janine Stichter with BTIG. Your line is open. Please go ahead.

Speaker #2: Please go ahead .

Speaker #19: Hi . Yeah , I wanted to ask a bit more B2B about the expansion . I think in the past you pointed to the long term opportunity to add about 5000 doors on a base of around 12,000 .

Janine Stichter: Hi. Yeah. I wanted to ask a bit more about the B2B expansion. I think in the past, you've pointed to the long-term opportunity at about 5,000 doors on the base of around 12,000. What would the timeline look like on this, especially given the capacity constraints? And how should we think about that as a near-term driver of B2B growth? Just wondering if there's any change to what we've seen recently with 90% of B2B growth coming from existing doors. Thank you.

Speaker #19: What would the timeline look like on this? Especially given the capacity constraints? And how should we think about that as a near-term driver of B2B growth?

Ivica Krolo: What would the timeline look like on this, especially given the capacity constraints? And how should we think about that as a near-term driver of B2B growth? Just wondering if there's any change to what we've seen recently with 90% of B2B growth coming from existing doors. Thank you. Hey, this is Nicole. Thank you for your question. Yes, we said there is an opportunity for us when we select the right doors that are 5,000 that are under-penetrated by now. So far, we've been very, very disciplined in our distribution, our B2B. So since IPO, we didn't add any major number of partners at all. So growth is really coming from within through a broader assortment, through a deeper assortment that our partners are enjoying while maintaining a full-price realization of above 90%.

Speaker #19: Just wondering if there's any change to what we've seen recently, with 90% of B2B growth coming from existing doors? Thank you.

Speaker #5: Hey , this is Nicole . Thank you for your question . Yes , we said there is an opportunity for us when we right doors select the that are 5000 , that are under-penetrated by now .

Nico Bouyakhf: Hey, this is Nicole. Thank you for your question. Yes, we said there is an opportunity for us when we select the right doors that are 5,000 that are under-penetrated by now. So far, we've been very, very disciplined in our distribution, our B2B. So since IPO, we didn't add any major number of partners at all. So growth is really coming from within through a broader assortment, through a deeper assortment that our partners are enjoying while maintaining a full-price realization of above 90%. We're going to stay very close to that discipline while we also unlock new areas of distribution, particularly in sport as a recovery opportunity for our footbed, but also in the outdoors area.

Speaker #5: So far , we've been very , very disciplined in our distribution and our B2B . since So IPO , we didn't add any major of number partners at all .

Speaker #5: So growth is really coming from within, through a broader assortment to a deeper assortment, that our partners are enjoying, while maintaining a full price realization of above 90%.

Speaker #5: And we're going to stay very close to that discipline , while we also unlock new areas of distribution , particularly in sport . As a recovery opportunity for our footbed , but also in the outdoors area .

Ivica Krolo: We're going to stay very close to that discipline while we also unlock new areas of distribution, particularly in sport as a recovery opportunity for our footbed, but also in the outdoors area. That is something that will bring us a small amount of doors, again, very carefully selected, that we will increase in fiscal 2026 in those two areas. But rest assured, we'll look at full-price realization. We look at stock-to-sales ratio, and we'll not put too much pressure out there with regards to our own DTC. All for color. Thanks a lot. This does conclude today's call. Thank you for attending. You may now disconnect. Goodbye.

Speaker #5: So that is something that will bring us a small amount of doors again, very carefully selected, that we will increase in fiscal '26.

That is something that will bring us a small amount of doors, again, very carefully selected, that we will increase in fiscal 2026 in those two areas. But rest assured, we'll look at full-price realization. We look at stock-to-sales ratio, and we'll not put too much pressure out there with regards to our own DTC.

Speaker #5: And those two areas . But rest assured , we'll look at full price realization . We look at stock to sales ratio and we'll not put too much pressure out there with regards to our own DTC .

Speaker #19: Helpful color. Thanks a lot.

Janine Stichter: All for color. Thanks a lot.

Operator: This does conclude today's call. Thank you for attending. You may now disconnect. Goodbye.

Q4 2025 Birkenstock Holding PLC Earnings Call

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