Birkenstock shares tumbled in pre-market trading after the German footwear maker reported a steep decline in quarterly profits, citing U.

S. tariffs and geopolitical turmoil in the Middle East.

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The company's net income for the fiscal second quarter ended March 31 fell 22% year-over-year to €82 million, or €0.45 per diluted share.

That compares with €105 million, or €0.56 per share, in the same period last year.

Revenue Growth Misses Expectations

Revenue rose 8% to €618 million, slightly below Wall Street consensus of €620.3 million.

In constant currency, revenue growth was 14%, within the company's forecast range of 13% to 15%.

Adjusted gross profit margin narrowed by 380 basis points to 53.9%. Foreign exchange headwinds accounted for 230 basis points of the decline, while U.

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S. tariffs added 90 basis points.

Distribution channel mix changes contributed another 30 basis points.

Integration costs from absorbing Birkenstock Australia Pty. Ltd., acquired in October 2025, pressured margins by an additional 70 basis points.

Middle East Conflict Disrupts EMEA Operations

Geopolitical tensions in the Middle East erased roughly €6 million from regional revenue in the EMEA division.

The disruption created an estimated 300 basis point headwind for EMEA growth, split between logistical delivery delays and weakened consumer confidence across Europe due to rising energy bills and inflation.

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Despite these challenges, all three geographic regions posted double-digit constant-currency revenue growth: the Americas up 14%, EMEA up 11%, and Asia-Pacific surging 30%.

Birkenstock opened five new company-operated stores during the quarter, bringing its global direct-to-consumer physical network to 111 locations.

Adjusted EBITDA margin contracted by 270 basis points to 32.1%, with currency headwinds accounting for 240 basis points and tariffs for 90 basis points.

Adjusted earnings per share fell 9% to €0.50.

Management reaffirmed its full-year 2026 guidance, projecting constant currency revenue growth of 13% to 15%, adjusted gross profit margin of 57.0% to 57.5%, adjusted EBITDA margin of 30.0% to 30.5%, and adjusted earnings per share of €1.90 to €2.05.

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The forecast incorporates anticipated ongoing impacts from tariffs and currency fluctuations.