Birkenstock targets double-digit growth amid ambitious store expansion
German footwear maker outlines 13-15% revenue CAGR through 2028 as it expands retail footprint and production capacity
Birkenstock Holding plc has unveiled an ambitious three-year growth strategy, targeting double-digit revenue expansion through 2028 as the German footwear maker accelerates its retail footprint and production capacity. The company, which went public in October 2023, reported preliminary fiscal first-quarter revenue of €402 million, representing 11.1% growth at constant currency compared with the prior year.
Adjusted earnings per share surged 50% to €0.27, while adjusted EBITDA reached €106 million with a 26.5% margin, demonstrating what the company described as "strong operating leverage." The preliminary results, announced at Birkenstock's Capital Markets Day in New York on Tuesday, came alongside FY26 revenue guidance of €2.30-2.35 billion and a medium-term target of 13-15% constant-currency revenue CAGR for the 2026-2028 period.
The company's growth strategy rests on three pillars: retail expansion, production capacity investment, and product diversification beyond its iconic sandals. Birkenstock plans to grow its owned retail fleet to approximately 45 stores in the Americas by fiscal 2028, representing 30 net incremental locations. In Europe, the Middle East and Africa, the company aims to double its store presence to about 80 stores, while targeting more than 400 locations across Asia-Pacific through both owned and partner retail.
"All regions and channels experienced double-digit constant-currency revenue growth," the company stated in its regulatory filing. Management emphasized that its B2B wholesale business remains a strategic asset rather than a weakness, providing high visibility with order books stretching 5-9 months ahead.
To support this expansion, Birkenstock is investing heavily in manufacturing infrastructure. The company allocated €85 million to expand production capacity in 2025 and plans to invest an additional €110-130 million in 2026. A key initiative includes the acquisition of a new production facility near Dresden, Germany, for €18 million, expected to boost sandal output by the end of fiscal 2027 and address production bottlenecks.
The growth targets, however, account for significant headwinds. Birkenstock's guidance incorporates an estimated 200 basis points of pressure from U.S. tariffs and unfavorable foreign exchange movements. The company projects adjusted gross margins of 57.0-57.5% for FY26 and adjusted EBITDA margins of 30.0-30.5%, reflecting these tariff and currency impacts.
Analyst reactions to the Capital Markets Day presentation have been mixed. While the long-term outlook received praise for its ambition and detail, some firms adjusted near-term expectations. Morgan Stanley lowered its price target to $47 from $57, citing "uncertainties around the medium term growth algorithm." The stock, which traded at $38.10 in afternoon trading Wednesday, has declined approximately 6% over the past two sessions.
Despite the near-term volatility, the broader analyst community remains positive on Birkenstock's prospects. According to market data, 18 analysts rate the stock a buy or equivalent, compared with four hold recommendations and no sell ratings. The consensus target price stands at $59.47, implying significant upside from current levels.
Birkenstock's strategy reflects a broader trend among luxury and premium consumer brands seeking to gain greater control over their distribution and customer experience through direct-to-consumer channels. The company, which traces its roots to 1774, has successfully transformed from a niche orthopedic footwear maker into a global luxury brand, particularly under the ownership of private equity firm L Catterton, which acquired a majority stake in 2021 before taking the company public.
The company's vertically integrated supply chain, with production concentrated in Europe, has become a competitive advantage in an era of supply chain disruptions, according to management. The model provides control over product quality, agility in responding to demand, resilience against external shocks, and margin generation capabilities.
Looking ahead, investors will be watching Birkenstock's execution on its store expansion targets and its ability to maintain pricing power in an increasingly competitive footwear market. The company's goal of generating approximately €1 billion in incremental revenue by FY28 represents a bold bet that demand for its premium, comfort-focused footwear will continue to grow across global markets.