Worldwide Price Hike on Birkenstock Sandals Due to US Tariffs
Increases in Customers' Costs due to Birkenstock's Implementation of Tariffs
In a bold move, Birkenstock has decided to increase the prices of its iconic sandals and footwear globally. The reason? To compensate for the impact of US tariffs. According to CFO Ivica Kroloin, they plan to treat this price increase as a global measure, not just concentrating it on the US market.
Speaking to Reuters, Kroloin explained that the company will fully absorb the impact of the current tariffs through price hikes worldwide. The trade conflict between the US and the EU remains uncertain, but Birkenstock, with limited supply and strategic pricing, seems to be in an advantageous position.
The German-based brand is experiencing stronger demand than anticipated, even in the face of a general slowdown in consumption. CEO Oliver Reichert revealed that they've started the fiscal year 2025 with a bang and now expect to be at the upper end of their revenue growth target of 15 to 17 percent. Moreover, the targeted adjusted operating profit margin (Ebitda margin) has been raised to 31.3 to 31.8 percent, which corresponds to an adjusted Ebitda of 660 million to 670 million euros.
As for the import tariffs imposed by US President Donald Trump, Reichert sees Birkenstock in an "enviable position." During the second quarter of the fiscal year 2024/25, revenue jumped by nearly a fifth to 574 million euros, and profit surged by 47 percent to 105 million euros.
Interestingly, Birkenstock isn't limiting this strategy to price increases. They're also working on improving efficiencies in production and logistics to further reduce costs. The aim is a "low single-digit price increase globally" to fully offset the effect of the tariffs.
This move means consumers worldwide will encounter slightly higher prices for Birkenstock sandals and footwear. But despite the price hikes, the brand's strong demand and improved financial outlook indicate its resilience as it navigates these tariff-related challenges.
The German-based brand, Birkenstock, is implementing a community policy that includes a "low single-digit price increase globally" to cover the effect of US tariffs. This vocational training, in the form of production and logistics efficiency improvements, positions the company strategically within the industry and finance sectors, ensuring a stable growth trajectory.
