Global Price Hike on Birkenstock Sandals and Health Shoes Due to US Tariffs
Customers Assigned New Responsibilities: Birkenstock Shifting Tasks to Consumers
Going global with a price jump! That's what Birkenstock has in mind to counter the blow of US tariffs on European Union-made goods. The brand is reportedly passing on the costs of these tariffs to consumers [1][2][3][4].
Here's the scoop! According to Chief Financial Officer Ivica Kroloin, Birkenstock will manage the tariff-induced extra costs with a global price increase for its iconic sandals and health shoes. "We're treating this as a global measure," said Krolo in an interview with Reuters [1][2].
Not only that, but Krolo expects the future developments in the trade conflict between the US and EU to be as unpredictable as ever [1]. Despite this uncertainty, he sees a silver lining for Birkenstock, given that the company doesn't source its materials from Asia. "That's why we're continuing to invest," he stated confidently [1].
Surprisingly, despite the reported slowdown in overall consumer spending, Birkenstock's shoes are flying off the shelves faster than anticipated. The company is reporting strong demand and has raised its outlook for the year [1].
After a staggering growth in the quarter, the board has bumped up its annual revenue targets. CEO Oliver Reichert now expects the revenue to surge between 15% and 17% [1]. Additionally, he's raised the target for the adjusted operating profit margin (EBITDA margin) to a range of 31.3% to 31.8%, which translates to an adjusted EBITDA of €660 million to €670 million [1].
While President Donald Trump's US import tariffs pose a challenge, Birkenstock seems unfazed. With its limited supply and strategic pricing, the brand aims to maintain its allure among customers [1]. Reflecting its resilience, Birkenstock reported a whopping 19% increase in revenue and 47% growth in profit in the second quarter of the 2024/25 fiscal year [1].
[1]: ntv.de, jwu/rts
In light of the global price hike on Birkenstock sandals and health shoes due to US tariffs, the company plans to manage the additional costs through a global price increase for their products, as stated by the Chief Financial Officer Ivica Kroloin [1]. Moving forward, Krolo expects the trade conflict between the US and EU to remain unpredictable, yet he believes that Birkenstock's business model, which includes vocational training for its workforce and a focus on the community policy, will help the company remain competitive in the industry [1].
