Birkenstock Aktie

Good morning, and thank you for standing by. Welcome to Birkenstock's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded.

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

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; and Alexander Hoff, VP of Global Finance, will join us for Q&A.

Today, we are reporting the financial results for our fiscal second quarter ended March 31, 2026. You may find the press release and the supplemental presentation connected to today's discussion on our Investor Relations website at birkenstock-holding.com. Results have been filed on Form 6-K with the SEC.

We would like to remind you that some of the information provided during this call is forward-looking and accordingly is subject to the safe harbor provisions of the 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.

The presentation of this non-IFRS 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 non-IFRS measures to IFRS measures can be found in this morning's press release and in our SEC filings.

Now I will turn the call over to Oliver.

Good morning, everybody. Since our Q1 results, a lot has happened. We faced multiple conflicts in the Middle East, disrupting global supply chains and driving higher energy costs. These cost pressures are fueling inflation, clearly causing pressure on consumer wallets.

The annual inflation rate in U.S. jumped to 3.3% in March '26, marking the highest level since May '24 and sharp increase from 2.4% in both February and January. Eurozone inflation reached 3% in April, the highest level since September '23, driven by 11% increase in energy costs. Eurozone inflation is broadly expected to remain elevated throughout the remainder of 2026.

The U.S. Supreme Court ruling striking down IEEPA tariffs has actually increased our tariff exposure, at least temporarily. We estimate our refund claims will be about EUR 30 million, but timing is still uncertain.

In this challenging environment, we performed strongly, and we once again demonstrated the resilience of our business model. In the second quarter, we grew revenues over 14% within our target range of 13% to 15% growth in constant currency. Our adjusted EBITDA margin remained strong at over 32% despite the impact of FX and tariffs. Even in this uncertain environment, demand for Birkenstock remains strong, and we delivered as promised in our white space growth opportunities.

Closed-toe penetration was up 300 basis points, driven by strong growth in clogs. APAC grew at over 2x the pace of the other regions and share of business was up over 100 basis points year-over-year. We opened 5 new owned retail doors, bringing the total globally to 111. We are well on track to meet our target of 140 doors by the end of fiscal '26. Importantly, within our D2C business, our own retail grew over 60% in constant currency. Same-store sales were up double digits, accelerating from the first quarter. We also continue to invest in our online business to drive better conversion and higher growth.

Our Americas business remains strong, up 14% in constant currency. It was driven by very strong B2B growth and sell-through at partner doors, which was up over 30% at key partners. Youth retailers and sporting specialty continue to lead the B2B growth. The in-person shopping trend continues. Within the Americas D2C business, we saw strong same-store growth, and we added 2 new stores in the Americas, bringing the total to 17.

Growth in EMEA was 11% in constant currency, a strong result when considering the negative impacts of the wars in the Middle East. We estimate the direct and indirect impacts of the war reduced EMEA revenue by about EUR 6 million and growth by about 300 basis points. About half of this was a direct impact due to our inability to complete shipments into the Middle East. The other half was due to muted consumer sentiment in Europe, largely attributed double-digit increase of energy costs and higher inflation. While it is difficult to foresee how long the impacts will last, we have taken measures to mitigate some of the direct impact. We have secured alternative delivery routes, and we can also steer products originally intended for the Middle East to other regions, especially APAC, where demand remains very strong. This is the beauty of our engineered distribution model and proves our resilience.

APAC was up 30% in constant currency as planned, growing more than twice as fast as our other segments. Within our top markets in the region, our strongest growth was in India, China and Japan. APAC showed the highest closed-toe penetration and highest ASP in the quarter compared to the other segments.

Our production is ramping up as planned to reach our target of 10% annual growth in pairs sold. Despite the impact of different conflicts, inflation and tariff uncertainty, we are confident in our growth potential. We are reiterating our targets 13% to 15% for fiscal 2026 and the longer-term targets we shared with you in January. Why are we so confident? We are a purpose-driven brand and see strong global demand for the footbed that shows resilience in uncertain times.

As an affordable luxury brand with a huge pricing bandwidth, we attract a diverse range of consumers across geography, gender, age and income. We manage our distribution with discipline to maintain scarcity, properly segment the market and manage channel growth. The ultimate truth for brand health and momentum is sell-through at full price, which remains very strong at over 90%.

Now I will pass the call over to Ivica to go through the quarterly results in more detail.

Thanks, Oliver. I'm happy to share with you the details of Birkenstock's performance for the second quarter of fiscal 2026, which met our expectations despite the headwinds Oliver already mentioned. We generated second quarter revenues of EUR 618 million, growth of 8% on a reported basis. Growth in constant currency was 14%.

The strong depreciation of the U.S. dollar, Canadian dollar and Asian currencies compared to the second quarter of 2025 caused a 640 basis point headwind to revenue growth in the quarter. For reference, in the second quarter of 2026, the average euro to U.S. dollar rate was $1.17, up from $1.05 in Q2 of fiscal 2025.

We saw strong growth across all segments in the quarter. The Americas segment was up 14% in constant currencies, reflecting continuing strength in our most developed market. EMEA was up 11% and APAC up 30% in constant currency. As Oliver mentioned, we estimate the impact of the war in the Middle East was about 300 basis points to EMEA growth or about 100 basis points to consolidated growth.

By channel for the year, B2B was up 15% in constant currency on the back of continued strong demand at our key partners and D2C is sustaining double-digit growth, up 12% in constant currency. We are still seeing stronger growth in our B2B channel compared to D2C as consumers, especially our newest younger consumers prefer to shop in store. At the same time, our digital business remains a positive contributor to growth, and we are taking measures to drive strong digital growth in the future.

Our own retail business was very strong, up over 60% year-over-year in constant currency. We added 5 new doors. Same-store sales growth accelerated from Q1 and was up double digits.

Gross profit margin for the second quarter was 53.9%, down 380 basis points year-over-year. Adjusted gross profit margin, including the reversal of distributor markup associated with the acquisition of our Australian distribution partner was 54.6%, down 310 basis points. Adjusted gross profit margin, excluding 230 basis points of pressure from FX and 90 basis points of pressure from incremental U.S. tariffs, was up 10 basis points year-over-year.

Selling and distribution expenses were EUR 138 million in the second quarter, representing 22.4% of revenue. This was up 40 basis points from the prior year. General and administration expenses were EUR 33 million or 5.3% of revenue, down 30 basis points year-over-year. Adjusted EBITDA in the second quarter of EUR 198 million was down 1% year-over-year, primarily due to tariffs and currency translation impacts. The flow-through of FX effects reduced adjusted EBITDA by EUR 27 million. Excluding this FX impact, EBITDA was up 13%.

Adjusted EBITDA margin of 32.1% was down 270 basis points year-over-year. Excluding the FX and tariff impacts, adjusted EBITDA margin would have been up 60 basis points to 35.4%. Adjusted net profit of EUR 93 million in the second quarter was down 10% year-over-year. Adjusted EPS for Q2 was EUR 0.50, down 9% from EUR 0.55 a year ago. Adjusted net profit and adjusted EPS were negatively impacted by FX translation of EUR 17 million or EUR 0.09, respectively, and by a EUR 15 million onetime noncash expense or EUR 0.08 per share from the change in valuation of the embedded derivative in our senior notes.

We generated EUR 29 million in operating cash compared to the use of EUR 18 million in Q2 2025. We ended the quarter with cash and cash equivalents of EUR 201 million. Our inventory to sales ratio was 39% in the quarter, up from 36% a year ago. The primary reason is due to FX. While our inventory is largely euro-based, LTM sales are negatively impacted by the depreciation of the U.S. dollar and other currencies.

On a currency-neutral basis, our inventory to sales ratio was 37%. The increase from 36% last year is largely driven by increased work in progress as we increased preproduction of semi-finished goods, especially in clogs to reduce the bottleneck we have faced in final assembly. Inventory level was also impacted by the increase of capitalized tariffs.

Our DSO for the quarter were a healthy 49 days, up from 46 days a year ago, primarily due to the higher B2B mix and timing of large shipments that occurred later in the quarter. During the quarter, we spent EUR 21 million in CapEx, adding to our production capacity in Arouca, Gorlitz, [ Stroth ] and Pasewalk?and beginning the build-out of Wittichenau. And finally, continuing our investments in retail and IT.

Our net leverage was 1.7x as of March 31, 2026, up from 1.5x at September 30, 2025, due to normal cash seasonality.

Turning to our outlook for the remainder of fiscal 2026. In both the third and the fourth quarters, we expect revenue growth in constant currency within our annual guidance of 13% to 15%. We expect to experience less headwind from FX in Q3 and expect FX to be relatively neutral in Q4.

At the [ $1.17 ] euro to U.S. dollar rate, which our annual guidance is based on, we expect approximately 200 basis points of headwind to reported revenue growth in Q3 and almost no difference between reported and constant currency growth in Q4.

On margin for Q3 and Q4, we expect tariffs to have a similar impact on gross margin and EBITDA margin in Q3 of about 100 basis points. In Q4, the impact will be around 50 basis points. FX pressure should be around 60 basis points in Q3 and neutral in Q4. Our business is remarkably resilient, and we are confident we will be able to meet our fiscal 2026 guidance despite the additional headwinds from the Middle East war, inflation, increased tariffs and persistent FX pressures. We are reiterating our guidance for 2026 for constant currency revenue growth of 13% to 15%. The FX headwind to revenue growth should be about 350 basis points for the full year, resulting in reported revenue growth of 10% to 12% to EUR 2.3 billion to EUR 2.35 billion. This assumes an average euro to U.S. dollar exchange rate of $1.17.

We expect adjusted gross margin of 57% to 57.5% in fiscal 2026, inclusive of the 200 basis points of pressure from FX and U.S. tariffs combined. We expect adjusted EBITDA of at least EUR 700 million for the year, implying an adjusted EBITDA margin of 30% to 30.5%, inclusive of the 200 basis points pressure from FX and tariffs. Our expected tax rate is 26% to 28%.

Adjusted EPS is expected to be EUR 1.90 to EUR 2.05, including approximately EUR 0.15 to EUR 0.20 of pressure from FX. This does not include the impact of any additional share repurchase. We remind you that we intend to repurchase share for a total consideration of $200 million during fiscal 2026, subject to market conditions.

Capital expenditures should be in the range of EUR 110 million to EUR 130 million. We have a net leverage target for the end of fiscal 2026 of 1.3 to 1.4x, excluding the impact of any additional share repurchases.

With that, I'll turn it back to Oliver to close.

Thanks, Ivica. We are confident in our business model and its resilience, even in the face of pressures from war, inflation, tariff and FX. Demand for our beloved brand remains strong. We are a democratic and accessible brand. Our addressable market is every human being that walks on 2 feet. We are unique in that. We have products to address consumers with price points from $50 to our 1774 collabs at up to $2,000.

At Birkenstock, we turn challenges into opportunities. As a brand with heritage of over 250 years, we stick to our plans, continue to take share, steer product between geographies and channels to optimize margins and use our strong balance sheet and capital allocation decisions to increase shareholder returns.

In an overall challenging context, we continue to see plenty of opportunities. We see it in the fast-growing APAC market in our expanding owned retail fleet and in our developing closed-toe business. We have proven our ability to mitigate external challenges and difficult market conditions to drive strong profitable growth.

Now we will take your questions. Thank you.

[Operator Instructions] Your first question comes from the line of Matthew Boss with JPMorgan.

So Oliver, first half revenue growth averaged 15%. Full year reiterated forecast calls for 13% constant currency growth in the back half. Could you just break apart the factors that you're embedding in the second half forecast, if we could think about capacity constraints, Middle East exposure and channel mix? And could you elaborate on the impact that you're seeing today where you cited the more muted consumer sentiment in Europe tied to higher energy costs and inflation?

Thanks for your question, Matt. The clear answer to the first part of your question is that we're not seeing any slowdown in second half of fiscal '26. From everything we see that we can control, of course, demand remains strong and resilient despite the headwinds from the different conflicts, inflation, FX and tariffs.

Actually, as you know, we have to pay 10 percentage points higher tariffs compared to pre-Liberation day. As you know, we are a super resilient purpose-driven brand. We can reach consumers with price points from USD 50 to up to USD 2,000, and we have a global addressable market of every human being. So the stage is set, and we reach consumers with a broad range of products for almost all usage occasions and across thousands of doors globally.

Keep in mind, we own most parts of our supply chain, which shields us and protects us other than most of our industry peers from the disruption in the global supply chain and the risk related to shipment delays. I think this is very important especially in these days. All this together supports our business and brand through tough times of disruption.

To sum it up, we've always shown the ability to overcome challenges. Our track record supports this through all kinds of external headwinds, COVID, war, energy crisis, we are seeing no difference this time around. Still, as you know, we cannot be blind what's going on in the world around us. So yes, we are conservative in how we guide for the rest of the year.

Keep in mind, the third and the fourth quarters are our 2 largest quarters and are very DTC heavy, especially in EMEA, which is most directly exposed to these external changes and challenges. It's important that we recognize this uncertainty in our outlook. That's how we think about the guidance for the second half of the year. But that said, we are confident in our guidance of 13% to 15%, a range we can deliver even if unexpected challenges arise. I hope this answers your questions.

Your next question comes from the line of Laurent Vasilescu with BNP Paribas.

Oliver, Ivica, I wanted to follow up on EMEA. Your growth was up 11% for the quarter. The prior quarter was up 17%. You mentioned the war has reduced EMEA growth by about 300 basis points. Can you quantify the ongoing risks exposure in the Middle East region for the rest of the fiscal year? And should we be lowering our EMEA growth rate for 3Q and 4Q? And what are you seeing in terms of overall consumer sentiment in EMEA?

Laurent, this is Nico. Thank you for your question. I'm going to answer this being responsible for the EMEA region. So let me start by saying that we continue to deliver double-digit growth in EMEA in a market that is overall flat to slightly negative. So in this context, we believe 11% on a constant currency reflects the underlying brand strength and is a pretty robust result. As in previous quarters, we continue to be one of the very few chosen brands, as Oliver just mentioned, and we will continue and do continue to take share with a very strong full price realization.

Now with regards to the impact of the current situation in Middle East. Q2 was indeed a very busy quarter for us, specifically at the end of the quarter, and we saw some external disruptions related to the Middle East situation. Most importantly, all our team members and partners in the region are safe. Our partner stores are open and our online business is operating.

The team has shown really strong resilience to continue our business under extreme conditions, yet we saw a revenue impact of EUR 6 million, equaling 300 basis points headwind to our growth. Two impacts, one direct impact, which is half of it, primarily in B2B related to the Strait of Hormuz being blocked, we could effectively not ship product into the region. And the other one is an indirect impact, mostly in Europe in both our DTC channels due to reduced tourism in some of our key cities and a more cautious sentiment among local consumers. Excluding those effects, growth would have been in line with our planned fiscal year guidance of 13% to 15%.

With regards to the outlook in EMEA for H2, we believe there will be an ongoing direct impact in our Middle East business. Our Middle East team is exploring all measures to offset this risk. We now put a bigger focus on Saudi Arabia that has proven more resilient due to more local consumers. And we also have started to ship product on different routes into alternative ports to get product into the region. However, the majority of our Middle East business sits within the war impacted region. That was the direct impact that we anticipate. The indirect risk is really difficult to predict at this point.

If inflation continues to rise, we can anticipate further pressure on the consumer wallet, consumer sentiment. As per today, we identified approximately EUR 10 million to EUR 12 million of revenue risk in EMEA which, at this point, we believe we can offset with other regional segments. So there's no change in our overall revenue guidance.

Your next question comes from the line of Ed Aubin with Morgan Stanley.

So Oliver, you've addressed the impacts of the Middle East on revenues. But what about the COGS side, what's the impact of energy and other inflation on your business?

Edouard, this is Ivica. Thanks for your question. Where we currently see higher inflation related to Middle East is energy, is freight rates and is raw materials, especially in everything that is petroleum-based materials, such as EVA granulate and solesheets, for example. In general, the exposure is mitigated by our strong inventory position. So the impact naturally is and will be gradual. And as you know, as a manufacturing company, we always address input cost inflation as we make our pricing decisions. So no change to this, no change to this approach. And we see no impact on margin guidance for the overall fiscal '26.

Your next question comes from the line of Lorraine Hutchinson with Bank of America.

You mentioned tariffs are now 10 percentage points higher versus pre-Liberation day. If this structure holds, what's the impact on gross margin guidance? And how quickly can you raise prices to offset the margin dollars associated with the new tariffs?

Lorraine, it's Ivica speaking. Thanks for your question. So as a background and as you rightly said, if you recall prior to April '25, we were paying average tariffs of just over 10%, depending on the product mix. In April '25, our average tariff initially went up to 25%. Then with the European Union agreement in July of '25, this settled to just over 15%. Now after the U.S. Supreme Court ruling, we are at just over 20%. So this including the Section 122 temporary tariffs.

So if the current tariff structure were to hold, which is still very unclear at this point, we could see some additional increase in margin pressure in Q4. However, given our strong inventory position in the U.S., which is now tariffed at a range of rates, we don't believe it would push us out of our targeted margin range for the year.

And with regards to your second part of the question on pricing, we will follow the same approach we have always followed. So our pricing is very targeted, very granular on a season-by-season, style-by-style level, and it's designed in a way to protect our margin in the first instance and to pass through higher input costs and inflation.

And we have lots of moving parts here, including the Section 122 tariffs, which are temporarily limited to the 24th of July. And currently, we see trade negotiations between U.S. and EU. So we will not jump to any conclusions here and stick to the approach that we have followed in the past already.

Your next question comes from the line of Michael Binetti with Evercore.

So 2 for me. Just the adjusted EPS at EUR 0.50. I see from the release today that came in a little below expectations, but there was a -- partly driven by EUR 15 million noncash negative revaluation of an embedded derivative in your senior notes. Maybe just a quick explanation of that derivative, why the revaluation occurred and whether the volatility continues in the future? And then also, if you -- I think I know you walked through some of the gross margin bridge for the quarter. Would you mind going through the details on that and how the gross margin components beyond tariffs and netbacks roll through 3Q and 4Q for us?

Michael, it's Ivica speaking. Thanks for the question. First, on the EPS with regards to the senior notes. So we have the option for early repayment of the senior note. This is basically a redemption feature, and this is what created the embedded derivative. The valuation of the embedded derivative is largely impacted by the current price of the notes. In Q1, the notes price was unusually high above the call price. From a valuation and model perspective, this made early repayment more likely, resulting in a noncash gain of EUR 10 million in the first quarter of fiscal '26.

In Q2, we see an opposite picture as we approach the call date. The notes price dropped to slightly below the call price. Now it's no longer, again, technically obvious whether we will call the note or not. And that uncertainty makes the option more sensitive to volatility and resulted in a devaluation of the derivative, and this made the noncash impact of EUR 0.08 expense in Q2. Excluding these noncash impacts, recurring finance costs should be in the range of EUR 18 million to EUR 20 million in each Q3 and Q4 '26.

On the second part of your question on the adjusted gross margin, it was 54.6%, down 310 basis points. To bridge the change here, negative impacts were FX with 230 basis points, tariffs 90 basis points, channel 30 basis points. On the positive side, we saw absorption of 30 basis points, sales price over inflation of 10 basis points. Excluding tariff and FX, this margin expansion of 10 basis points even with the channel shift.

And looking ahead for Q3, FX should be in the range of 60 basis points and tariffs a 100 basis points drag. For Q4, FX should be largely neutral and tariffs a drag of 50 basis points. And pretty much the same picture on EBITDA margin for this quarter like-for-like, so excluding tariffs and FX, it was an improvement of 60 basis points year-over-year.

Our next question comes from the line of Simeon Siegel with Guggenheim Securities.

Ivica, inventory grew faster than revs. Can you speak to that trend and how you're thinking about the opportunity to improve working capital going forward? And then sticking with the balance sheet, just DSOs also, I guess, grew year-over-year, even if I adjust for the higher B2B revenues. So could you elaborate a little bit more on what's driving that increase? I think you mentioned something about timing in the prepared remarks. And is this a new baseline? Or do you expect this to move back down to historically lower levels?

Simeon, thanks for your question. So as we mentioned on the call, the increase in the inventory to sales ratio was largely due to FX impacts. So inventory in euros and sales a mix of USD, euros and other currency. On a constant currency basis, it was up only slightly from 36% to 37%. The main driver of this was raw materials and semi-finished goods, which grew 19% year-over-year, which is EUR 26 million. And this was intentional.

We have told you that we have greatly expanded our preproduction of uppers in our plant in Arouca in Portugal to be more flexible, to be faster in final assembly, and this addresses one of our production bottlenecks. And this is the main driver of the increase.

Also, keep in mind, our tariffs increased and which means we are capitalizing more tariff expense into inventory. When you adjust for all of these factors, our inventory level actually improved modestly year-over-year. And be reminded, the largest part of finished goods are carryover products and/or allocated already to existing customer orders. So 85% of all our units carry over, and this allows us for preproduction and production balancing. And to that regard, our B2B business allows us to manage that and organize that very efficiently.

Coming back to the second part of your questions on DSO, we saw slightly higher B2B share, which had some impact as well as timing of deliveries in the quarters. That said, our receivables are very healthy. We have very long-standing relationship with our partners. Our credit losses are very minimal. And in fact, we released more credit loss reserved than we added this quarter. So we remain very diligent and rigorous when it comes to credit management. So no changes here.

Your next question comes from the line of Dana Telsey with Telsey Advisory Group.

With the additional stores and the investments in digital that you're talking, should we expect to see an acceleration in DTC in the second half of the year? What measures are you taking to accelerate digital growth? And you mentioned an acceleration of new store openings this year. What is that number tallying and how does it differ by region?

Dana, this is Nico again. Allow me to start with our own physical retail. This channel will continue to be our fastest-growing channel and will enable us to capture in-person demand more strongly in the future. At the end of Q2, we mentioned this in the prepared remarks, we operate 111 stores and expect to reach around 140 stores by end of the year. The new stores that we open continue to outperform our longer-standing fleet through higher ASP and more units per transaction, we deliver higher transaction value.

And at the same time, these new stores continue to deliver against our overall return on CapEx target, which is 12 to 18 months. Having said this, we delivered double-digit growth in same-store sales. So the one doesn't go at the expense of the other.

With regards to online, we are now increasing investments in mid and upper funnel, specifically in social media and particularly in the Americas region, in the U.S., we see a very strong ROAS with strong ability to capture demand there. While at the same time, we continue to drive retention with our membership base of almost 13 million members globally.

In parallel, and you might remember that, the 2 more mature regions, Americas and EMEA are currently executing against the online transformation agenda we outlined at our Capital Markets Day. Four 4 key areas, I repeat them from Capital Markets Day, it's distinctive offering, elevated storytelling, personalization and new business models. APAC as a younger online business will continue to benefit from very strong organic growth in this channel.

Your next question comes from the line of Mark Altschwager with Baird.

Ivica, just following up on tariffs. Where do you stand with the IEEPA claim process? How are you thinking about the timing of the refund and the confidence you'll receive it? And how do you plan to deploy those funds? And then separately, I wanted to ask on the buybacks, $200 million authorization. You haven't done any year-to-date. I don't think the guidance incorporates any. But just given the stock price, maybe speak to your appetite for buybacks from here.

Thank you for the question, Mark. It's Ivica again. So you're right, under the current U.S. customs process, IEEPA refunds are handled through a system, which is called CAPE, which is run by the U.S. Customs and Border Protection. This system went live on April 20. However, we are not yet able to file for refunds because our custom entries are submitted as reconciliation cases, which will be handled at a later stage of the process. As such, we're waiting for the next administrative steps and will take action accordingly as it evolves over the next couple of weeks and months.

To the second part of your question with regards to the buyback, yes, we do have $200 million available for buybacks. It was originally the intention to use the buyback in conjunction with the sale by our majority shareholder as we did last year. Clearly, we have not had that opportunity this year. As we get now into our seasonally strong cash generation period, we consider definitely all options available to us, including open market repurchases.

Your next question comes from the line of Janine Stichter with BTIG.

You've got Ethan on for Janine. We've noticed a higher SKU count offered at a discount on your website. Could you just give us some insight into what's driving this? And then just how much of closed-toe penetration is the Boston right now? And what is growth in the Boston versus non-Boston silhouettes?

This is Nico. Thank you for your 2 questions. I'm going to answer both of them. With regards to your first one, at an overall industry level, we do see higher markdown activities as retailers are currently competing for a more constrained consumer wallet. In this context, we continue to deliver a superior full price realization at over 90%. This underlines the strength of our brand, but also this underlines our markdown discipline. Any active markdown we do is to effectively manage our real seasonal excess stock as the business continues to grow.

As a reminder, and Ivica alluded to that, 80% of our business is core essentials and carryover products, so seasonless product. And our markdown assortment is centered around past seasons. So yes, there will be moments you may see some increase in discount items. This is by design and doesn't really break our full price realization, which will continue to be very strong.

Now the second question was around closed-toe and Boston. We haven't given the closed-toe share of Boston. We will also not give it in the future. But what we can say is that the Boston silhouette and its variations remain a major part of our closed-toe business. At the same time, non-Boston silhouettes grew at a much higher pace than Boston. So again, it's not one at the expense of the other. We are really diversifying our portfolio. Currently, 11 out of 20 top styles are closed-toe. 7 are clogs, like the Boston, the Naples, Tokyo, Buckley and 4 are traditional shoes like the London, the Highwood, the Utti and the Bend.

It's worth mentioning that also recent archive Bringbacks like our Santa Clarita, our Ballerina style are quickly gaining share. So you see that we are much more diversifying our closed-toe business and have become a very strong full year brand.

Our next question comes from the line of Adrien Duverger with Goldman Sachs.

I think we've spoken at length about the EMEA. We've spoken a bit about the DTC channel. I was wondering if you could help me understand better the consumer environment across other regions. More specifically, could you comment on the U.S. and on APAC, maybe help us understand the path to doubling revenue in that APAC region.

Thank you for your question, Adrien. It's Oliver again. The APAC grew at twice the pace of the other segments. That's in line with our expectations. And with DTC, especially retail leading the growth, which is super important in this region. It's a very high qualitatively growth. This has continued despite all the conflicts in the Middle East. The demand remains very strong and the ASP was up double digits as consumers, they continue to gravitate to higher price points. That's pretty unique in the APAC region, and it's including a lot of our 1774 collection. So if you go to a store in China or even India, you see a lot of very high-priced products making the -- somehow the baseline there.

In the Americas, our business remains super strong. We see no slowdown in our growth. We see continued strong full price sell-through at key partners with many up around 30%. So in D2C, our stores continue to perform very well, especially our new stores like Sawgrass.

Keep in mind, the beauty of Birkenstock is that even if we start to see consumers tightening up their spendings, we are an affordable luxury brand. We serve a broad range of price points starting as low as USD 50 if needed. So the beauty of our business model is that we can lean into stronger markets, stronger channels and stronger product categories when we see softness elsewhere. Between us, Adrien, this is engineered distribution in real time.

There are no further questions at this time. I will now turn the call back to Birkenstock's executive team for closing remarks.

Thanks for joining us guys. If we didn't get to your questions, I apologize. We will follow up with you in our follow-up calls. Take care, everyone.

Thank you.

This concludes today's call. Thank you for attending. You may now disconnect.

Good morning, and thank you for standing by. Welcome to Birkenstock's First Quarter and Fiscal 2026 Earnings Conference Call. [Operator Instructions] The company allocated to 45 minutes in total to this conference call. I would like to remind everyone that this conference call is being recorded.

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

Hello, and thank you, everyone, for joining us today. On the call are Oliver Reichert, Director of Birkenstock Holdings Plc and Chief Executive Officer of Birkenstock Group; and Ivica Krolo, Chief Financial Officer of Birkenstock Group; Alexander Hoff, VP of Global Finance, will join us for Q&A.

As a reminder, we preannounced certain first quarter results in conjunction with our Capital Markets Day on January 28. On this occasion, we took a deep dive into our business model and our growth strategy for the next 3 years, combined with a Q&A session, which covered a wide variety of topics. For those of you who are not able to attend our Capital Markets Day or follow it via live stream, the presentation materials and replay are available on our Investor Relations website at birkenstock-holding.com.

Today, we are reporting the financial results for our fiscal first quarter ended December 31, 2025. You may find the press release and the supplemental presentation connected to today's discussion on our Investor Relations website at birkenstock-holding.com. Results have also been filed on Form 6-K with the SEC. We would like to remind you that some of the information provided during this 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.

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. The presentation of this non-IFRS financial information is not intended to be considered by itself or as a substitute for financial information prepared and presented in accordance with IFRS. Reconciliations of non-IFRS measures to IFRS measures can be found in this morning's press release and in our SEC filings.

Now I'll turn it over to Oliver.

Good morning, everybody. It was great seeing you in New York 2 weeks ago. Just to recap some key points from the day. We believe we are one of a kind, purpose-driven brand with a huge runway ahead. Our unique business model is designed to deliver resilience with sustained long-term top line growth, industry-leading margins and strong free cash flow. Over the next 3 years, we expect to continue to deliver 13% to 15% top line growth in constant currency and 30% plus EBITDA margins in an environment that has substantially changed since our IPO.

Why are we so confident in our growth potential? Our total addressable market includes every homo sapiens sapiens. That provides a very long runway for global growth. The 3-year growth algo of 13% to 15% in constant currency reflects our commitment to manage the business with discipline by geography, channel and product. By being vertically integrated, we are capacity constrained by design. So to grow our business profitably, we are committed to maximize profitability per pair while protecting brand equity.

The Americas, our largest segment, continues to grow double digit. Even in our most developed market, the U.S., we sell only 45,000 to 50,000 pairs per million people or roughly 5% penetration. So there is still substantial room for more growth. As you know, our margins in the U.S. faced headwinds from additional tariffs and the weaker dollar. However, our resilient business model allows us to steer growth between geographies to optimize margins under this new reality. In EMEA, our highest margin segment, markets like Germany, Denmark and Austria have reached penetration levels similar to the U.S. and still generate double-digit growth. But we are underpenetrated in other markets like France, Spain, U.K. and the GCC. So we see even stronger growth potential in these countries and very high margins.

Finally, the largest opportunity for long-term growth remains in APAC countries such as China, Japan, South Korea and India, where we are highly underpenetrated but realize strong margins and some of our highest ASPs. We will steer APAC growth at double the pace of the other segments over the next 3 years. This means we will double our APAC revenue by 2028. For the foreseeable future, we expect B2B growth will continue to outpace DTC growth, but we are working to balance channel growth and strengthen our DTC business.

B2B growth is driven by the trend towards in-person shopping. We are investing in our own retail to capture more of this in-person demand and promote newness. In online, which accounted for 80% of our DTC revenue last year, we are not sitting on our hands. We are transforming our capabilities to convert more of the lifetime value of the brand fan to our e-com business. We do this all within the context of our vertically integrated supply chain and manufacturing capabilities. Our supply chain will deliver the unit growth required to achieve our 3-year targets.

Now on the quarterly results. We delivered again a strong quarter with revenues of EUR 402 million, up 11% on a reported basis and 18% in constant currency, well above our 13% to 15% full year guidance. We saw strong demand and brand momentum during the important holiday shopping season. As expected, our B2B business outperformed DTC during the quarter. B2B was up 24% in constant currency, while DTC was up 12%.

As you know, over 90% of the B2B growth comes from within existing doors. We tightly manage our distribution as relative scarcity and channel health remain top priorities for us. We will never compromise on our pull model. The ultimate truth for the brand health is sell-through at full price and that remains very high, over 90%. We continue to deliver as promised in our white space opportunities.

In APAC, we grew revenues 37% in constant currency, more than double the pace of growth of the Americas and EMEA. In own retail, we added nine new stores, ending the quarter with 106 stores. We are well on the way to deliver the 40 stores we promised for this fiscal year. This will allow us to capture more in personal shopping demand and younger shoppers within our own DTC business. It also allows us to showcase the full range of our collection newness and special editions not available in B2B.

The closed toll share of revenue reached close to 60% of revenue during the first quarter, which is seasonally the highest quarter for our closed toe business. We saw very strong sales in clocks, including the Boston, a category-defining hero silhouette, celebrating its 50th birthday this year. We also saw strength in other clock silhouettes such as Naples and the Lutry. We are successfully developing the brand beyond sandals, making it a true 4-season brand.

I will now turn it over to Ivica to discuss our financial results and outlook in more detail.

Thanks, Oliver. I am happy to share with you details of Birkenstock's performance for the first quarter of fiscal 2026, which exceeded our targets even in the face of a significant headwind from FX on our reported numbers. We generated first quarter revenues of $402 million, growth of 18% in constant currency. Reported revenue growth was 11% due to the historically strong depreciation of the U.S. dollar and Asian currencies compared to the first quarter of 2025.

This caused a 670 basis point headwind to revenue growth in the quarter. We saw strong growth across all segments in the quarter. The Americas segment was up 14% in constant currency. EMEA was up 17% and APAC up 37% in constant currency. By channel for the year, B2B was up 24% in constant currency on the back of strong holiday demand at our key partners and DTC sustained double-digit growth, up 12% in constant currency.

Gross profit margin for the first quarter was 55.7%, down 460 basis points year-over-year. Adjusted gross profit margin, including the reversal of distributor markup associated with the acquisition of our Australian distribution partner was 57.4%, down 290 basis points. As we discussed at the CMD, adjusted gross profit margin, excluding 220 basis points of pressure from FX and 130 basis points of pressure from incremental U.S. tariffs was up 60 basis points year-over-year. Selling and distribution expenses were $126 million in the first quarter, representing 31.2% of revenue. This was down 150 basis points from the prior year, mainly due to a higher B2B share year-over-year.

Selling and distribution expenses were $126 million in the first quarter, representing 31.2% of revenue. This was down 150 basis points from the prior year, mainly due to a higher B2B share year-over-year. Adjusted general and administration expenses were $29 million or 7.2% of revenue in the quarter, up 50 basis points versus prior year. Adjusted EBITDA in the first quarter of $106 million was up 4% year-over-year. Adjusted EBITDA margin of 26.5% was down 170 basis points year-over-year. Excluding FX and tariff impacts, adjusted EBITDA margin was up 190 basis points to 30.1%.

Adjusted net profit of $49 million in the first quarter was up 47% year-over-year. Adjusted EPS for Q1 was $0.27 and up 50% from $0.18 a year ago, driven by strong operational performance, lower interest expenses, $10 million of income from the change in valuation of the embedded derivative, the lower effective tax rate and lower share count following the $200 million share repurchase we executed in May 2025.

As usual, in the first quarter, we used $28 million in operating cash compared to a use of $12 million in Q1 '25. This is due to working capital seasonality and income taxes paid of $48 million. We ended the quarter with cash and cash equivalents of $229 million. Our inventory to sales ratio was 39% in the quarter, flat with a year ago. Our DSO for the quarter were a healthy 20%, up from 15% a year ago primarily due to the higher B2B mix.

During the quarter, we spent approximately $38 million in CapEx, adding to our production capacity in [ Arouca ], Girls and Posera and continuing our investments in retail and IT. This also included the EUR 18 million purchase price of the [ Vitis ] now facility we announced last year. Our net leverage was 1.7x as of December 31, 2025, up from 1.5x at September 30, 2025 due to a normal cash seasonality.

Turning to our outlook for the second quarter of fiscal 2026. We expect second quarter revenue growth in constant currency within our annual guidance of 13% to 15%. We will experience significant headwinds from FX and tariffs in the second quarter. Regarding FX, we will see an especially strong headwind in the second quarter. As a reminder, the second quarter of 2025 represented the strongest quarter for the U.S. dollar with an average euro to dollar exchange rate of $1.05 prior to liberation day.

At today's euro-U.S. dollar exchange rate, we expect approximately 700 basis points of headwind to revenue growth in the second quarter. The margin impact to gross profit and adjusted EBITDA from FX will be 200 to 250 basis points in the second quarter. As a reminder, nearly all of our COGS are in euro and the majority of SG&A as well.

As such, the absolute euro impact of movements in FX to revenue flows through by about 90% to gross profit and about 2/3 to adjusted EBITDA. Regarding tariffs, we expect similar margin pressure as we saw in Q1 or roughly 100 to 150 basis points. At our Capital Markets Day, we iterated our guidance for 2026 for constant revenue growth of 13% to 15%. While we clearly came in ahead of that at 18% in the first quarter, I remind you that the first quarter is our smallest quarter in terms of revenue. So it just does not carry the way that the remaining three quarters have on the annual growth rate.

The FX headwind should be about 350 basis points for the full year, resulting in revenue growth of 10% to 12% to EUR 2.3 billion to EUR 2.35 billion. This assumes an average euro to U.S. dollar exchange rate of $1.70. We expect adjusted gross margin of 57% to 57.5% in fiscal 2026 inclusive of the 100 basis points pressure from FX and 100 basis points from incremental U.S. tariffs. We expect adjusted EBITDA of at least EUR 700 million for the year, implying an adjusted EBITDA margin of 30% to 30.5%, and 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 32% to 32.5%.

Our expected tax rate should be in the range of 26% to 28%. Adjusted EPS is expected to be EUR 1.90 to EUR 2.05, including approximately $0.50 to $0.20 of pressure from FX. This is not including the impact of any additional share repurchases. We intend to repurchase shares for a total consideration of $200 million during fiscal 2026, subject to market conditions. CapEx be in the range of EUR 110 million to EUR 130 million. Net leverage target for the end of fiscal 2026 of 1.3 to 1.4x, excluding the impact of additional share repurchases.

With that, I'll turn it back to all over to Oliver to close.

Thanks, Ivica. We are confident in our business model and its resilience. Demand for our beloved brand remains strong. The runway for growth is huge. At the midpoint of our growth target, we expect to add EUR 1 billion to our top line by fiscal 2028. We will do this while maintaining 30% plus adjusted EBITDA given our ability to steer the business between channels and geographies.

And now I ask the operator to open the call for questions. Thank you.

[Operator Instructions] Your first question comes from the line of Matthew Boss with JPMorgan.

So Oliver, could you break down the drivers supporting your confidence in durable demand momentum for the brand globally, maybe if you could touch on current sell-through rates, full-price demand indications from wholesale partners and new customer acquisition? And then near term, have you seen any change in brand momentum so far in the second quarter?

Matthew, thanks for your question. As we shared in New York, we see a very long runway for growth for the brand. As you know, the total addressable market of this brand includes every human being on the planet. So even in our most established markets, like the Americas, as an example, the market penetration is below 5%. So we continue to grow there and in other territories, double digits. And all this with a 90% plus full price realization across all channels. I think that's really something to mention because that's really outstanding.

And -- our order book for '26 in the next years remains very strong. We strictly allocate our partners to maintain scarcity and fulfilling roughly 70% to 80% of the wholesale demand. So 20% to 30% are unfulfilled out there. And we have seen no pushback from partners on any price increases or any kind of adjustments we did so far.

You asked about the customer acquisition. I would say the new customer acquisition comes primarily from our B2B channels where our partners benefit most from the strength of our brand and use us to drive traffic to their stores. You know the attraction, especially to Gen Z in this channel is very, very strong.

Within our own DTC, the strongest indicator of new customer growth is our membership program, which is up over 20% year-over-year. You all have seen the queuing in front of our own retail stores, but we only have 106 at the moment. So our own retail is definitely in the future, a very, very important pillar to talk about brand heat on top of that. But asking about second quarter, we can't deliver any outlook here. We see the momentum continue in line with our guidance of 13% to 15% revenue growth in a constant currency. So I think we're good on track.

Your next question comes from the line of Simeon Siegel with Guggenheim Securities.

So just Oliver, recognizing you guys are in this enviable position where you do supply less than demand. How are you deciding where to allocate your inventory across channels and geographies, just to optimize the brand strength reaching new customers and then where your EBITDA dollars per payer come in? And then Ivica, just recognizing tariffs inflation, what were inventory up in units rather than in dollars.

Simeon, it's Oliver. Thank you for your question. As you know, we will see our product in the most profitable channels and regions to make sure our brand is well balanced in terms of revenue, unit needs or unit consumption and the maximum resilience.

Just to be clear, channel drives the margin. Geography is less relevant. So it's not really a shift from geography to other geographies. It's really like very detailed, very precise shifting from this channel in this geography to another channel in another geography. So -- and that's what we're doing mindfully.

And I think the second part of the question will be answered by Ivica.

Can you repeat the question, Simeon, we didn't quite hear it.

All right. Just looking at your balance sheet inventory in dollars. Curious if you could tell us what is up in units year-over-year.

Simeon, it's [ Alexander ] speaking. So we're not disclosing that in detail as we haven't yet disclosed in the past, and we're not intending to do that in the future as well.

Your next question comes from the line of Anna Andreeva with Piper Sandler.

So your first quarter growth came in at 18% in constant currency. That's nicely ahead of the 13% to 15% guide for the year. Can you talk about where that slowdown for the rest of the year coming from and are you just being conservative? Just some more color on that would be great.

And just as a follow-up to Ivica, can you help us with the seasonal progression of how we should think about margins across the quarters for the rest of the year, just considering the outlook for FX, the tariff timing, capacity absorption and some other items.

Thank you for your question. It's Ivica. Yes, the 18% constant currency growth in Q1 '26 is indeed well above the 13% to 15% guidance for the year. In general, we are always conservative that this early in the year. There's a lot of ahead of us in fiscal 2026. And the second half is naturally more difficult to predict, as you know, given the heavier mix of DTC which is why we remain conservative. So while we're off to a great start and demand remains strong, as Oliver already mentioned, we think it's just prudent to stick with the current guidance for the year. And as a reminder, Q1 is our smallest quarter for the year. Last year, it was only 17% of the annual revenue. So it just doesn't carry the same weight for the remainder of the year.

And with regards to your second question on the seasonal progression and margin development. So as you know, we do not guide in detail on a quarterly basis. However, we've pointed out a couple of points and important factors. So on top line first, FX impact will be the heaviest in Q1 and Q2. Q1 headwinds was 670 basis points, Q2 at current FX, even around 700 basis points.

So the margin impact to gross profit and adjusted EBITDA from FX will be 200 to 250 basis points in Q2. Incremental tariff impact will have more pronounced impacts in Q1 to Q3, but less so in Q4 '26 given that the tariffs began to hit us in Q4 '25 where we already showed a 100 basis points impact for that quarter. For Q2 '26, we expect a similar margin pressure as we saw it in Q1, so roughly 100 to 150 basis points.

And finally, with regards to absorption, we will be completing the absorption, especially with regards to our [ Password ] facility by Q3 '26. As you know, Q2 is an important quarter for our B2B business with significant shipments to our partners for the spring/summer season. The mix in Q2 is more heavily weighted to B2B, so expect the usual seasonal decline in gross margin and increased EBITDA margin compared to Q1, but all within the context of our full year margin guidance.

Your next question comes from the line of Michael Binetti with Evercore ISI.

I just want to ask a little bit on -- maybe on the OpEx or the SG&A. I think the guidance for the rest of the year flattens out from some nice leverage in the first quarter a little bit. Maybe you could just talk about whether -- I'm curious if we're going to be going through the rest of the year with double-digit growth. What -- is there a chance to find some more leverage on SG&A? Or how should we think about SG&A at a double-digit growth pace even if it flows from first quarter.

And then I also just wanted to ask, as we head into the spring and summer, Oliver, maybe just -- just a quick thought on some of the products that are the ones that are the retailers are the most excited about, maybe something that we can Google or watch your social media trends. What are the big products that we're going to see for the summer time here as we get into the main season?

I will take the first part with regards to your question on margin improvement and SG&A. So as you know, the tariff and FX drag is very real for us and impacting our margin by 200 basis points for fiscal 2026.

Without that pressure, EBITDA margin would have been up nicely year-over-year. And this is also what we pointed out at our Capital Markets Day that we are getting operationally better. Could that be up more? Yes, always. But we need to balance expanding margin with reinvesting that margin upside back into the business to support sustainable revenue growth. And this is particularly in our B2C business, which brings lower margin but higher absolute profitability per pair.

But our DTC business is still 80% online, which has little operating leverage given the high variable cost structure. So we are accelerating our store growth to drive more retail as part of our DTC mix which should allow for some 4-wall operating leverage over time. We are accelerating our investments in manufacturing, in retail, in e-com and logistics, and that will constrain EBITDA margin expansion in the near term. And referring to what Oliver has said earlier, in a capacity-constrained situation which we are in and which we are in by design, we are steering the business and allocating products in a way to optimize margin, mindfully and gradually, but this will pay off over time. And with regards to your question on product and spring/summer, handing back to Oliver.

What we see globally, especially in our own retail spaces and also with -- in the order book of our big wholesale doors, we're delivering, they're looking for much more elevated styles in both ways, in close toe and in open toe sandal. What we see is a very strong momentum in open toe in elevated styles in every price segment. So from big [ back ] EVA up to Naples wrap, which is a close toe silhouette, open toe Florida in a very elevated execution. [ Digizeis ] coming back. So the [ tone ] sandal and -- so it's going, as always, in the same direction, go into more expensive price groups, more elevated executions that's super interesting for our partners, and it's super interesting for our own retail stores. that's a big trend. We see also coming from APAC, where [ 774 ], you know our Paris office delivering open toe silhouettes north of USD 250 in the APAC region. This is already 30%, 40% of our own retail. So this is a very strong momentum in this high price level and this more elevated styles.

Your next question comes from the line of Paul Lejuez with Citi.

It's [ Tracy Kogan ] going in for Paul. I was hoping we could touch on the balance sheet and your uses of cash. With the stock trading where it is, I was wondering if you were thinking about being more aggressive in the open market with your $200 million buyback rather than waiting for private equity. And then also wondering if you could talk about your willingness or the insiders willingness to buy stock at current levels?

Tracy, thank you for the question. It's Ivica. I 100% agree the stock is too cheap, [ reflect ] the fundamental value of the underlying business, not at all. As you know, we announced our intention to repurchase $200 million in shares in fiscal 2026. So we will be executing this subject to market conditions. If you remember last year, we executed a repurchase in May in conjunction with a secondary offering, given the limited free float already in the market.

A similar structure for this buyback is an option, but so are open market repurchases as well. Then covering the second part of your question with regards to insider buying. Well, we have been in a block out period for most of the year. Our standard workout period runs from 2 weeks before the end of our fiscal quarter to the day after we report that quarter. So in the case of Q1, the blackout started on December 15 and ends tomorrow. Additionally, we have had transaction-related blackouts due to the [ Vidgen ] acquisition and the Australia distributor acquisition.

Finally, we get blacked out around any secondary transaction, potentially by acetate, all altogether, that hasn't left any window in the year. I've been in at Birkenstock. And I assure you, it's not the lack of desire to buy shares at this price.

Your next question comes from the line of Laurent Vasilescu with BNP Paribas.

I wanted to ask about your own stores, which are becoming increasingly important to your DTC business. I think, Oliver, you mentioned that last year, e-commerce was 80% of mix, 20% stores. could do some rough math about -- with regards to revenue per store. Can you provide us with some store profitability metrics? What is your same-store sales growth? And how are the new doors perform and how long are they taking to ramp up to full profitability?

Thank you for your question. It's Ivica, and you are 100% correct. Our own retail is becoming increasingly more important by design. We want to create more high-quality touch points with the brands capture more of the in-person demand within our own retail channel and balance DTC better between online and in-store.

Generally, the channel also allows us to showcase the full range of our offering, including exclusive styles that you won't see in the B2B channels. As you know, our store fleet is still small and young, only 106 stores by the end of Q1 globally, and around 60 of those have opened in the past 2.5 years. As a result, we see a significant variation within the base, so the average are skewed and not a particular useful predictive tool.

And also be reminded there is no store that looks like the other, so the conception of the stores is very diverse all over the globe. But a few metrics we can share to help you think about the potential of this channel, the fiscal 2025, retail share of DTC revenue was up about 400 basis points year-over-year, and this is something we saw similar in Q1 '26.

Retail is our fastest-growing segment. In the quarter, it was up over 50% year-over-year in constant currency. Same-store sales growth was high single digits in Q1 '26 and this is also very similar to what we saw in fiscal 2025. So we see consistent and very stable demand patterns in our own retail.

And finally, CapEx per store is typically in the range of EUR [ 400, 000 ] to EUR 800,000, and we expect the store to return that cash within 12 to 18 months. So we are applying our very disciplined approach while expanding DTC further and accelerating it. Again, as the fleet growth in [ matures ], the averages will become more meaningful and useful and forecasting. But for now, there is too much variation to make it a very useful tool for you.

Your next question comes from the line of Peter McGoldrick with Stifel.

Full-price brand representation is really standing out here across the footwear environment. So as we look through fiscal '26, can you share some embedded demand elasticity metrics in the revenue outlook and then talk about the factors supporting your confidence that higher prices will continue to resonate as they have in the past?

Thank you for your question, Peter. It's Oliver. As you know, we're in the middle of '26. So first quarter is over in the second quarter. the pricings are already set and transmitted. So there's no surprise. As I said, we have a very strong order book I think the ultimate or the strongest proof point is the 90% plus full price selling across all our channels.

And again, we take a very mindful approach to pricing, covering the full range of products and a wide range of our assortment and the newness that we create even within certain silhouettes allows us to make precise adjustments on an item-by-item basis. And this is like -- it is not just a single thing on a very well-performing product. It's a broad and very hard to say democratic based, but it is a way moving forward in terms of pricing.

And over the years, I mean, we nearly constantly increase our pricing year-over-year season by season, but always mindful and always in a very close connection with the outside realities. So prices are targeted by product group, price levels in general and by region. So in some areas, in a global pricing architecture, you have adjustments that are regional driven or channel-driven in other parts of the world, they might be a bit different. But in global, it is in a pricing architecture embedded, and that's the most important thing to prevent gray market and all this ugliness.

So in total, as I said before, we are seeing customers moving up in terms of price points to more elevated styles and not downwards. So this goes fully aligned with our procedure to move on. And as you know, roughly, it's always like a mid-single-digit price increase we're taking and that's a very good measurement to move on at least for us.

Your next question comes from the line of Ed Aubin with Morgan Stanley.

So Oliver, at the CMD, you indicated, right, that you expect to grow volume about 10% per annum over the next 3 years, which obviously is close to doubling on an acceleration versus pre-IPO. Sorry to come back on the wholesale and so on, and I know you've provided over the qualitative comments, but can you share with us, we don't need the exact figure, but a rough indication of the number of doors and the number of accounts in the U.S. and Europe kind of since IPO, how it has trended?

And then related to that, if you could give us a rough breakdown or at least some indication of your distribution, maybe just in the U.S. by channel between, let's say, department store, mass merchant, family channels, whatever, that would be helpful to understand your wholesale strategy.

The first part, me covering the first -- the second part of your question first. With regards to U.S. and channel specifically. So what we see, and this is a trend that we have observed now for more than a year. And also that has accelerated with back-to-school that the demand is going to in physical in-person shopping, and this naturally favors our B2B channel. We have 15 stores in U.S., so very small footprint to cover that in personal demand. And we see strong sell-throughs in U.S. with our top 10 strategic partners.

So the sell-throughs are above 30%, and this growth is broad-based. So it includes department stores. It includes sports specialty, and this is the largest driver of the growth that we see here in the U.S. and specifically the B2B channel.

And just a follow-up real quick on the question. So during the Capital Markets Day, we did talk about the number of B2B doors in both EMEA and Americas. Americas is about 10,000 currently. And EMEA is about 9,000, that's total. So I think we also cited within the U.S. about 600 doors of potential and in EMEA, around 1,400 that we've identified as being potential new doors. Again, those are going to be highly targeted to some of our expansionary categories like youth and sports specialty.

Got it. But how this number of doors today compare to the numbers of doors at the time of the IPO, sorry?

We said that it's been about 90% to 95% of the growth has come from existing doors. So it's been low single-digit door growth overall since the IPO.

Your next question comes from the line of Lorraine Hutchinson with Bank of America.

Just following up on that point. As your customer base shifts more toward the newly acquired Gen Z customers. Is there any deeper pruning you need to do, adding and subtracting to make sure your B2B partner portfolio can successfully target this cohort?

This is Oliver. Thank you for your question, Lorraine. I don't know if I really understood your question right. the thing at the moment at [ sentient ] is that they are burning for the Boston silhouette, which is a silhouette that is 50 years old this year. So we don't really have a specific product units for this target group. I think they are attracted by the heritage, the purpose of the brand and this unique easy on and easy off, that's the biggest argument for them. And for some of these Gen Z customers, this is the first pair of [ Fosen ], they ever tried and as we know, we will build a long-term relationship with these customers, and they come back in average, they end up having 4, 7, 11 pairs.

So this is just the beginning of the journey and the touch point with the brand for these people, and we try to continue to be in contact with them and make them other varying occasions or usage occasions for the [ food bet ].

And just quickly follow up on that. David, unfortunately, we did not have all the regional leaders here today to take Q&A, but I can answer real quickly on behalf of David. Our view is from a Gen Z standpoint and the [ use ] standpoint, we are in a lot of the right doors. We are in some of the used specialties, sporting goods stores, where a lot of these shop.

Our goal is obviously to harvest more of them online. We think we're in the right doors from a B2B standpoint. And we're seeing the breadth and depth of our offering within those stores, expanding as the demand from Gen Z [ grows ].

We're going to wrap it up there. I know we only allocated 45 minutes to today's call. We'll be back to the full length next quarter, but we are on a tight schedule today. So thank you all for joining us.

This concludes today's call. Thank you for attending. You may now disconnect.

Good morning, everyone. Thank you for braving this polar vortex to be here with us today. I know it was not an easy journey for many of you, including most of our management team. So we had some miracles in transit. I appreciate that. So we're very excited to have you here at this beautiful venue, and welcome to those of you that are joining us online. For those of you I haven't met, I'm Megan Kulick. I'm the Director of Investor Relations for Birkenstock Holding, and I look forward to speaking with all of you at some point during the course of today.

Before we get started, -- where is my clicker. Here we go, sorry. The legal stuff. So don't worry, I'm going to summarize it. Today, we'll be making forward-looking statements subject to the safe harbor provisions of the financial securities or federal securities laws. These statements are subject to various risks and uncertainties and assumptions, which could differ materially -- which could cause our results to differ materially from these statements. These risks, uncertainties and assumptions are detailed here and also in our filings with the SEC, and you can find those on our website at birkenstock-holding.com.

We undertake no obligation to revise or update these forward-looking statements or information, except as required by law. We will reference certain non-IFRS financial measures as we believe they represent the operational performance and underlying results of our business more accurately. The presentation of non-IFRS financial measures is not intended to be considered by itself or as a substitute for financial measures presented in accordance with IFRS. Reconciliations of IFRS to non-IFRS measures can be found in our SEC filings.

As a reminder, presentation today, including the Q&A, is being recorded and it will be available for replay on our website.

So today, we have got leaders from all over the world, global leaders, the global leadership team. They've all joined us to really bring you deep into the world of Birkenstock. They'll walk you through key areas of our unique and dynamic business model and share with you our vision for growth over the next 3 years. We encourage you during the coffee and lunch breaks to walk the room and see all the beautiful displays that we have set up which walk you through the history, materials and most importantly, beautiful collection, current collection, and we encourage you also to go back in the back and visit our foot scanning stations so that you know exactly what the right size footbed is for you.

We'll provide plenty of time for Q&A at the end but we do ask that during the Q&A that you wait for a microphone so that everybody can hear you in the room and online and that you clearly state your name and company prior to asking your questions.

So with that, we will get started, and I will hand the stage over to Oliver Reichert, our CEO.

Thank you, Megan. Hello, everybody. Yes, most of you already heard the story about Birkenstock. For some of you, maybe fresh to the brand. I just want to give you a quick introduction, what are we talking about. First of all, I think it is important to understand that the core mission of this brand is, and that's a conversation I had in 2009 when I came to the company with Karl Birkenstock himself, now he's nearly 100 years old, so when he made the decision with his sons to give the business into my hands, I was the first manager outside of the family. So it was heavy on my chest to take this order from him. And his order was quite simple said, look, our mission is to give every human being access to the footbed because this is not a footwear brand.

This is not a shoe brand. This is the inventor of the footwear, so an orthopedic medical asset. So quickly look at the growth rates since IPO. I think that's a touch point, we can start the story here is like, okay, what happened 2 years ago. Since IPO, we delivered 72 million pairs of us been into the world. Since I'm with the company, we delivered roughly 360 million footwear to the company. So, so far, we could be very proud about ourselves, about the team, about all the efforts around the globe because this mission that was given to me in 2009 from Karl, I think we did a pretty good job on it.

On the next slide, you see -- that was the day when we probably first met. You saw this bulky, bullish CEO, not really good looking, Marius. And he told you about this ugly footwear brand. And your reaction was to be honest, "Oh, my God, not another boring footwear brand." We tried very hard to convince you that this is not another boring footwear brand because it's definitely something else. And all the arguments we had at the beginning, I remember conversations with Randy, with Barbara to really convince the people to say, look, this is not a one-trick pony. This is not -- we're not having a Barbie moment or a fashion cycle moment or a summer breeze because we are a sandal brand.

Everybody was questioning our strength of implementing Costco was like, okay, no, you may earn the sandal business because you own it, but brown shoe, I don't think you will play any role in this. We defined a few white space opportunities and altogether, the performance of the first 2 years being public, is a revenue growth of 41% and EBITDA growth of 38% and deleverage of 55%. By investing EUR 275 million into the production and the companies and buy back shares in the volume of USD 200 million. So I would say that's a pretty impressive track record since IPO.

You may ask yourself, what is about the share price? I think it's at minus 16%, 17-ish. So the reward is still out there. We came up when we tried to explain the uniqueness of this business, the 3 comps and that was the second moment when all of you shake your head and say, okay, they are crazy. They're completely crazy, holy s***. But look at this, and I'm still with it. We have a purpose rooted or a purpose-driven brand at least at the beginning with Nike, we talked about lululemon as a comparison with a huge fan base, a huge global following, where you say, okay, a relatively small amount of people creating a relatively big amount of revenue every year because of the fans and the lifestyle behind it.

And last but not least, that was the killer I'm fully aware of this was MS. You know sandals from Germany and Hermes the top-notch luxury brand in the world, but yes, we, from inside, believe that this is a good comp for us because the scarcity, the fully controlled distribution strategy and the very high double-digit margins are super comparable with us. So white space opportunities?

We learned very quickly, you give us nothing for our past like 10 years of 20% CAGR, 60% gross profit margin, 30% plus EBITDA margin. So what was the outlook? The outlook was like, okay, we have 3 white spaces. The first white space was APAC from a geography standpoint. We doubled the business in the APAC region, okay? I will call this delivered.

Second white space was owned retail/D2C, okay? We doubled our own retail fleet since the IPO. Check. Third, last but not least, the biggest issue for most of you with the Costas business. It's impossible to gain any relevant share here. But if you look at the details and the facts and you will get a guidance here later on by the rest of the team, we are now at 38% share of business. And if you look at the seasonality, you see it's a pretty balanced business already, more or less. And that's a very, very strong message. And I would say within this, we and the team were very proud of what we achieved in the last 2 years. And I think it's another small or maybe a bigger proof of concept for all of you to start trusting us. If we tell something to you, listen.

Coming back to our comps and the environment. You're all aware what happens out there. This is just like full year '23 to full year '25, the revenue CAGR and the EBIT of the last 2 years. You see like outliers like on in growth, but weak margins. You see LV already had problems, Nike, relatively big, but very slow in growth. You see the Hermes on top on of it. And how you see where we are here Whatever critics you may bring to the table, this is a truth.

We are 1 of the absolute outliers in growth and margin perspective. And as you know, even if you say, okay, this is like the growth we delivered the first 2 years of the IPO, even if you now put it slightly into the left side, we're still an outlier. Nobody is on the right above us, okay? And this is simply a fact. I think we all have to align on now. And yes, and look into the future with this knowledge.

This is another very, very, very important chart because it is somehow -- and it was hard to get all the data and everything. But I think it's important for you from today on, how big is the runway. It's just another explanation of, okay, where do you grow in the future? Why should I invest into your company now? It's relatively cheap. It's a huge runway ahead. And even if you look at our key country penetrations, like look at the U.S., this column is roughly 45,000, 50,000 pairs. So 45,000, 50,000 pairs per million. That's the penetration we are having in the U.S. at the moment. And then you can see all the other regions.

And there -- and that's really a very important thing that even in this let's call them well-established market, we have very huge growth potential. So it's not, oh, they're growing in Asia, they're growing somewhere. We grow in Americas heavily. Look at Europe, look at territories like U.K., France, Belgium, Spain, like assemble them altogether and compare it with other brands you know. And there you see that there is a huge growth potential within Europe. And as you know, the margins, from a currency standpoint, no tariff. All this is playing into our direction here.

Look at Asia. The focus region, we promised to you at the IPO, there's such a big runway, Japan, South Korea. Look at the size of these markets. Of course, this will be a huge, huge growth opportunity for us. And by the way, we have pretty good margins in Asia. We have pretty good ASPs in Asia. So it's not a margin declining region. It's incremental. And that's really something that is I would say this is the to my chart because this is really like, if you look at the growth rates in the segments like cluster A, cluster B, cluster C and D, everything is double digit. So it's the opposite of a one-trick pony.

In every region, in every channel and in every category, we are growing. If you go back to the other chart, I don't know how to go back, but I try it, this one. Here you see impacts of less resilient companies having issues. Look at Nike, you know about LV. They released the numbers. So there is a lot of impacts coming in. And if you look at the global situation the last 2 years, you've seen a lot of pain around us, but there's barely any impact on us in our business model.

So there's one topic that is really important for me to discuss with you or to let you know how I think about this because it's about how do we manage the channels properly. Because yes, in online, we have, I would say, a weaker moment in time at the moment. It's not only with us, to be super honest, because we see a lot of things going on. We're in the middle of replatforming our online business globally. So we are working on this. But we have to be crystal clear, and the analysts know the game. We talked about D2C, but on the other hand, you all should be aware that we only operate 100 stores globally. And yes, there is a huge potential in opening up more stores and balancing out the online business more or better in the future.

And of course, we will work heavily and David and Nico will follow up on this topic, definitely, and explain you what kind of actions and measures do we take to pull all levers to move forward in the online business. And we will continue to grow 10% in pairs of course, on a much higher base in the future. But Jakub will explain later on how we manage this unit growth. But look at the headline, we don't compromise our channel health. We never go from pull to push. This is a promise. We never do this.

And you may question yourself, yes, but look at the growth rates in this territory in wholesale or in that territory, wait till the end of this presentation, and you will see the ultimate truth of are we in a push world? Or do we execute as promised?

So now I hand over to Ivica and probably some of you already make notes asking me questions after this presentation, bring them on. Maybe we talk, maybe be fight. We'll see. Enjoy the day, and see you later. Thank you very much.

Thank you, Oliver. Just before we move further on fighting later, just the latest numbers on Q1 '26 with the preliminary results. Before we go into that, a warm welcome also from my side and also to those who are joining us today over webcast. It's great to have you here and to discuss our story in a bit more detail with you today. So let's just jump right in the Q1 preliminary results, which are out this morning. We delivered another strong quarter. Q1 '26 came in with EUR 402 million. This is the number you already know because we preannounced it already ahead of our participation at ICR 2 weeks ago. This is 18% in constant currency growth and 11% in reported growth. And basically, it's the continuation of the strong demand that we have seen in back-to-school and this strong demand extended also into holiday season, and we see that continuing momentum persisting, but I will leave it to my sales colleagues to discuss that in more detail with you later on.

As expected, FX caused a 670 basis points headwind to our growth in top line. This is basically and mainly driven by the weaker U.S. dollar. So this quarter, the average was around EUR 1.16 a year ago, we have been at EUR 1.07 but it's not only the U.S. dollar, it's also some APAC currencies that are packed to the U.S. dollar that have depreciated significantly over time, and this is where the differential in reported and constant currency does come from. Besides FX, we saw margin pressure from additional U.S. tariffs. And if you look at the adjusted gross margin, which came in at 57.4%. This is down 290 basis points, but it includes 350 basis points of both FX and tariff pressures as compared to last year.

Excluding these effects, we would see a gross margin being up 60 basis points. Pretty much the same picture on the adjusted EBITDA margin, which came in at 26.5%, down 170 basis points year-over-year. Without the adverse FX and tariff impact, we would have been up 190 basis points, and I will walk you through the respective bridges in a second.

EPS was up 50% year-over-year to EUR 0.27, so this is driven basically by 3 factors. One is lower tax rate. Second is improved financial results. It's lower interest expense, but it's also valuation effects from the embedded derivative and third and last but not least, Oliver talked about the share buyback. It's the reduced number of outstanding shares that have contributed to that increase in adjusted EPS.

So looking at channels and segments. We saw strong growth in every segment in constant currency. Americas was up 14%. EMEA was up 17% and APAC was up even 37% in constant currency. On channel, similar picture, as you have seen in Q4 '25. The fastest-growing channel is B2B. B2B is leading the growth and grew 24% in constant currency and D2C continues to grow double digit and up 12%.

So looking at the margin bridge, starting with gross margin and what's driving gross margin. So first, like-for-like price over inflation contributed 110 basis points. So as you know, after implementation of additional tariffs in the U.S. following Liberation Day, we have increased our pricing in U.S. in last July through price increases and we are continuing to increase prices via targeted price increases. This is what we have always done season by season, style by style. You know we own our supply chain. We are fully vertically integrated. We do a bottom-up pricing, and this is what we're continuing to do and we are benefiting from that in Q1 with 110 basis points.

Also and in line with expectations, we improved our absorption, especially with regards to Pasewalk. This contributed 50 basis points, and we are well underway to be fully absorbed in Pasewalk by Q3 '26, in line with our expectations.

As already mentioned, B2B is leading the growth and is outpacing D2C. This impacted gross margin by 80 basis points in Q1. 20 basis points came from some smaller effects, including higher D&A due to capacity expansion and also smaller effects from logistics. And then you see if you compare it like-for-like, this is the 60 basis points expansion in gross margin before external effects kick in. And basically, these external effects are currency translation and tariffs.

And finally, the reversal of the distributor margin. This relates to the acquisition of our former Australian distributor. Their landed cost, that is the book value of their inventories is higher versus the group standard cost and this is what we have adjusted to have a like-for-like comparison. So if these higher acquisition costs are flowing through the P&L over Q1, naturally, the COGS impact is higher, and this is the reason why we have adjusted this the same way we've also adjusted the bargain purchase in the EBITDA.

So moving further to the EBITDA bridge. And pretty much, you see the same picture and the same effects with regards to sales price adjustments, with regards to absorption. There are some smaller benefits also that we are benefiting from including benefits from logistics and so on. So if you compare like-for-like, we are -- came in above 30% and compared to 28.2% last year. And again, you see the same effect in EBITDA on currency translation and tariffs.

So we discussed over the last couple of weeks and also attending ICR channels, and I just want to remind you again that B2B is a great business for us and not a sickness at all. So we see a shift in consumer behavior, especially the younger cohort, which are new to the brand, are choosing intentionally to purchase in-store and multi-brand environments. In general, this is a great thing for us because Birkenstock is a touch and feel products, very haptic product. We are a sit-and-fit brand. People want to experience the quality of the product.

And every single physical touch point with the brand does matter for us. We have globally 19,000 points of contact for the brand, with a customer and run only 100 stores by ourselves. So if you just compare these numbers, you can't capture that physical demand with just 100 stores. We will speak a lot about accelerating our own D2C and retail fleet. But just comparing these numbers and where the demand goes, it's impossible to capture that demand, and this is why we love the B2B channel.

And for us, B2B is also a most efficient way to acquire new consumers as the retail partners are doing marketing on our behalf, and we are able to harvest the long -- lifetime value in our own channels. And also the financial metrics of B2B are very attractive. So the gross profit is lower by 25 percentage points. However, the EBITDA margin is higher. And the EBITDA margin differential between the channels is around 400 to 500 basis points. However, B2B requires approximately 2.4x more pairs for the same revenue if you just look at the ASP comparison in B2B, we're roughly at EUR 40, in D2C, we are at EUR 95.

And of course, this has supply chain implications, which we will touch later on in Jakub's part. And most importantly, in my role as CFO, we have the forward-looking visibility of the order book within 5 to 9 months ahead. Naturally, this derisks our planning. This gives us greater opportunity to plan had to be more efficient, and we know what is coming in our vertically integrated supply chain. So we were leaning in, in both channels. However, we will never compromise on our relative scarcity model and full price realization. We are in a very fortunate position to have these complementary channels which makes the business even more resilient and even more plannable.

So now to the outlook for the next 3 years. We have provided our fiscal '26 guidance already in December and we are reiterating our fiscal '26 guidance today. For the 3-year period ending fiscal '28, we will continue with that growth algorithm. We see revenue growth of 13% to 15% in constant currency, steady margins and EPS growth around 200 basis points above revenue growth. That means EPS growth of around 15% to 17% in constant currencies.

On top line, we see huge runway in penetration, as Oliver as mentioned. And the only limiting factor is capacity. On margin, we are committed to deliver 30% plus EBITDA even in the post Liberation Day world, which is a new world for us with increased tariffs and adverse FX impacts. This assumes, of course, no further tariffs. You never know what will come out the other morning of DC. So we've not factored in additional tariffs and FX, which is stable. So the same FX that we have guided with, which is $1.17. And this also includes share repurchases in the volume of EUR 200 million -- it's USD 200 million per year.

All this said, we are 1 of a kind, and that is true because we have the unique opportunity -- our business provides the unique opportunity combining top line growth, high margin and strong cash flow yield. We've reduced the leverage since IPO from 3.3x to 1.5x and generated over the last 2 fiscal years, operating free cash flow in an amount of EUR 813 million. Our capital allocation priorities remain the same and unchanged. We invest in the business which is the first priority. We'll discuss a lot about capacity buildup in our manufacturing, but also retail expansion will be a core part of that. And this will be our #1 in priorities. We'll also be continuing to further repay debt.

Basically, what we have done very successfully also in the past. And finally, we will also be continuing to buy back shares over time in a volume of USD 200 million per year. And the good thing is it's not one or the other, it's not either or, we can do everything at the same time. So looking back at last year, we have invested more than EUR 80 million in CapEx to grow our manufacturing footprint. We have early repaid EUR 50 million on our U.S. dollar term loan and we have bought back shares for USD 200 million.

So we are -- will be on track to continue on that path going forward. So what does that 13% to 15% growth algorithm means for us? So at the midpoint of our guidance and provided the U.S. dollar will stay on the average over the last couple of months and also on the rate that we have guided, which is $1.17 million. This implies EUR 1 billion of incremental revenue in fiscal '28 as compared to fiscal '25. In simple words, it took us 250 years to come to EUR 2 billion, it will take us 3 years for an additional EUR 1 billion.

What does that mean by region? Americas and EMEA, we see both regions growing double digit. And APAC will continue to grow at double the pace of the other regions. That means APAC will double its revenues over a 3 years period. David, Nico and Klaus will talk about that later in detail. But after now an exhausting session with Oliver and myself, I think everyone is keen to get a coffee.

So I invite you, everyone for a coffee break and we will be continuing in 30 minutes, Marat or less. We are running late. So we're running ahead, so we'll be even less. So thank you very much, and we'll be continuing after the coffee break.

[Break]

Everyone, good news is we are running ahead of schedule. So we're going to have you guys out of here a little bit early, I think, today, which is good. Please take your seats, and we're going to get started with the rest of the presentations. We're going to have all of the segment leaders come up and walk through each of their segments. And then we have a really great product section with Markus, and he will kind of walk you through all of the beautiful things that are coming for Birkenstock. So everybody grab their seat, and I will welcome David Kahan, President of the Americas to the stage to take us through the largest segment of our business.

Good morning. I'm David Kahan. I am responsible for the brand management, distribution and all things related to the commercial side of the business here in the Americas. When we talk about the Americas, we're talking about the U.S. We're talking about Canada. Yes, we do like our friends in Canada, Mexico, we also like our friends in Mexico and Latin America. We also like our friends in Latin America.

I've been here 13 years. So when I heard Oliver talk, even though we're talking about the next 3, I just want to kind of ground ourselves and just go back in time because I go back to the days when we like to say the only people who wore Birkenstock were people who only wore Birkenstock. So this was a real finite universe. And even though over the years, we've cracked open the value, and we've shared tens of thousands and millions of pairs of footbeds and we find ourselves in a room like this that 13 years ago, we would have never expected to be in. What's really unique to think about is the seed of the business back then hasn't changed 1 bit from what it is today. It's still about sharing the footbed with as many people as we possibly can. So we stay grounded in that as we look forward. We treat the brand 250-year-old brand as if we are brand stewards.

There you go. We have developed, we've scaled the business. This is the largest region in the globe. We do 2 dot-com sites between the U.S. and Canada. We have 14 retail stores as of the end of 2025. Just to put that into perspective, 14 of our own retail stores compared to a little bit over approximately 10,000 points of distribution in the Americas. 10,000, and it runs the gamut from better department stores, full-line sporting goods stores, athletic specialty chains, youth chains, family footwear. And I want to say, we also stay true to our long-time sit and fit independent retailers.

Many of them have been with us back when we were that tiny brand in the mid-1970s. We will contribute over 10% growth over the next 3 years. That's the headline. Fact of the matter is mathematically and statistically, just based on the scale of the business, we will continue to grow B2B faster than D2C. Having said that, at this point in time, we are leaning into our D2C business to develop it, and it's going to be led by new store expansion. The fastest-growing segment for Birkenstock is this emerging youth consumer.

I don't like to put labels on them. I don't like to say Gen Z, Gen Z, Gen Y, Gen Alpha. The way I describe it is we use this term emerging youth. Maybe it's 14 to mid-20s. They're your typical American suburban kids and they're coming to the brand right now with the greatest momentum. If you look at the D2C results of our partners, anyone who focuses more on the youth business, on this demographic, whereas everybody is growing, they have the fastest rate of growth. What's most important about this consumer is, we like to say this brand is sticky, right?

We like to say, I think our data, we're able to say, the average Birkenstock consumer owns 3.6 pairs in their closet. For most of these emerging youth they're new to the brand, so they might be on par #1. So they have a lot of catching up to do. Also, just because of their shopping patterns, by and large, they're coming to our brand by our retail partners. There are de facto marketing proxies, so to say. They've shared the brand. So if you think about a D2C native brand that might need to do customer acquisition as a cost of sales, our customer acquisition isn't a cost, we make a lot of profit on it.

So they've come to our brand. And now over the next 3 years, it's inherent upon us to figure out how we crack open the stickiness and the lifetime value with them.

This is -- we're going to start talking about B2B. This may be the most important slide that I put up here because Oliver in his opening talked about the term that some analysts use we don't use it, but most analysts do, this idea of push versus pull model. This slide is the definition of a pull model. This is the defining slide that tells you what your results are. This is our report card. It's not valuation, it's not stock price. It's not anything other than what are our results at retail.

This is just some indicative examples, but it just shows that there are 30, 50, dozens of retailers with these kind of results. So just start, we don't want to name the retailers because it's proprietary information to them. But let's just take as an example, the leading youth chain in the market. 700-plus locations. This past year, 98% full price realization with our brand. The leading full-line sporting -- I'm sorry, go back. The leading full-line sporting goods chain, these guys sell everything from golf clubs to baseball bats to Nike Vomero to whatever, 97% full price realization.

And then when you get to a full-line department store where they play a little bit more of an expanded fashion business, where you would expect a little bit more of a markdown variation, we still run close to 90%, 86% in full price realization. This is why, as a brand, we carry the highest gross margin return on investment for any retailer. That's why the demand of the retailers continues to outpace the amount that we put into them. That's how we manage this idea of relative scarcity.

We have a team of [Audio Gap] that carries out the term you hear is engineered distribution. It's brand management. It's vendor-managed inventory. Every single retailer from a mom-and-pop store on Main Street, somewhere in America, to the chains with 700 stores, every single door, every single style is managed from a stock level, from a planned sell-through level because results like this don't happen by chance. We're not involved in a lot of the promotional activity that they have. And for those of you that have been at some of the meetings where you've heard my little brown banana speech, this is the report card on having no brown bananas. So we're very proud of this.

This is the basis of our B2B business and why our B2B business is different than most others because we don't drop 20 points from go-in margin to maintain margin. It's just a different business. We didn't really invent it but I think we kind of like perfected it between the luxury model and the well-managed athletic models that used to exist for many years. There's not many people in the market who do this.

In B2B, over the next 3 years, this is our plan of attack. First off, I want to start by saying 90%, probably a little bit over 90%, will come from existing doors. By and large, we don't open new retailers. Existing doors means we go a little bit heavier into an inventory position when we feel that we want to or timing on the calendar means that it's worthwhile to do it or an assortment level. We will open some very specific doors. These are largely doors that are focused on OPRACESport where Birkenstock is being found by athletes in different sports.

We are now distributed in the best running specialty retailers across the U.S. and Canada. The Roadrunner sports, the Naperville running companies of the world, these are places where you really have athletes, could be high school cross-country teams going in and buying their running shoes. What does a runner want more than a personal record in a 5K? They just want to keep running. They don't want to get injured. So we say run Birkenstock repeat. We're also distributing -- I just got back from Orlando.

I was at the PGA Golf Show, like what is Birkenstock doing at the PGA Golf Show with like Callaway and Titleist anybody, do you know if you walk 18 holes, an average golf course, does anybody know how far you walk, any guesses? I was going to give out a pair of Birkenstock, if you know. 4.1 miles.

And if you play like me and you spray the ball all over the place, it's probably 7 miles, but 4.1 miles. That would probably tell you that if you put a Birkenstock footbed in your foot choice, you might have a better round of golf. It also tells you that after walking 4.1 miles you might want to put on a pair of Birkenstock to recover. We've just been doing this business for the last, I don't know, maybe 12 months. We're now carried in places like Pebble Beach golf shop, Bandon Dunes.

These are the top golf resort locations, very high-income customers it's really connecting us with the end user and the sell-throughs in the initial test in these markets have been absolutely phenomenal. So we're going to open retail with a very laser beam approach, but more than anything, it's growing in existing doors. That's our B2B business.

On retail, when you looked at that opening chart and you look at, let's say, the United States, 50 states, I don't know, 330 million people, and we have 14 stores. We don't need to be the gapification of Birkenstock and expand left and right but we should have more than 14 stores. I think now we have 15 because we just opened another 1 last week. Every one of our stores is proving to be very successful.

I'll tell you, we're very disciplined when we open our retail stores because people would say, why don't you just open them as fast as you can? My team that does retail stores is sitting in the back of the room. We have a term we use. It's called the bulletproof retail model. And when we meet with a landlord or a developer, we always say to them, "Hey, we love this space. but it has to match our bulletproof business model."

And the bulletproof business model has certain metrics and parameters that we don't compromise on. It has to do with foot traffic. It has to do with revenue. It has to do with we need to return cash in 12 to 18 months. It has to have a breakeven of 60% in year 2, and this is proving to be our winning formula. One thing I want to say about our retail stores and Oliver said about it in his opening, buying Birkenstock is a very tactile experience. There's something really special about sitting down and experiencing Birkenstock.

And for anyone who's been in any of our stores, it's an experiential retail. Like I said, this isn't the gapification of the brand. I live in Marin County in California. Luckily, we opened a store that's about 10 minutes from my house. Because I have so many hobbies and I'm so busy, some Saturday afternoon, I'll go there and literally work in the store and be there for an hour.

And you usually have 3 types of people who come in, three types. Number one is the person who's like a Birkenstock like crazy fan. They're like Taylor Swift fans, right? They walk in and they're like, ah, it's like Nirvana. They think they're in their Birkenstock Disneyland. And those are the people that they leave 5 or 6 pairs. Then you have the people who come in. Some of them are these newer consumers where they own the brand, and they're wearing it. They're wearing it in the store, but they're wearing an Arizona, they might be wearing a Boston. And what do you hear from them? Oh my God, I didn't know you had, fill in the blank, sneakers, boots, all these other things, and you see them adding a different pair.

The third is my favorite because my third is the people who walk in, who are kind of like a little bit confused and they're like, "Oh my God, a Birkenstock store. Like I've heard of you guys, I'm hearing everybody talking about it," but they haven't really gotten it yet. And the beauty of that physical live experiences, they get a full on brand missionary who's fitting them, who's sharing the brand with them. By the time they leave that store, I will guarantee you, they know where the shoes are made, they know the quality, they understand cork and all this stuff and they leave with a pair of shoes. And that starts them on this lifetime experience.

So we will be doubling down on opening 30 more stores. There's no shortage of retail locations. The challenge is finding the right locations with the right peer group that we're going to be sitting next to and associated with and fitting our bulletproof business model. So I save the best for last, our digital business because this keeps coming up for us. I'm kind of on that forefront of hearing D2C, B2B, D2C, B2B, right? We hear it all the time. By the way, the only people who don't use the terms, D2C, B2B are the consumers because they're just shopping where they're shopping.

They shop very fluidly. That's the way they live their life. That's the way you shop. You're not a B2B or a D2C shopper. Having said that, we understand that it's an important metric. So the way I look at this is, we're talking about 3 years. And if I look at my 13 years, over the course of brand management, over the course of the years that we've been here, and we're going to be here, there are different points in time when you need to lean in to different aspects of the business. We started this business. I was here on day 1 when we launched the website. We've only been in the dot-com business for 10 years.

Before that, our office used to get phone calls in California, "Hey, can I buy direct from you guys?" and we'd say, "No, we don't have a website." So I've been here from day 1. We built a business that does hundreds of millions of dollars in the Americas. This is a substantial business. We have muscle in our D2C digital business but here's the way I look at it. This is my like visual. We've been doing squats. We've been doing bench presses. We've been doing deadlifts.

Like we have the foundational muscle in digital. Now we got to get ripped for the beach, like we got to get 6 packs. It's time to like now we got to do P90X. We got to do 6-pack abs. It's just once you have the foundation, now you got to lean into the detail, and that's what we're going to do right now. So there are a couple of focuses.

First off, we know that this emerging youth consumer is digesting content in many places. We're just going to be a little bit more visible there. We're not going to change anything in the way we treat the business. We're not going to become a marketing machine. That's not what we do. We are very true to our DNA, but we need to share the brand in a commercial way where it drives it to D2C. For example, I like to say, if there's a 19-year-old kid in suburban America, and they're fortunate enough to come to our brand by way of a B2B partner, that's great. But how do I make sure that, that consumer will come to us and stay with us over their lifetime.

And of course, the most important thing is nobody has, nobody can have the breadth of assortment and the depth of assortment that we have. So we're going to be a bit more visible and lean in there.

Secondly, is membership and loyalty and events. We have a very robust membership in the Americas. We have over 6 million people that are our members, and it's growing at almost 20% a year. That's good. We need to do a little bit more when it comes to their loyalty. The reason is, as you all know, as consumers, the B2B people have very significant loyalty programs. So not only do they have credit cards, so the average American family, it's not really as much a part of the European business model, but the average American family spreads their debt around and they buy with department store credit cards and they have loyalty programs.

We're going to lean in a little bit more here. We're not going to do anything that changes any of the sanctity of the brand, but we are going to lean in a bit more to make sure that our membership is more sticky. Members spend on our website 13% more on an average order value. So the ROI on any spend and effort that we have against our members should come back to us significantly. And then events, this is something Oliver has talked about this forever. This idea that this brand has such tactile such an experience we showed up at the New York Marathon Expo.

This is the first time we ever did this. But if you've ever run a marathon like the few days beforehand, you go to pick up your number and all of the major brands are there and all the things like Shugu and this and that. We showed it up there, and it was a mind-blowing experience. We showed up at the U.S. Open tennis. We're going to start to do this. We're going to lean into it because that, to us, is customer acquisition, where people are engaging with the brand. We're going to start to do that. And that will all tie to D2C business.

Next is just own brand commerce and communication. This is the nuts and bolts of the product. How we launch product, how we segment product, how we make sure we have exclusive products for our own website? And then last is, you need to not only have the plumbing, which Oliver mentioned, we just did our replatforming. That's basically the plumbing to make sure that the site is functional to do the things that we need the site to do. You don't want to have any of the term we use is tech debt. You don't want to have any tech debt. We have no tech debt right now. We're ready to add on as tools become available. And this is where D2C is always, digital is a transformative business. It's always going to be changing. You're always going to be in flux.

What you think of the tools today may not be the tools of tomorrow. In the Americas, we have a very good CDP program. So we can do a lot of segmenting from e-mail, from SMS. We can do this. We couldn't do this 2 years ago. These are all new things, but what will they be within the next 2 to 3 years, I can't tell you specifically, but you need to be leaning in where there are tools that could be AI-enabled or AI enhancing. So these are the things that we're going to do. We're going to act as a D2C brand. We're going to keep driving demand in the market. We're never going to compromise the DNA of what we've done, the engineered distribution, the relative scarcity.

To summarize, this is the largest market. The business is pretty well scaled here. And sometimes when you think, "Oh my God, I'm walking down the street, and I see 3 out of 5 people wearing Birkenstock." Then when you look at that chart and you look at the population and you look at the opportunities we believe they're still very significant. And my job is to put as much pressure on this organization to keep making as many shoes, keep developing new shoes and keep bringing things to the market because we think we have a consumer here that continue to do this, not just the next 3 years but beyond that.

So thank you. That's it for the Americas. I'm going to pass it off to my colleague, Nico, for EMEA.

Thank you, David. For the Americas part. We're moving on to Europe, Middle East and Africa, the second largest of our 3 segments.

You know that we are founded in the heart of Europe. We are founded in Germany. And now 250 years later after our foundation, we still proudly design, source and manufacture our product in Europe. So the region of Europe has always been very close to our hearts and has always played a very important role. In the last 5 years, we have transformed the business, specifically in Europe radically towards higher quality and higher profitability.

We recently joined forces with Middle East and Africa and now the EMEA region. And today, we offer the best margin profile across the 3 regions. We operate our business in 61-plus countries. It's a really culturally very diverse business, a very complex business, but we do make sure that we are at the forefront of our consumers. In all major countries, we have local offices and local people on the ground, servicing the consumers, servicing our partners.

Our dot com business is operating in 27 countries. I'm going to touch on that, as David did in some further slides down the presentation. and we have a fast-growing membership as in Americas, plus 30% year-on-year. Today, in retail, we operate 42 stores and something that has been not very often shared is that we already now have a monobrand footprint stores, so retail partner stores of 100 in our region. So the total monobrand footprint in EMEA is already 150 stores.

And then in B2B, we service 9,000 doors, where growth is really coming from 90% from within. So since IPO in B2B, but also in the entire business, our growth has come in from existing distribution. And that's why we are so confident about the future. We see three growth opportunities ahead, and we continue to deliver double-digit growth top line, and we engineer the growth towards highest profitability. Oliver shared the slide on penetration.

You saw a lot of European countries that are -- where we drive penetration, where our penetration gets higher, but they are still fairly underpenetrated. France, U.K., Spain, for other companies, really highly saturated markets. For us, these are really growth markets. And we do expect all countries in our EMEA region to deliver against a double-digit growth. Plus, as Americas, we do believe we have a great opportunity in young male consumer, specifically emerging youth, as David calls them, specifically male young consumers, we are just about to unlock through clogs, through Boston, through the Naples.

For EMEA, we are confident that DTC further accelerates, and we will further drive penetration of our DTC channel. It's important for us. We are maxed out with capacity. You know that we are building capacity. So it's important for us to also maximize EBITDA prepare. And that's done with further DTC penetration. And then the third area is our closed-toe business. We see closed-toe continue to outpace our sandals business, while sandals is growing substantially. So not one is going at the expense of the other. And it's also worth mentioning that in closed-toe, non-Boston styles will grow at the same pace or higher as our Boston style.

So really further diversifying our portfolio in closed-toe. We continue to keep supply below demand. As David said, that's really important for us. So you're not going to see us making any weird moves, any stupid things on the distribution. We're going to keep our relative scarcity and the ultimate truth for us is full price realization, as David mentioned, and we will deliver superior full price realization in the future.

So now allow me to go a bit deeper on specific channels and show you where growth in EMEA is coming within each of the channels. I intentionally start with B2B as this channel has been subject to discussion. And I do want to share when we go back into Europe, specifically Germany, in 2022 and 2023, we terminated 1,000 partners. That equals -- excuse me, more than 1,000 partners that equals probably 2,500 to 3,000 doors. So we terminated these partners because we believe their quality was not good. Profitability was not high enough.

So after that, we don't speak a lot about this. We introduced a selective distribution system in B2B. It's a close distribution where we authorize partners to distribute our product, but they have to adhere to quality criteria to be authorized. That's something that not many brands are doing, but that's something we believe we have to do. So we're keeping our B2B house in order. We are keeping our B2B house clean. And at the same time, we are not penetrated, not distributed at all in the segments of sport, in the segment of family and fairly underdistributed in the segment of youth.

So going forward, the majority of growth in B2B will come from our existing partners, simply by widening and deepening the assortment, by becoming a 365 brand. 80% of that growth will be coming from our existing partners. But we will also carefully with discipline expand into these new distribution segments of sport and outdoor youth and family. And our door footprint by 2028 will be lower than our door footprint was in 2021, but we will have better quality and have better profitability. And that's going to be complemented by 80 stores, partner stores. So we're also increasing the mono brand footprint, the partner store footprint wherever we don't want to open an own store in countries that are too risky, too complex to manage or in cities that are not Tier 1 cities. These are the stores that we open.

That brings me to the second area on retail. That's going to be the fastest-growing channel as we look into the future. Now we operate 42 stores. We're going to double the fleet over the course of the next 3 years, and we're going to accelerate our expansion from 12 stores a year to 15 stores a year to 17 stores a year. So basically, we're going to open every 3 weeks, a new store in 2028. We continue to execute against our proven store formula where the new stores are delivering higher ASP, higher UPT and that results in a higher square meter productivity.

We'll be very disciplined and very careful with this expansion. And the bigger the fleet gets, the more important for us is like-for-like optimization. Already now we see through better replenishment, better operations, investing in staff, investing in infrastructure, we can drive growth within the existing fleet. And we believe that's going to continue to mid-single digit and more.

What we do in retail will also have an impact on our online business because what we see is, whenever we open a store in the -- in the surrounding neighborhood, in the surrounding geography, we see traffic uplifts of plus -- of up to plus 65%. So we are quite confident that what we do here will have a positive impact on our online business. And that's going to bring me to this chart, which will be a bit more busy. So allow me to take you through one by one. And allow me to also share, as David shared, we believe our online business is strong.

It has grown organically over the last 10 years. Our first shop that we opened was in Germany, and then we successively opened more countries and more countries, now 27. Now after 10 years of strong growth, we realize that we need to think differently about the future and how we unlock growth in the future and how do we drive and convert demand in online. As I just said, there will be a halo effect, a significant halo effect from our store footprint, from our monobrand store footprint, positive impact on traffic.

And we have identified 4 main areas for us to focus on. The first one is distinctive offering. Everything starts with the product for us. Everything starts with making the footbed available in all its different forms and shapes. And we have to give our consumers, our brand fans a reason to come to us and not to any other partner. Already now, we offer 100-plus DTC exclusive styles in our online, and we're going to continue to invest in that. And already now, we see a higher velocity of sell-through of those styles.

We'll be more declarative around these styles and we launch them better through a launch calendar and orchestrated launches. And we complement that with exclusive services that you're just able to get in DTC and online like repair service, we just brought back and customization services.

The second area, elevated storytelling. Our consumers demand more engaging -- more engagement on our side when it comes to storytelling and content and they deserve it. So we just replatformed with our site globally and we now have the capabilities and the capacities to really become more engaging with our storytelling on site. Already now, we moved a significant amount of our budget into a social first approach. So already now, we are where they are, and we are becoming more content-led and storytelling in our communication.

We're extending our content creator program in social, currently are working with 60 content creators and Spring/Summer '26 will be the first season where we let them explain and describe what they think about our product and how they believe it's making the best out of our footbed. And as David just said, we're going to continue to invest in community events. As you see here, L'Atelier Birkenstock was a 2-month event series in Paris that has a transcending element into social and to digital.

Personalization is important. We want to be more personalized in driving retention with our existing membership. And as we grow this membership, we know more about them to service them better. And that's going to be complemented with a better customer service. Currently, it sits with a third party in EMEA. So we want to become better in customer service and ultimately also use customer service as direct cross and upselling opportunity.

And last but not least, we are exploring different business models. We are currently exploring third-party platforms where the third-party platform is operating at the front end, and we fulfill at the back end, which is driving DTC revenue recognition. It's an exploration phase, so we can't share any names at the moment, but this is something that we are currently very much looking into. And the second area of new business models is, we have built the capabilities for specific areas of the business where we cut out the intermediate where business models were traditionally led by a B2B business, servicing an intermediate that sort of sold our product further.

By cutting out that intermediate and holding -- and bringing these business models to us with a direct business model. So these are the promises that we give you for the next 3 years from EMEA. We're going to expand our high-quality distribution, our high-quality business, and we'll make sure we'll deliver best-in-class profitability. There's material growth opportunities that we see. Geographies, demographics, distribution segments, and usage occasions for the footwear -- for the footbed, that is something that is really important to us, and we explore all of them.

And we're going to do it with a high degree of discipline. We're going to stay very focused in what we do. So no major -- no weird moves in our distribution, no stupid things, and we will continue to deliver the best margin profile across the region. Those are my part from EMEA. I'm going to hand over now to Klaus, who is going to bring us home with APAC. Thank you.

Last but not least, the fastest-growing area. So many of you, we have talked in the last session that APAC has a big potential but it was always invisible. Where are the people? Today, I'm proud to say that I have the whole APAC team here. Maybe you stand up and say, hello. So that you know, we are fully aligned now and fully in throttle with APAC.

So when we started in APAC, and I'm listening to David and also to Nico, the markets in Asia is a bit different. I mean we're talking much more about a mono-brand store market than a classical wholesale market. That's why we also have to set up the teams and we have to look different into the marketplaces generally. Actually, that's why we position the brand very premium, in a kind of a premium luxury segment.

Actually, now we are running 8 stores dot com. We have 245 monobrand stores, out of this 41 are belonging to us. The rest is partner stores. And we have approximately 2,200 wholesale stores, which are mainly coming from Japan and from Australia, a market that we just took over. The APAC region will double the business in the next 3 years.

So there will be two important elements. That's the D2C driven growth. which will outpace the B2B and also a good balanced shoe and clocks allocation. We are, at this moment, already around at 50-50. So APAC has a different approach as we stepped in not as -- in a different moment of the brand. And we had already shoes and everything, which we could put into the stores. The allocation in the stores helps us a lot also to diverse the product.

So our playbook looks like this. We will run own retail partner store retail and digital in a kind of a mono store monobrand environment. We will for sure, keep for our own retail, the priority on the best locations and malls, which we are going to open. Our product allocation, we will accelerate shoes and clocks and we will fill it up with 1774 and SMUs as we are touching higher price points in some of the new stores. What does it mean?

For example, in Tacole in Tyco Lee in Chengdu, we are reaching average price points of around EUR 150 to EUR 170 on good weekends. This is outstanding. And then we will connect through events, what we have already done, where we are engaging with our consumers, and we're doing live events, which are also connecting to our footbed or...

Okay, here, I want to show you how our store formats look like. On the left side, you see the Australian store in Melbourne. These stores opened 2013, and it has a workshop inside where customers can go and get repair packages. And this is engaging very much and is very well perceived by the consumers. The other store is just recently opened in Sentosa Island in Singapore. This store has all the categories you can have in Birkenstock. So we have a test walk area where people can check between -- now I'm losing a bit to -- we can have footbed treats and they have a spa where you can get bookings for treatment. And also you have a foot scanner like here in the back where you can get your ideal foot size on the footbed.

What we are going to do is we will open 70 stores in the next 3 years. We will go with a double-digit like-for-like growth, and we will add another 100 partner stores in the region. All will be a content-led strategy. We will create demand to useful stories, which with purpose and engaging with the customers. We will keep exclusivity on our channel segmentation and we will fill stores with 1,774 and SMUs. And at the same time, we will grow our membership and we have last year already put almost 1 million members on top of our member club.

That is from my side and then hand over to Markus.

Hello. So it's my great pleasure to give you now also a bit of an insight and overview how we will support the further healthy growth, profitable growth of the company from a product perspective. My big advantage is compared to my sales colleagues, so or later Jakub from production that I can bring things to show. They cannot bring distribution channels here, they cannot bring factories. So I will try to also give you some insight, not just about the tactics and the strategies that we have at play, but also show some real-life examples that should also make you confident that there is a lot and big runway of profitable growth for this company.

So let me, in the very beginning, connect to an important point from Oliver's presentation. We are one of a kind, so we are not just one of a kind in the way that we deal and the way that we perform, we are one of a kind in the essence, what this company is built on. And I feel very privileged that I can manage product in this company because this company was actually born out of a product idea out of purpose. And that's very important for everybody to understand who are these guys, shoes company, sandals company and I come to Arizona and Boston in a minute.

The most important thing, it's all derived and built on a purpose. It's product with purpose. We empower people to walk as nature intended. That is very important to understand with dealing with us whenever you see me and quite a lot of these faces I've seen, you've been hearing me talk about it. And that, for sure, is something that was invented or set out some 100 and more years ago, and that will be here to stay in the future, and we will really make sure we take well care of the brand.

So the purpose is written in stone, the invention, the functional vehicle via which we are preparing or we are transporting the purpose to product is the footbed. We are not in the sandals business. We're not in the footwear business. We are in the footbed business and the footbed is realizing with consumers the nature intended walking. This is extremely important to understand. And the last one, the vision piece is always sometimes a bit like every homo sapien and then a lot of people. I will show you in a bit for us, making sure that every human being can have access to the product, to the footbed is something that drives the way that we are building the ranges and collections. And I hope you will see and be confident there's so much runway for us because we are not limiting ourselves in our growth and I will talk in a bit about Arizona to make you understand how we are managing in detail our growth and the penetration.

That is very important, what you saw earlier. We have so much runway in penetration even in bigger, well-established markets, we don't see any limits for further penetrating via product and all the distribution topics that we have been seeing. So this approach has given us an amazing treasure, which is our archive. We are based on a super rich archive. You all know this. We have more than 700 silhouettes in our archive and the big 5 you see here. And these silhouettes are creating across all executions north of 75% of our revenue.

And I want to be very clear about that because archive can also sound a little bit like dust catching and museum like. I know that there might be some concern. For us, it is important. We are celebrating the archive and we're keeping it relevant, and we are making it more and more relevant to more people. And I'll show you some examples, while at the same time, we are constantly building the archive but we show a lot of respect to the archive. We are not in the fashion business. We don't want to be too fast, too quick.

We want to give a lot of respect to these wonderful iconic products. So having said that, I deliberately today want to touch a little deeper with Arizona because I hear that a lot in the Arizona and it's there, and it's big and they are dependent on that. And I want to give you an idea how much work we are spending with our local market teams on further developing the Arizona franchise. And what you see here is just a small selection of different executions of Arizona.

Starting in the lower left corner, I was using here euro RRPs for reference. From the EVA, Arizona on EUR 55, Birkoflor, EUR 90 suede leather and then comes a section, which people who have been with us now for a longer time or followed us, which we have been successfully building over the past years. So the brand was very much active in this segment, that's our home turf. This is basically where you know where most of us know Birkenstock. But we have been building the scale with injected rivets with shillings, with buckle and all the way you're seeing here the Romanticismo execution of the Arizona 1774, which will only be launching in April.

So we have been moving the ceiling up. We have not been waiting or chasing for something. This is what we have been building together with our market teams. And the relevance of the brand, that's the thing. It's not just pricing and being high in ASP. It's in the first place to be more relevant to more people in different regions, in different channels. That is what we're doing here. And by that, we are improving the penetration of the brand with consumers. That is the magic that we're doing.

So we have been building this, and I want to give you just a few examples, how that really works. We are not just building the brand further higher, price point in luxury. We spend a lot of effort there but we're doing it with everybody. We are an inclusive universal brand. That is the positioning that we want to bring to life out there. And I brought some examples, and I'll just take the EVA, because I want to really highlight the EVA, big buckle. Jon, hello. Let me say hello to my wife.

So big Buckle EVA, we launched this last year. You see that, that's just EUR 10 more about the standard EVA, but it gives us an amazing opportunity also in these price points to further differentiate the product. And I can say out of the gate last year, almost 1 million pairs that we were selling with no history to that in the first season, an absolutely massive number, which we are making happen here.

So on top of that, I want to -- suede leather is 1 of our key items. And we are working here with full exclusive. That's also a nice execution where we are wrapping the entire footbed in leather, not just in Piumato, how we know it from the luxury piece, but we're doing it also in suede and we're building price point from EUR 120 then to EUR 180. So I just take 1 more because last year, we had a very significant success with our injected rivets. And what we are doing next year, we are also always launching this year, sorry, I'm still in the '25 thinking. We are launching new execution on rivets.

And I want to say that here as 1 example, we do this all in-house. So what you're seeing here, all the rivets and the placements we're doing with own machines in our own production and all the full exquisite wrapping that you see of the footbed what we do in-house. So having said that, that's great. We are reaching more consumers better price architecture. We have to be very responsible with our resources, and you will be later hearing my fellow colleague, Jakub talking about that, how we are building our skills and our possibilities across all these different price points, and we are very responsible.

And last comment on that, we have a very close eye on managing the efficiency of the collection that we are really making sure we're not creating too much complexity that we cannot deliver. But that is the formula that I want you all to understand, although this is Arizona and Arizona is so established, we see no end of that journey. We are working really deep and with a lot of effort to further differentiate and to further penetrate Arizona out there in the market, and a lot -- you can expect a lot in the years to come.

Deliberately, you might have expected me to start with closetoe because that's obviously something and Oliver was saying at we can be very proud of, but I deliberately didn't do it because it's not just now the people said, it was some years ago, just the Arizona. Now I'm hearing every now and then, oh, it's just the Boston. And you see us being completely relaxed about it because as I was saying earlier, Arizona keeps growing nicely, very stable, very solid at a double-digit growth. And of course, all the rest comes on top of that.

So closetoe has been an absolute major driver of the success with very, very good and robust -- with very robust growth potential for us. But at the same time, I want to point out and we had the point earlier in Oliver's presentation, the closetoe also contributes to our revenue profile across the quarters. What you see here is the revenue share by quarter from 2019. So you're seeing our quarter 1, October until December was some 15% of the business and in the next quarter, Q2 was like really a massive quarter. It still is. But what you're seeing here is the profile from last fiscal year, and you're seeing that the spread of the quarter is really coming much closer together.

So firstly, quarter 1 is historically small, but it's also growing faster in the first place because also the closetoe segment is growing very nicely, and it gives us a much better weight in how we balance the revenues, but also how we can manage the operations behind that, because you can imagine the more quarters we have to get the product out, the easier and better for revenue catching.

This is an absolute important statement for us. We own the sandals category. We are very proud of this. I would even dare to say we've created this segment, we are leading it. And we are not like -- we don't even use these terms oh, Arizona is still growing. It's growing. We make it grow, and we work on that. And there's way more silhouettes, which you can also see here on the left, which are we promoting from the archive, which we are bringing to the front. We're giving oxygen to, but at the same time, we are also launching news in the sandal segment.

But I have to say a lot has been invented already in that segment by the generations before us. Now we can very proudly say that we are also owning the clogs category. This was invented also by this company. And we have the category-defining product, and we are extremely proud of that. And you will be seeing I'm not talking too much about Arizona -- about Boston here today. you will be seeing the exact same mechanism that I was explaining earlier about Arizona, there at play here. And I would dare to say, as David said earlier, we did not maybe invent this game, but I think we brought it close to perfection how we are celebrating, differentiating our archive and how we are, by that, enabling our markets, my set of colleagues who were just talking to penetrate their consumer and countries in a better way.

And now think of this the next click, Happy Birthday Boston. So this year, 2026, we are celebrating the 50th anniversary of the Boston. So we have the 50th anniversary of Arizona 2 years ago. So think of that one of the absolute hottest item in the industry, however, we want to define the industry and already 50 years old and for us, still, relatively speaking, in our portfolio, pretty small. So lots of runway that we're seeing and lots of activities behind that. No one should be concerned. Everybody should be super excited what we are holding in our hand and that we can further accelerate the success story.

Of course, and that is what I said earlier, you have to be careful that archive is not becoming in a museum thing and that dust catching exercise. In the meantime, and we were deliberately just putting here new launches that we have been bringing to market since the IPO year 2023. So all the items, and it's just the selection that you see here in this presentation have been launched '23 and later. And I think we can also proudly say that in the meantime, so where's my friend, John, -- in the meantime, we have created some other very dynamic successes, not out of the Archive, but basically from scratch.

And I just want to mention briefly the Naples, the Naples wrap. So the footbed is completely wrapped with leather and the panel of optics that we are using here, and we were launching it in '23. And I have to say from the new launches, this is right now the most dynamic and fastest-growing silhouette that we have. You saw on the slide before, some very, very interesting growth rates, which are further accelerating in Q1 of this new fiscal year. So we are extremely happy with that.

And you see also there the Lutry, but I also want to point out the Utti, and I saw it also on some people's feet already. So Utti is then fully built on a shoes footbed. So really the deep blue footbed, not on the sandals footbed, deep blue footbed, a very nice flexible construction, classical lace up shoe, all season shoe, also just 3 years old, but a lot of fun and a lot of dynamics going on. So we are making sure that we are -- we can maybe go back to the slide. We are making sure that we are not just celebrating what we have, but we are continuously adding and I want to point you to one number.

Just what you see here with these new ads is 4% of the revenue now. And now some people might say, "Oh, should it be 20%? Should it be 30%?" I say, no, must not. That's a question of the discipline we talked earlier about. We are growing archive styles at extremely high pace, while at the same time, we are really making sure that new introductions are also taking a significant part of the business. And who knows what's going to happen to them in the future.

But we are very confident that we are in looking at the numbers that we see at play that there will be very big dynamics, and you will be seeing and hearing a lot of them in the years to come. So no worry, well balanced between celebrating our Archive, Boston, Mayari, Arizona, while at the same time, building the Archive. And this is also how we were setting up the room and you will see a lot of executions, everything which is displayed here, is either just about to launch or is launching within this year.

So you see a lot of newness also coming and making a good balance to give ammunition for market penetration. Now you might ask yourself, okay, but how do they innovate into the future? How do they create newness? And I want to just give you an idea here what we are really working on in depth and there's 3 pillars we are centering our innovation and newness efforts around.

Number 1 is pure function. We were born in orthopedics and professionals. These are the segments where the company was born, where our founding generation was spending a lot of effort, and they actually -- they established an industry. So here, the innovation effort takes a lot of time. It's very technical. There's a lot of certification work to be done, a lot of preparation work in production all the way to entire new equipment. So this is something we do to authenticate our DNA.

There is a big lever, which is the seasonal newness. And I think all of us making the point in the beginning, we work very decentralized. We have a very, very high velocity of interaction with our markets, and we are receiving a lot of inputs for the markets, and we are trying to make the footprint relevant for the local needs. There is a lot of things which are pretty consistent. So we work now a lot with our team from APAC. So the big streams are pretty consistent.

But in the nuances of material execution, of color and sometimes different executions on the, we are quite reactive to that because we want to make the brand relevant locally, and we don't want to be a brand that is dictating. We don't even speak about creative direction or this, how you know it from other businesses. We are not doing that here. So this is a lever which is very, very important for us.

And last but not least, is the cultural relevance. Of course, with 1774, we've created something in the past years, which is really looked at, which captures a lot of attention and which is further building cultural relevance and pinnacle appeal an aspiration of the brand. Few examples, I could now talk for hours because you can imagine, I'm quite excited about this because I work on these products with the teams intensively. One example from the professional and the pure performance is the Melbourne Pro shoe, I want to show this quickly to you because this is a fully certified antislid and a lot of different technical features, which we've just -- which we are also just launching.

But I want to mention here that this is the first shoe fully PU dark injected, which we are doing in Pasakin the new factory. And this is something which, from a technology point of view, brings the brand to a completely different level and is preparing the future for different type of products, which were at that level not able to do in-house some years ago. So strategically, we are also preparing for a lot of runway of growth in terms of technical capability in our production.

At the same time, we are already bringing the Melbourne every day, if you want to call it. So this is not a certified version, but we are right away taking these ingredients that we're seeing in the professional segment and let it flow into an everyday product, making sure that we can bring the footbed to the people again and bringing a lot of breadth into the brand here. So the close to lace up shoes, we are really bringing a very functional proposition here with already some lifestyle relevance. So I think we are well prepared here for the future.

This is very important from that seasonal pillar where we work closely with the markets. So what's next? So there's the Boston, there's the Naples. There's the Lutry. We are not standing still. What you're seeing here is the Amsterdam wrapped. So we are basically taking the Amsterdam, which is an archive style, a home slipper. It has been in the collection now also for decades and we are executing it in the same technology like we did with Naples. And I hope you can see already on the picture, a pretty slick silhouette.

So now overall, silhouettes out in the market are becoming a little bit low profile, more reduced optics, and we think we have something really, really authentic here that will be a lot of fun for us. And last but not least, Maria. Maria is an archive style and this is sometimes frustrating for product people in here because there's a lot of things that have already been invented many years ago. But some of you who are in the footwear space know that the flat ballerinas, Mary Jane, something is ongoing.

And I think we have a point of view here from Birkenstock, which is also right now developing quite nicely for us and will be a lot of fun. These are the things -- these examples we discussed really extremely closely with our local market team from Europe, from the Americas and from APAC. And then we are really seeing how do we bring it to life? How do we launch it? Very important that all the newness we are doing, I want to underline that, we need visibility. And the wholesale channel, if managed in a quality way, is giving us a lot of visibility in oxygen for these new styles, and we definitely need that.

And with the own stores that we have and even in the digital space, it's quite difficult to create such a visibility quickly. So we are also using quite actively wholesale to make sure that this newness and innovation is becoming reach out there in the market and faster than in the past.

Okay. I want to end it with something that is, yes, absolute the top notch, and I have to say, we are just launching today, and the announcement just went out, Klaus is over there, that with Danielle Frankel located here out of New York City. So an absolutely leading house in wedding attire, we have created, in my point of view, I mean, I'm married already, but if I marry my wife again, we might want to consider that because I think here, everything comes together very nicely. What we're also trying to do in the collaboration space, we always say 1 plus 1 must equal 3. And I think we have that here, not only that we have a super authentic partner.

They are really working around craftsmanship, nostalgia and really setting the tone of the wedding occasion. And we are not just giving a wide Birkenstock. We have really worked in detail with executions on the upper. The uppers are made in Italy. And we have leveled up our game in our final assembly to create such shoes at the highest level. And when you later over there, don't touch them or wear gloves because they get dirty quite quickly. But we've created something which is now relevant and we spoke earlier about the occasion, use occasion for footbed and then we talk about professional and outdoor, that's a use occasion.

And who would have thought that you can be wearing a Birkenstock in a very tasteful high-end way at a wedding. And if the proof was still missing here it is. And I have a little movie here, which should show you also how this is leveling up our game in production. So all of that finally assembled for us in-house in factories.

[Presentation]

So -- and this is not staged, this is not a movie. This is how we're doing it, production, everybody wearing white gloves, and we've really leveled up the game here. I was just there a few weeks ago to be there while we were producing. And I have to say this is something we are super excited about. And again, here, we are lifting the ceiling of aspiration and culture relevance of the brand.

I want to finish it with one initiative called 1774 is more and more becoming about not so much collaboration when we are doing exciting things there, but we more want to evolve and develop also our own brand and our own presence there. And that's why we are now seeking to bring in some creative energy, but also featuring it under our own collection, 1774 Ensemble. And you saw already featured on Oliver's feet that we are also going in terms of shoes and closetoe also here. We are creating own silhouettes.

In 1774 now for the first time and more and more with Klaus and the team, we are not just taking Archive styles because all the partners wanted all with RD Arizona, now more and more to Boston. We are creating silhouettes from scratch, and I want to finish it with a wonderful model, which is called Utti. Utti is a location of 1 of our factories. And the point I want to make here about Silhouette. Now you can ask yourself, what is this? Is this a lace-up shoe? Is this a clog? Is that a slip on?

Honestly speaking, we don't care. We don't think in these dimensions, we want to create own spaces, and we call it internally David and I came up with a bit of a joking around at the shlock category. So something which is an own point of view. And we are creating it. We don't think like, oh, there is a space out there and we chase it. We want to build it. This is what I want you to take away as the final thought, in particular the ones who have not been working with us so far.

This company is not about chasing trends and trying to capture space, which is already somewhere out there. We walk and travel on our own path. We are developing our own segments that we want to own. And for me, personally, as a product person now ask yourself how these margins are possible, that is exactly why these margins are possible. If you're running to spaces where all the others are already sitting and occupying it, don't go there. It's not fun from a financial profile point of view.

So having said that, I think now it's lunch break. Now it's time for you to also move around a little bit or no. We're going to change things up. You want me to improvise now. No, you don't want to see that. That's sorry. But I can leave the stage or -- so I thank you for your attention. We and some other guys and the teams are around, so please also talk to us, look at the product. We can explain some more details and also the strategies behind and the implication into financial modeling. So we hope we can assist you there a little bit. So great to see you here. Thank you for your attention, and I hand it over to Megan. Thank you.

Okay. So we're going to just keep going because I know you guys are very anxious to get to Q&A. So what we're going to do is just keep going with the presentations, and then we will have lunch at the end after the Q&A session. So I know it's also very cold in here, and you guys are anxious to kind of get things wrapped up. So that's what we're going to do. We have a short video for you, and then we're going to welcome Jakub up to the stage to go through the supply. And then at the end, we'll bring everybody up for Q&A, and you guys can ask all of your questions.

[Presentation]

I promise that I won't hold you that long because I have a very simple message here. The message is that our supply chain will be ready. Our supply chain will be ready for -- I don't know if the clicker is working, Okay, will be ready for the unit growth of 10% per annum, which we will require to feed our growth algorithm. It will be also ready to deliver even a higher growth of our production hours as we shift to a more premium product, to more letter executions, to more closetoe executions, which require higher production times.

It won't be a walk in a park, but we're not really nervous about the growth of our supply chain because it's something that we're doing already, something which we have been doing since the IPO, and we have a clear plan on how we will deliver with factory expansions that were already mentioned in the video. I will talk you through that plan. But before I do so, allow me to do a swift refresh on what our supply chain really is and why do we do something that no one else does. Why are we again unique in this, and that is being vertically integrated?

The supply chain or the vertically integrated supply chain is part of who we are. We are a resilient footwear company. We are a resilient footbed producer. We own and operate 7 factories in Germany and in Portugal. We're going to be adding an 8th one with [indiscernible] next fiscal year. In those factories, we make 100% of our footbeds. In those factories, we also assemble 95% of our products with the final assembly step in 95% happens in our factories in Germany. This is really unique.

If we would go back to Oliver's slide with all of our peers on the map, the far second would be Hermes with 55%, so there's a clear question, which probably a lot of you have on your mind and that is why do we want to be different here again. Surely having an integrated supply chain is not -- comes with some difficulties. You might think or you might rightly sort of argue that we have a higher CapEx spend than our peers. You might rightly argue that it's more difficult to scale our supply chain, you might rightly argue that our fixed cost base is higher than for our peers.

And those are all valid points. But know that on a CapEx spend, we have an average payback of 2.5 years. That means if we invest EUR 1 this year, we're going to get EUR 40 back still this year and paid back in 2.5 years. On the fixed cost base, yes, the production comes with a certain level of a fixed cost base. However, a lot of those -- a lot of the production costs are still scalable. You can try to do the math from the absorption that EBITDA has presented. But one fact to put to it is that 20% to 30% of our labor or blue collared labor is temp labor. So we can scale down labor.

We can obviously scale our materials. We can scale down most of our production cost. And the final argument, can we scale fast enough, right? This is why I'm actually standing here in front of you to explain to you that we can scale fast enough to deliver on our engineered distribution model. So the benefits of our integrated supply chain we believe, truly outweigh any negatives there might be laid it out on this page, you saw the attention to quality that we have from our labs to the final step of the assembly.

We're very close to the product. So that transpires into the quality that also transpires to the fact that we protect the IP of a product which is different than our competitors have. We are also resilient.

We are resilient to supply chain risks and shocks. We are resilient to also changes in customer demand. Just 3 anecdotal data here on this one. This year, we'll increase our output of rivets, so those are the small tiny things you can see on some of the products around here by more than 100%. We're also going to increase our output of EVA big buckles, so the EVA shoes with a big buckle by over 50%. And those are already quite considerably sizable categories. It's not a small category, which we're talking about, which is easy to scale, but those are already sizable chunks in our volume.

We can also react to changes in customer demand within a given quarter. We can adjust 5% to 10% of our production plan based on the customer needs, based on our market needs to deliver the product in time. And last, but not least, on the benefits we discussed about our margin profile, the integrated supply chain obviously helps with that by cutting out the middle man.

Ivica has spoken already before on the positives of the B2B model on our production setup. I want to maybe build up on that a little bit. What B2B brings to us as production is higher visibility, higher planability and lower complexity of both -- for both for our production, but also for our logistics. In the logistics case, I think it's fairly simple. So maybe I start with that one always is the lowest point on the chart.

Simply if you ship a big bulk to a B2B customer, it's much easier than to do a single pick into an e-comm customer. So that's faster, that's obviously less expensive in logistics. More than 70% of our units are contracted with a 5- to 9-month visibility. So those are -- that's the share of all of our units.

So for more than 70% of our units that we produce before we purchase the raw material, unless we purchase it to a safety stock, before we purchase our raw material, we already know that we're going to sell that shoe. If you combine it with the number here on the top right, which is telling us that we have a large carryover share. So what we produce this year, we're also going to be selling next year, we can perfectly plan the production way ahead and balance it across the full season. And this is extremely efficient for us in the production, it really lowers down the cost, and it's much easier then to scale up and scale down a production facility.

So the biggest question, however, is if we can deliver the 10% growth, and if we can deliver the 15% production hour growth which is a company with that. And as I've mentioned, this is something which is not new to us. Since IPO, we've added 25% of units. Since IPO, we have added 50% of production hours. We've also been able to cater to the changing demands of our customers and doubled the output of clocks.

And while we were doing that, we were able to reduce our like-for-like cost. The growth was driven by 3 expansion projects, Aruca, where after the acquisition, we had 100 employees. Now we have 800. Paso [indiscernible] we produce our PU and EVA shoes and channels. And as we move to the PU and EVA from Gerlicto Passive, we're also able to fill in the holes of [indiscernible] with more cork Latex footbeds and with more letter final assembly.

So going forward, the 10% growth, the 10% per annum growth has to be fed by new factories or factory expansions. What we want to focus on in the next phase are extensions of existing factories and brownfield acquisition. Why is that? This is much faster for us to scale.

That's the first point, although it's the third point on the page, but should be really the first one. nitinol, we're going to be able to start the production within a year of the transaction. For a greenfield, it might take 2, 3, 4 years. So it really speeds up the scaling. Similarly for the extensions of existing facilities, it's much easier to ramp up an existing facility, have the colleagues who are already experiencing our processes have the management team there, which then also transpires into a better business case on both of those types of expansions.

So brownfield generally are lower price for our [indiscernible] example, we're going to be probably at half of the price of Paseo if you would compare the same sort of output. But also what we'll do with expansions and brownfield is we're going to go more continuously. And this will be better for the absorption.

The absorption will not take that long to sort of fully materialize as we'll be adding lines to holes that already exist in the pace that we can also scale our employees, and we can scale our growth. What we'll focus on in the next few years is letter where we see our biggest bottlenecks right now. But we will design all of our new facilities with flexibility or rather the full network with flexibility to change what we produce in each of the factories so that we can cater to changing demands in the market.

So 3 expansion projects are already underway. I've already mentioned Gorlitz, where we continue to fill in the holes. In FY '27, our capacity will be 1.8 million of the 1 that we had originally before Passive and before the move-out. So that's 2023, 1.8% in terms of [indiscernible] latex, 1.8 also in terms of final assembly. [indiscernible], I wanted to show how huge the facility is. And that's why I have not so nice picture, but it's 80,000 square feet or 78,000 square feet.

Most of it is production, the aim here is to start really within 1 year of transaction. We already have a team build up people from Gorlitz and [ Berstad, ] who are helping with the ramp-up because it's just one hour away it's much easier for us to ramp up this facility than it would be a facility which would be in a different region.

And Arouca, we'll continue to focus on letter components and articles that have higher minutes and labor costs as the labor costs in Portugal are meaningfully lower than in Germany. We're talking about roughly half of the wage price in Arouca, we're looking to almost triple the production space within the next 2 years.

And we won't stop there because in production, we also need to look beyond the 3-year horizon and what will come. So as mentioned, we will continue to look for brownfield opportunities. There is a lot of insolvencies happening in the German market. So we're on the watch production facilities that might come to us opportunistically. As mentioned in the video, we're also exploring expansion of Pasila where we can go to up to twice the size.

There's no decision on that one yet, but we'll assess that going forward. That's for our production. We'll also need to adopt the other parts of the supply chain, and that comes mainly to logistics, which will have to deliver more units. It will also -- also the profile of these units will change as we shift into different channels.

And what is important on the last point here, APAC is growing and we need to support the growth of APAC with different capabilities. So the biggest step for our logistics is to consolidate our warehouse footprint in Europe into less bigger warehouses. It is what will help with that is also shipping directly from our factories into the regions, into Americas, which we're already doing, but we want to scale up what we also want to do is shift directly to APAC.

And then what we want to do in APAC is -- or what we're doing in APAC is looking for a regional which will help with the replenishment of the new stores, which Klaus is mentioning, we need to be with a safety stock in the region so we can fastly replenish stores and cater to customer demands in the region.

Final point here is on the upstream logistics. We are also reassessing how we look at the upstream, specifically on letter where we want to start bringing letter all to one place, inspecting letter in all -- in one place. So I promised that my message is simple, and I'll be quick. I think I delivered on both of those. I just want to repeat, we will be ready with the supply chain. We'll be ready in terms of our production capacities will also be ready in terms of our logistics.

Now we're also almost ready for the Q&A. If you can just keep seated for 2 to 3 minutes while we put here the chairs, and we'll be ready to go.

So we've got questions. We're going to start [indiscernible]

Almost in addition to a you put on the volume a bit barely understand. That's the reason of having a microphone. Much better first. Second part, there you go. Okay. now I got to that. Just thinking about blue versus core footbed. So how do you think about -- how do you choose where to go? Is there a manufacturing discrepancy of product, the supply discrepancy we should think about? And has the customer told you they prefer one or the other?

Thank you for your question, Simeon. I think the penetration chart shows very clearly that we have growth opportunity everywhere. And to your second part, of course, the instruments to conquer or unlock has new target groups of the market might be different. Probably marketing spending is not part of the whole thing because in the original game plan, look at our marketing spending, they are pretty low comparable to growth overall.

And we definitely don't plan to change this because the truth is we don't see any real effects behind it. We just received the study yesterday, and we may share it [indiscernible] received it yesterday night-to-night sorry, that the gen set is the fastest accelerating awareness group in this company. So the awareness we're creating in this very interesting target group globally is tremendous.

And if you ask me how much did you spend on it? I have to show you the middle of the donut, as you know. So it is what David also described in this vivid cooperation with a very strong, very socially very strong communicating wholesale door. If they're doing the job for us and they're implementing the brand on very high qualitatively level, it's a free ride for us, and they deliver the story.

They deliver all this lifestyle momentum around the brand and the purpose around the brand. And of course, we help them with our own online and our own retail fleets, but you talk about the sizes of the doors compared to our own doors. So there's a big opportunity that you won't find business of store and find a wholesale door.

So it is the magic combination of long-term partnerships presenting on a very qualitatively level of the brand and that creates an awareness level in all social demographic. And this is the game plan also for the now underpenetrated areas, how we unlock these territories. But there are several other instruments and maybe Nico can answer the question like what is going on in France.

How do you want to speed up the situation in Spain or in Benelux. So all this will be probably slightly different from the growth algorithm from the power to move forward, it's unbreakable.

Yes. So just to add to this one, Simeon, the fairly underpenetrated markets are also those markets that we took over later from a distributor. So as you know, we are -- we've been around in Germany and the German-speaking region for ages. And France, we took over the market was 2021. So it's just 5 years ago.

So by nature, these markets are in with regards to brand awareness and consideration under penetrated and not all distributors quite frankly, did a good job, and we're representing the brand in the right way. So what we do is we follow the same game plan across all countries. But yes, we're going to put a bigger focus with regards to retail expansion with regards to teams on the ground with regards to B2B partnerships on those in those countries.

So that will help accelerate those countries further and help grow those countries much faster than the more traditional markets.

Sam Poser with Williams Trading. That's why the book is full looking. I have one very long question. Number one, in Europe, with Zalando, is that something you're going to take over and run as a marketplace because the distribution, you have 383 style colorways in Estonia, among other things. And I'm wondering -- and so I'm wondering what you're thinking there.

And also what is the growth plan for EMEA because you gave the growth plan for the other 2 regions, but did not have it up on the slide for EMEA? And then secondly, what is the bridge between the 10% production growth and the 13% to 15% revenue growth and over the next 3 years.

And I have more but...

So before you go with well, let me just take the EMEA part of that. So the growth algorithm for EMEA, we shared is going to continue to be double digit, and we're going to engineer this growth towards highest profitability. That's our promise. And that's how we look at EMEA in the next 3 years.

On the Zalando part, sure you read your report. It's a good question. And if you look at Zalando, currently, Zalando was also operating. They do their own buy, but they also operate as a marketplace. If you deduct all the marketplace offering, which is not owned by Zalando, which is partly an old offering from partners that we work with, but they still sit on product like broken sizes and everything.

If you deduct that, it's 50% lower. And currently, what Zalando offers compared to our side is less than 50% of SKU count. So that is something that is to be considered. If we look at Zalando as a third-party marketplace opportunity, we're exploring that. We can't talk about Zalando as a name, but we are exploring diverse marketplace opportunity to gain better control over what's happening on marketplaces from our side.

The consumer doesn't know that that's what's going on -- is that true -- so why not just get in there, take back all the stuff, get that place looking like Nordstrom here in the States which has 120 colorways on their website because I assume that Nordstrom here in the stage probably does more revenue than Zalando does in Estonia, among other countries. And you don't need 800 and some odd style color waves in Germany or Italy or France either so...

These styles going to naturally fade away. It's really broken size runs. So they're going to sell out, and at some point, they're not going to be there anymore. It's old product, and we're exploring that opportunity with Zalando as a third-party marketplace to get a better control. That's where we are currently, but it's early conversations we're having with them. So maybe coming back to your second question, effectively, your third already. So if you disaggregating the growth. So where is this coming from, basically, and we heard already from Jakub Supply chain is underwriting the 10% growth algorithm when it comes to units.

And then you go further and drill down in the ASP. And what's driving ASP, Basically, the question around your 3% to 5% where this is coming from. The biggest contributor in the past to is, of course, has been channel. And we talked about that.

David spoke about it, and Nico spoke about it already over the past years from starting to see starting online, we grew the penetration already to 38% in the mix overall. And this has been a large contributor also to ASP basically.

And now what we see is that B2B growth is outpacing D2C. And effectively, this is a negative to ASP mathematically. And what are the positives then it's like-for-like pricing, basically, and you've seen the chart on the margin bridge. This is positively contributing net of inflation.

Clearly, a driver. It's close to penetration. So over fiscal '25, [indiscernible] has been up 50 basis points. This is also positive to ASP. And then it's also region basically -- so if you look at the APAC region, the need of the customer, the desire for the customer to choose even more elevated styles, elevated execution, naturally driving price points higher. And these 3 things naturally are the positive contributors to that. And basically, this is how the 3 to 5 are made up over the next 3 years. Go ahead, Matt.

Matt Boss, JPMorgan. So Oliver, maybe to that point, could you speak to your level of confidence on at least delivering on today's 13% to 15% revenue growth plan I think really the question is, other than channel mix, which is tied to the new customer acquisition and the associated supply chain capacity constraints, has anything at all actually changed with the business? Has anything actually changed with underlying demand relative to the mid- to high teens top line algorithm that you laid out at the IPO.

Thank you for the question, Matt. we see unbroken demand, okay? So we all see that there is a kind of a slowdown in our own online, which is we see this all over the places, not only with us. David brought it up. Nice brought it up. We are, of course, work against this and replatforming is just one of the actions we take. But the growth algorithm you see today in the 13 to 15 is not coming from slowdown in demand or capacity constraints.

It's coming from having a globally clean markets. So we're definitely not shift or unbalanced the 2 channels from wholesale to D2C, we need to keep everything balanced. If you look at the resilience of this brand since IPO and you know what's going on. It was like from more Ukraine to energy crisis in Europe, currency tariffs, all this craziness out there, we are a resilient brand because we balance it out. And could we grow faster in wholesale, yes, we can, but what would be the result of this? Okay?

You talk about ASP, you talk about revenue generation in this and is in different segments. We have the full piano, okay? We can decide in which area of the world do we get the best profitability out of this pair. And this is where we will execute in the future. And this is why you see for the next 3 years, a decline in growth algorithm compared to the 1 we picked when we filed for the IPO.

That's the only thing. That's the only difference. It's not the demand, it's not brand heat, this is not the issue. We need to come back to the point we say, hey, we want to have top clean markets. We want to have the best-in-class distribution and we keep everything, every channel should be balanced.

Same truth for the APAC region. Same for EMEA. And of course, if you put all perspectives together, there is an impact on the U.S. business, which is 55% of our existing business at the moment, yes? And of course, one would expect that we need to shift in the other areas as well because you see the growth in APAC, and it's a very attractive ASP market.

It's a very attractive margin market, same within Europe. Okay? So the margin profile all over Europe, and you've seen the underpenetration we just talked about, Simeon, I mean, all this underpenetrated market in Europe are creating a big runway with a very -- and maybe Nico was to quiet on this. But the margins in this area are super, super strong. So I know online is anonymous for brand heat, could be. But look at us.

We have -- we are hotel and we can sell shoes everywhere, but we keep it balanced. With steering. What you see is a steered growth algorithm. It's not go to the maximum, whatever. That's not how we operate this business. That's why I started with the mission [indiscernible] gave to me. It's not about quick and dirty. It's about long way, and it will be longer than my life and longer than your life. You have to accept this.

We'll get to everybody's questions I promise you.

Christina from Deutsche Bank. So Oliver, you talked about the success of obviously, the close to business. It's now close to 40% of the mix. It's been a nice contributor to -- how do you see the close sell performance within your 13% to 15% growth target? And how do you think about the need to invest more in brand building?

Obviously, you talked about storytelling, more content creator partnerships, do you think you need to invest more to increase the consumer awareness. There's a lot of people that we talk to that doesn't even know that Birken stock sells, layup shoes or boots. So can you talk about how you view that potential need for investment there?

Thank you for your question. This brand is hot for 250 years. It's burning constantly. Could we create a bigger fire? Yes, we can. We waste a lot of wood yes. So it's a perspective, okay? And that's why it's so important to do the broader view on, okay, what is going on in the rest of the world.

Honestly, what would we get for bigger growth rates? The awareness is there. It's already bigger than our capacity -- so there's no sense in putting more petrol to the fire and make it bigger. For us, it's a balanced approach.

And if you think about the third chart I presented with the positioning of Birkenstock of this 13% to 15% growth and 30% plus margin. There's nobody out there. Nobody delivering the same combination. Nobody. So what should we do? Should we go faster grow -- and then you would change around and say, "Hey, what's about your margin?

So this is for us, this is the pace, and that's what we deliver. And look back last 2 years, 41% growth in revenue, 38% EBITDA, 30-plus margin, all good buyback shares, investing $275 million in the business. That's a pretty solid thing. So now you might...

Okay. Let's go with Laurent then Michael, then we'll come back over here. And then we're going to move back promise.

So Laurent Vasilescu, Pariba. I've got a 2-part question here. You're guiding for 57%, 58% gross margin over the last few years with Pastella there was a factory absorption. As we consider the 3 expansions, 1 of them obviously is a new factory, but could we see an impact there on the gross margin over the next couple of years?

Or is it a different situation? And then the second part of the question here is, I know you guide to EBITDA, but tax rate is pretty high in the high 20s. Is there an opportunity for the tax rate to go down and potentially pay even pay down the TRA, which I think is an EPS drag to your business?

That was more than 1 question, Laurent. A new -- so on gross margin, so right or it's 57% to 58%. This is we'll be guiding in the 3 years plan up to and including '28. Reality is tariffs and FX are hitting us. And this is what we also mentioned when we spoke mid-December on our guidance. So if you add back the impact of tariffs and FX to gross margin, we are perfectly in line with our previous long-term goal of being in the core of 60%.

And this is sometimes what people forget that this is hurting us, and this is outside of our control. And if you look at the bridges basically today, you see that we are getting operationally better in terms of absorption in terms of the pricing, how we do pricing in terms of all the efficiencies Jake spoke about in production. But at the same time, we will be continuing to invest also in our business, be it retail, be it the ramp-up of factories.

So yes, over time, there is this drag, which is outside of our control, but over time, we will also be operationally better while investing and continuously investing in our business. And this is coming directly back to how gross margin will develop over time.

And then remind me, Laurent, the second part of your question was Yes, tax rate and the year rate point. So the tax rate has come down, and we see immediate benefit of the tax rate -- it started already in Q4 '25. As you know, the lion's share of the group's tax expenses fall to Germany. Germany has a higher tax rate as compared to other countries in the group and worldwide. The tax rate in Germany will come down, starting effectively 28 over a 5 years period.

So the corporate income tax rate will come down from 15% to 10%. We are immediately benefiting from that. in the deferred taxes and the actual taxes will kick that in, in 28 basically. So this is why we have guided in the corridor of 26% to 28% as the effective tax rate and this is considerably lower as compared to the time where we guided at the IPO, which then was 30 million. So the benefit of tax is already in.

There will be further benefit, but then 28 and going forward. And the last part on the TRA. Yes, we will be paying down the TRA. So you will see and this is what we also -- and our cash flow was baked in the cash flow plan 426. So we expect fee rate payouts of around $60 million and the repayment of the TRA will also start with fiscal '26.

Michael?

Michael Binetti, Evercore. Thanks for the detail Holli, just a simple one. When we come back in a few years and look at the long-range plan, what did you laid out here today do you hope the most you will have outperformed the targets by?

And I guess maybe just help us talk about what a point of upside looks like to the 13% to 15% revenue growth as one of the only manufacturers, a lot of the analysts in here cover.

You guys have a lot of fixed costs, a little different cost structure. I'm curious what a point of upside would look like on EBITDA and then a similar question. Obviously, footwear businesses go through cycles.

What does the point of downside look like during a period of revenue headwind as you are building manufacturing capacity, adding fixed cost to the P&L.

Michael, happy to take the first part of the question with regards to -- oh, is there any upside to 30% plus I mean, 30% plus, and this is what you need to keep in mind, we're guiding 30% plus in an environment which is much more challenging than it was at the point in time when we've been at the IPO.

So this 30% plus is based on the U.S. dollar at 1.17, basically. So it includes that drag. I mean you're all following the news. We've been at 19 and 20 over the last 3 days. But we've baked in the 17 and also, we have baked in the additional drag from tariffs. And this is something that you keep in mind, so apples for apples.

And also we've mentioned in the earnings call in December, if you add back these adverse effects, hey, we are operationally better. And this is very much important if you think about that. And what is the drivers, again, behind margin if you think about gross margin and further flowing through to EBITDA Yes, we are a manufacturing company.

We are looking into every process, every step of our manufacturing through the entire value chain from sourcing raw materials on Markus and up to logistics to Jakub. So managing raw material prices managing labor prices, managing our processes will never be a 100% automated production company. This is not what is going to happen, but we will increase semi automation.

So all the production steps helping us gaining efficiency. And this is what we'll be constantly doing and what we've also done in the past basically. But also 1 point that is important at that growth pace, 13% to 15%, yes, this requires investments.

So we will be ramping up our production, we will bring on life new capacity, but also we will be investing in our retail footprint basically and this is something that needs to come together and needs to be balanced over time. And this is something that if you take all that together, we feel very comfortable and we are committing to 30% plus.

And if there's any upside on the way, they will take it. But also keep in mind, it comes with investment over time. Natasha?

I'm sorry, you had a second question about what 1 point of...

I can take it. Michael, it's the way how we see the business is a balanced perspective. So we don't do this all in things, okay? That's how we grow our business from a sales perspective, but it's also how we grow the business from a production perspective. So just to give you -- it's a multilayer planning thing. So you have a machine operated by 8 people.

You can do this in 1 shift, in 2 shift or in 3 shifts. Okay? So you breathe in and out in your shifts 1 layer. Second layer is these 8 persons. Are they all fully employed? Or do we have part-time workers here in between? And the part-time workers could be up to like 30%, 40%, so you can breathe in this segment as well, okay?

We prepared it always like this. But the history, it is us so far, we never break out. It was never the case. So it was never enough, and we're always running full speed -- but globally, this is the approach how we develop our production in the factory side by having a relevant share in part-time workers, having the full flexibility in operating at 1, 2 or 3 shifts.

And that's always coming back to you because you were part of this journey from the first day. when you ask how much shoes can you produce from this factory. It's a number that goes from 2 or up 2. So it's really like okay, how often do you play the piano and do you play 24/7. It's a different outcome than playing it 1 shift a week.

Natasha.

Hello. So this is Natasha Bani from Morgan Stanley, and thank you very much for having us today for all these amazing presentations. So obviously, you've been successful at being a pull model and on the date which Hubard obviously, was the debate of moving to a [indiscernible] the share of wholesale -- you've explained that obviously you have the luck that you can choose where you grow going forward.

Can you share maybe the average level of demand you fulfill that wholesale, wholesale partners, that would be helpful and how you manage allocation and assortment to B2B versus D2C? And maybe just also a follow-up on the previous point on gross margins. In the video, you showed. You mentioned the possibility of improving margins further from automation. Now you said semi automation, but is that something we could see in the next 3 years? Or is this probably a bit more forward-looking. Thank you very much.

Happy to come back and touch on the question with regards to gross margin. I mean, we are a manufacturing company. at the heart basically. So we are constantly improving all the processes everywhere in every process in every factory. So there is no need for us to wait for the next 3 years.

It's constantly happening and scale naturally does help, but scale comes also on the other side with investment and ramp up. So this is a natural for us, it's not unnatural, basically as we do it have ever done it, and we'll be continuing to do it.

So no need to wait. It's happening already.

And maybe I add something here Natasha because the investment in [indiscernible] was quite unique. Just as a reminder, the of war in Ukraine collapsed completely when we start the construction site. So we had phone calls, people calling us saying, hey, the construction metal is coming from [ RioPol ] in Ukraine. It's under Bombard mall, there's no chance to get anything out of it. The good news is you have to pay triple the price for it. So the situation around the building costs of Pasir were quite unique. As another reminder, it was done before the IPO. So was already priced in, okay? And part bulk is a bit unique also from the perspective of, okay, what is coming out of [indiscernible] if you listen to the video, you may learn that, okay, they're producing the EBA in [indiscernible]

They're producing the [indiscernible] And for us, it was important once we further unlock the APAC region to be ready with the PU production because Markus showed you some direct injected versions of close shoes with very rigid outsole, fully certified.

But for this region, like tropical, humidity, water readiness is definitely an asset -- so it was -- for us, it was important from a portfolio standpoint to have this muscle on board, which is dedicated to EVA and PU. So that's why the absorption of this factory was mainly coming from 2 different styles, the EBA and W. Everything else you see today in terms of investment is based on a very huge range of articles, okay? So if, as an example, increase our [ Coglatic ] football production, every single payer will help digesting the OpEx in it's just like comes natural to digest these one-off costs and scale them up quicker.

So don't take Patava as a raw model to simulate in your models that per $100 million, they need to have 2 [indiscernible] okay? Jakub shared some of his views. I think you said $2.4 billion years, right, on average, but it's really. It's a different animal because if you look at the preproduction facility in Portugal, right now, they have an output of 5 million pairs. So it is a very fast-growing thing, and this is relevant from the beginning, okay?

And then we grow accordingly. So it's not -- it's incremental in terms of output, which is actually needed for us. And then we have to decide from a sales perspective between Nico, Klaus and David, where do we put the pairs, [indiscernible] the best revenue sitting on it. And that's the game.

Just you had a follow -- your first question was on the percentage of unmet demand.

Yes, you had a question on supply and demand and also pull versus push for us, as we laid out, the ultimate metric is full price realization. And with our full price realization, I think we can clearly say we are very far from a push model.

It's still a very, very strong pull model, and we do everything possible to preserve that full model. And Markus showed a beautiful slide of many, many different Arizonas across different price points. If we just had one of those models, our demand would be a fraction of what it is right now because we build demand, we invest in this model from all the different price points.

So nature, the demand grows as we further invest in specific silver. So don't -- please don't see in demand something static that we deliver against and then there's a certain threshold and then the thing collapses. It's not the case. The further we invest in specific silhouettes and specific usage occasions, the more the demand grows.

And that's something that's also quite unique for us. And just to give you a number because you need to write it down and you access yet. We believe that in these penetrated markets, we have a headroom of, let's say, 20% and demand on top of the existing 1 or maybe 30.

But this is really not the measurement. The measurement is if you balance this out in the upcoming markets, how much of this demand do we need to develop the other regions to bring them on the next level? And then also, which is the other layers, okay, in which channel, in which geography and what is the margin? Because globally, everything is somehow in motion, and this is the beauty of the resilience of this brand that we have the freedom to choose where do we put the product.

And with an underdeveloped demand because demand is always higher than our supply, we have a big freedom in a big lag space. to execute. And then in some regions, the unfulfilled demand will grow and getting smaller somewhere else. So -- but again, what is the guideline for us to keep it balanced, keep it balanced and mindful and not doing quick stuff.

It's like step-by-step organically, people need to digest what's going on inside and outside.

So let's go right here to Lori.

Lorraine Hutchinson from Bank of America. I had a question on APAC. How it's developing the e-commerce business differed versus other regions? And how are you managing your own D2C demand online versus third-party sites.

So the digital business is quite new in APAC. I mean we opened 4 outlets since the IPO. So we're in a very early stage. And at this time, we are scaling up and doing a lot of direct events with people and bringing them online.

And in China is, for sure, one of the most developed digital markets where we are learning a lot and taking them as an example, also for using new technologies to go faster and come closer to our customers. And the second question was against how we...

Our own DTC versus third-party market.

Our own D2C was this third-party markets. Good question. Growing the on DTC with the retail part. I think that's the most important to create the awareness. And I think that's what we focus on right now.

Then we'll come back over here.

Jay Sole, UBS. However, obviously, company has done a great job. You can see from the slides just this growth, the margins, the returns, everything, you've done everything you said you would do at the time. My question is, today, the stock is at 3770 and time the IPO had priced at 46%. The question is, what can you do to make sure the company gets credit from the market to the growth that you're delivering and for everything you're doing that you said that you would do?

That's a good question, Jay. I think we, as a team, we can only deliver what we promise. We stay on our track. We do our work. Honestly, I think it's quite helpful for the operational teams to not look at the share price too often because if you have this kind of disconnection between your growth and the level of excellence, how you deliver quarter-by-quarter, and then see this reflected in the share price, this is a clear disconnect.

So what we can do, what we can deliver is very simple. We have to fulfill our mission, and our mission is to deliver what we promise. It's the same game. It doesn't matter if we are family owned. If we are belonging to a conglomerate of different companies, financial investors or if you publicly listed, it's just okay.

You tell the story about the brand, you do the business, you're responsible for this, and then the market will follow. That's what we see, and that's what we execute. Don't expect us to do whatever we cannot trigger this. We do all we can. And I mean the whole team shows confidence moving forward.

I think we are one of the rare companies showing up in such a bandwidth because I do believe that having a smart CFO and whatever CEO is not very helpful at all. because the truth is everybody wrote the boat, and this is a team effort, and it's not just a one-trick pony, not even from a presentation standpoint. Okay? That's why we're here. That's why we want you to see and it's also important from inside from our team to listen to you guys.

What is your perspective, what can we improve in communication, in storytelling because. This is more than a brand for us. It's a love. It's an emotional connection to the brand. And it's different for all of us, of course, but we all connected to this brand. and that connects us, and this is what we bring out to the world, and this is how we create the business.

And we are very proud, especially I'm super proud about the team and the efforts and the heavy lifting they're doing. Especially in this environment. And if they're not getting rewarded by the share price, okay, that's it. The only thing I can do is that just do your thing. And that's what we're doing, whatever the share price delivers?

Okay. I think we'll come back over here, Janine then [indiscernible] and then we're back there.

Janine Stichter from BTIG. Just want to follow up on the allocation process. As you allocate with your B2B partners. How much of the assortment of the mix is dictated by them versus you? Is that changing at all? And then maybe one for David. Can you speak a bit to segmentation, just your overall thought process there? And what kind of product overlap there is between the different B2B channels

Yes. First off, on allocation, and the word gets overused because A lot of people say allocate and it really means what the retailer gives you an order, that's the allocation. We do complete the opposite. It's completely vendor managed. It's a little bit of an art and it's a little bit of a science.

And this has been going on since really Ralph Lauren invented it 40 or 50 years ago. I think we've taken it to a higher level because we do it by door, we do it by channel. And you also have to do it by calendar because there are windows and time when your stock levels need to be higher and need to be lower.

I mean during back-to-school, you want to make sure that if somebody is making the trip to the mall and they're coming to get your product, you don't want them disappointed. Two months later, you might run the inventory down a little bit. So again, it's a little bit of an art and a little bit of a science.

How much is mandated by the retailer. I don't want to sound too abrupt in saying this, but 0. We our allocation means we create the assortments that you see out at retail. The retailer is basically just to conduit to bring it to the consumer.

If you walk 10 blocks from here and you go to 57 Street, and you look at what we look like in a major retail department store every single shoe, the quantity that's in the back room is planned by our team. That's what we do.

We're a sell-through organization, not a sell-in organization. And the result of it is your report card, your gross margin return on investment and that means that the retailer has more of an appetite season after season, and you little by little, grow the business.

Depending on where you think you're segmenting and where you're reaching that customer. The term segmentation also, it's something that's maybe a little bit past say in the industry right now. we don't really strictly segment as much as people used to at least here in the Americas, there is crossover because consumers shop in different channels.

It's the same consumer. We try to give them a different experience based on where they're shopping. We try to allocate differently. But the way I would liken it to you it's like a 1,000 piece jigsaw puzzle that we try to make the brand picture, and we just take the pieces and create them and there's a lot of people who are just experts in the channel and experts in the business and I would sum it up by saying our person who handles any retail account is more of an expert in that account than the retailer's own buyer, and that's the way we treat this brand.

Okay, Paul?

Paul Lejuez, Citi. David, maybe sticking with you for a bit. On the Americas, Curious on new store growth in the Americas. Can you talk about what you see when you open a store, what do you see in the e-com business? What do you see in the nearby wholesale B2B accounts?

Also would love to know what sort of new store productivity plan and then also on the B2B side, you talked about several hundred new doors. Curious if you could talk about which segments, which of your partners do you see those opportunities?

Yes. Most of the new doors won't come from current partners. There might be a little bit of rounding out of portfolios. But when I listed those 600 doors, they are, by and large, very small specialty locations, for example, like the Pro Shop at Pebble Beach or a very high-end running store in like Westin, Connecticut, or something like that. They're very, very laser specific.

As far as when we open a new store, we do see an uptick in our D2C business from like a let's say, I don't know, a 100-mile radius. It doesn't happen immediately. I think we've seen initially, we get a little bit of a pop, then it really spikes and then it kind of goes down to a bit of a more normal level that's below that spike, but it's still higher than it was beforehand.

So certainly, the stores do act as a little bit of a lightning rod in an area as they should be. And they also act as points from membership. Remember, you can become a member in the store. We do buy online, pick up in store. And by the way, 7% of our store business is what we call endless aisle. It's somebody that we fulfilled something online but the store gets the sale. So it becomes one channel.

I don't know if I put a number to the productivity, but if you're looking for like $1 per square foot or something. But from a I would just say everything is running ahead of our initial expectations in every location that we've opened so far. And I think that's where that discipline is.

I mean, to tell you the truth, more terrified of opening a bad location that I am finding a good location. There could be construction on a street. There could be a restaurant that you think is great that goes out of business. There's 1 million things that happened in retail that could impact your best laid plans. That's why you have to kind of be super disciplined with it.

Okay. Let's go to back there Dana.

Dana Telsey from Telsey. When -- with the IPO, one of the things you talked about with product and product is obviously a key driver where the top line and everything else comes from, is opportunities to expand in different occupational areas.

Whether it was restaurants, health care, how do you see the product development in the different regions? And where are you in that occupational in that occupational opportunity. I'll take the first part of the question because I think it's -- for us, it's a clear task to bring full pattern to the people.

That's why it's not of this mission because that's the core of whatever we do. So the truth is, this was the origin of this brand. Being in this professional environment, every dentist, every doctor, every nurse, they came -- they brought the brand to daylight because they they're wearing the brand in different environments or the chefs were the brand.

So it's like it is somehow coming back home for these people. Now talking about the business perspective of this is -- and it's a global thing, by the way. So there's no difference because all the major chefs are international.

All the being a doctor is an international job, you can work wherever. So it's pretty much in line. But the beauty of this business is that these people, once they are with the brand, they say with us and what we can arrange here is a pretty interesting business model that's coming from our -- is part of our DTC branch because they can simply order -- they are styles, their executions with us directly, no middleman in between. And this is the ultimate goal we see in this professional segment and also, by the way, in the orthopedic segment.

So in soles, pimp up your running shoes with insoles, golf shoes, David talked about this. So there is part of what is a professional environment. It could be a golf shop, could be a golf club, could be in other environment. But ultimately, they should come to us directly online.

Once you know your shoe size, can pick, you can replenish. You can fill all your different apartments, houses, wherever you are and keep these things available wherever you need them. So that's the beauty of this business.

And the core of these people, they know exactly why they buy more coming from the purpose perspective of the brand and less of, okay, what kind of color execution, what kind of fanciness is this and that. So that's why we go very wide in the segmentation here. And the business model itself, is very, very interesting from margin, gross profit margin, EBITDA margin from every angle.

But Markus, you can add some more.

Yes, I thought the second part was more about distribution. So I'd love to talk about product, but I think it's interesting if you guys give some examples...

I can give you a bit of context on EMEA. EMEA is the largest business in Professional across the regions. And we were, for the second time at the largest trade fair A+ in Diesel Dorf, and we got a huge response.

So this whole professional piece has been forgotten a bit, I'd say, because we are so successful with the fashion part of our business but through a direct approach on a trade fair with these intermediates with these large associations like hospitals, like astronomy like workwear associations, we have now a much more direct access to them through that trade fair. And we can definitely see this business over-indexing total growth in EMEA.

And that is driven by new innovation. And Markus, as you can, I think, for sure, talk about the innovation that we are bringing. It's certified innovation. I think that's the point of differentiation. It's not just innovation for the sake of being innovative. It's really certified for the specific usage occasions. That's something that will probably take a bit longer, but it's much more sustainable as a business to unlock because it's not seasonal.

It's not cyclical. It's a steady business, and we are quite pleased with the progress we make in EMEA.

And just a quick 1 from the product. I mean we went now through a complete work over of the line in professionals in the past 2, 3 years. after basically some products have been in the range for 20, 30 years, sometimes so the rework has been done. But I think the big work now lies in distribution and building up the models and penetrating the market and also they are building awareness again.

That is a bit of a sad story because we invented it. Honestly speaking, we were really very early mover in that market. And as you rightly said, there was maybe a bit of insufficient attention, but there's a lot of effort now going on in the markets individually, also in APAC and in the U.S., we have activities everywhere. It's not too much now from innovation, innovation to be done small penetration, bringing it out there and landing it.

Anna Andreeva from Piper Sandler. We had a question on digital and to David. It was really interesting to hear Nico's presentation about the efforts digitally in EMEA when it comes to personalization, some of the specific to digital styles et cetera.

Can you talk about where are you with some of those initiatives in the U.S., especially considering that the younger consumer that you target is so digitally native I think you mentioned re-platforming the site when can we expect that?

And I'm not sure if you have an app for Birk currently, I don't think you do maybe some of the plans for that. And just as a follow-up, can you guys talk about some of the learnings from APAC to other geographies.

APAC, obviously, is very digitally native. So curious if any learnings from that.

Thank you. So I start with the APAC learning curve because I'm heavily involved here in this. What you can see what you learned from APAC, especially like Southeast Asia and China is that okay, there is this platform business, more or less like marketplaces.

That's 1 part of the business. And then most of this is event driven, okay? So doing shopping events creating this buzz around the brand. Normally, to be super honest, in China, it's all price driven, okay? So discount, discount, discount Tiffany is sitting here in the second row, you belong to the first row, but you know that. And she is managing this kind of business, but she's not attracting people by price reductions.

She's going into the full price direction. And that's a different game, but it's also somehow event-driven. So the ingredients and the tool set is the same, but the reason why it's completely different because normally, big brands that go for, I don't know, the Black Fridays. They have several Black Fridays, constantly changing names.

So I probably don't need to remember them, but it's all coming through pricing. Okay, 20% off 30% off 70% off the platforms try to push you in this corner as well and say, okay, you have to do this. If you want to take part of it.

And we manage it very, very strictly. And that's why the DTC muscle in China and that Klaus tried to explain it to you earlier in the question is like okay, D2C is definitely own retail driven, especially in Asia. We had a very experienced guy in this region to execute this rollout on retail, and you see how quickly the own and partner retail is increasing in this area.

So this will be a very strong muscle in a very short time. And it's -- but the focus on this is not price and reduction. It's about full price, it's about luxury, it's about a very high level and I don't know if it was part of the presentation.

I think we mentioned that in some of our stores, we already have 30% or 40%, 70%, 74%. So the bandwidth in terms of pricing in China, it's the opposite that what you can hear from if LV is reporting their numbers from China or other regions, there's no price sensitivity in this area.

When it comes to this brand because it's also this magic mix of scarcity, brand heat and then purpose-driven mentality. Very Asian mentality to say, okay, this is a tactical optical product.

I go, I listen, I have this huge history behind it, [indiscernible] over 250 years. And all this together is very encouraging in the whole APAC region, if it comes to own retail. And that's why you should expect a very strong growth in this part of the B2C business.

As you know, the online part of this business is, in some areas, very restricted and you have to go a lot over marketplaces, which is not that attractive. So that's why we decided to go more into own retail.

And the online business is a little bit part of it, but not really the one we are focusing on. We're focusing on own retail. We're focusing on strong, very selected wholesale partnerships, and that's how we move forward.

David, do you want to take the first question on and digital?

Yes, Anna, it's interesting because the dynamics in digital are -- it's kind of unique. Your website needs to be all things to all people that are searching for Birkenstock, right? And we say who's our targeted consumer every man, woman and child on the face of the earth. So your website needs to be very broad tell a very broad story about the brand and satisfy everyone.

What's the interesting dynamic is when I talked about the emerging youth as our fastest velocity, the more a retail chain caters to that consumer, the smaller their dot-com businesses. So the leading youth retailer in the United States let's say, they do only 10% of their business online, and their CEO will tell you it will probably never go over '20, whereas the department store might be 30% to 40%.

So we have to do certain things for certain demographics in different ways. We know that this emerging youth consumer is consuming content in different ways than the traditional consumer is. It's less how do we beat them over the head or are we a cowboy and how do we go and steer them and grab them and last to them, it's more how do we make sure and their fluid decision-making, how do we make sure we're telling our story, giving them content, but in a commercial way that could drive it and give them that opportunity from our own website.

And then when we do, what are those advantages from a level of exclusivity from a level of assortment and eventually possibly things like personalization.

I think we have time for one more. So let's do the last question, and then we will get something to eat.

Peter McGoldrick from Stifel. I've got a question on the distribution model or the supply model actually. So historically, we've thought about the engineered distribution model and now with capacity constraints, there is an opportunity to perceive this as an engineered supply model, too.

So if we think of tying that to the product development, thinking as to the Arizona slide, where we have the different price levels. Can we think about how that ties to the rest of the portfolio?

What's the right mix of core versus elevated executions and higher price points and how might that flow through the P&L?

I think a very good question. Thank you very much. I think it's like think about the chart I presented with the penetration. I think the higher penetrated markets, it is a very balanced approach in the less developed market, I just had an example of China.

This high-priced model have a big halo effect and it's somehow placing or benchmarking the brand in the awareness of the people. It could be absolutely diverse. If you go in different social demographics or in different age groups. Some -- that's just an example from [indiscernible] in Japan. We are in Japan in 60 years.

So old people know the brand, but they know the brown leather Arizona, the brown Boston and all this, a very basic elements of the brand, but the youth is catching up and they prefer more embellishments shilling executions and more expensive ones.

So we have both sitting in the same boat, okay, both muscles. The old school ones and the new ones and newness, higher price points. But then you all of a sudden see look at the Boston in the U.S., the youth consumer that sits with David.

That's a style that's in the market for 60 years. We never -- we say exactly the same execution, same leather, same quality, same thing. Okay. [indiscernible] can buy and say, that's the one. They grab it, everybody have to have it, and that's it.

So the magic is in between. The message for you guys should be we can play wherever from a price point, from a social demographic from an attractive access to the brand from a storytelling standpoint, nobody should ever question the power of this brand in terms of communication.

There are a lot of brands out there creating social media noise around nothing, okay? This is a 20-year-old brand. I think we can tell a ton of story about every single pair we're producing because everything is real. Nothing is pretended and designed in. It's all with us.

We own the supply chain. We own the whole story and not since 2 summers since 250 years. So really, that's a big, big, big foundation from a product standpoint, from a storytelling standpoint, from a distribution standpoint. Big thing.

Okay. So we are going to wrap it up there. I know we're out early, which is great. So I just want to remind everybody we have lunch. Help yourself, please make sure that you've been able to see all of the displays, and we have the rest of the team here for Q&A if you have specific questions on certain regions.

And then also just make sure that you go back and get your foot measured and grab a footbed before you go. Okay. Thank you all for joining us. Appreciate it. I'm sorry, it was so cold in here. But it's warmer than it is outside.

Good morning, and thank you for standing by. Welcome to the Birkenstock Fourth Quarter and Fiscal 2025 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded. I now turn the call over to Megan Kulick, Director of Investor Relations.

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 September 30, 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.

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. 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.

Good morning, everybody, and thank you for joining us today. As we enter year 3 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 potential. 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 close to our share of business by 10 percentage points to 38%.

We generated significant cash flow, allowing us to delever from 3.3x to 1.5x while investing over EUR 150 million into our production capacity and buying back $200 million in shares. We achieved all this in an environmental faced by fundamental changes in global tariffs and international trade, a war in the Ukraine, and energy crisis and a significant decline in the U.S. dollar. Even for a brand like ours with a history spanning 2.5 centuries, these are unusual times. As our results show, we have navigated them consistently and successfully. 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. 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 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 '25, up over 12%. ASP was up 5% in constant currency, supported by targeted price actions and the 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. 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 of CapEx.

We plan to open about 40 new stores in 2026, putting us well on track to reach our 150 store target ahead of schedule. 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. 10 of our top 20 silhouettes in '25 were closed toe. The Boston, a category-defining hero silhouette, which turns 50 years in '26, 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 white 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. Our growth is only limited by our production capacity and disciplined distribution. We, as many other brands did, saw a continued shift towards 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. 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 '26.

I will now turn it over to Ivica to discuss our financial results and outlook for '26 in more detail.

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 U.S. dollar compared to the fourth quarter of '24, 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. 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 U.S. 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 EUR 156 million in the fourth quarter, representing 29.7% of revenue. This was down 130 basis points from the prior year. For the full year, selling and distribution expenses totaled EUR 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 administration expenses were EUR 35 million or 6.7% of revenue in the quarter, down 30 basis points versus prior year. Full year adjusted G&A totaled EUR 123 million or 5.9% of revenue, up 30 basis points from fiscal 2024, mainly due to reclassification. Adjusted EBITDA in the fourth quarter of EUR 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 EUR 667 million, up 20% year-over-year. 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 EUR 94 million in the fourth quarter was up 71% year-over-year. Adjusted EPS for the fourth quarter was EUR 0.51, up 76% from EUR 0.29 a year ago. For the fiscal year, adjusted net profit of EUR 346 million was up 44% and EPS of EUR 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 EUR 384 million for the fiscal year, down 12% from fiscal 2024, mainly due to the timing of tax payments. We ended the year with cash and cash equivalents of EUR 329 million after the repurchase of 3.9 million shares totaling EUR 176 million and the partial early repayment of the U.S. dollar term loan of USD 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 EUR 85 million in CapEx, adding to our production capacity in Arouca, Goerlitz and Pasewalk and continuing our investments in retail and IT. Even with the share buyback we executed in May, our net leverage was 1.5x at the end of fiscal 2025, down from 1.8x at the end of fiscal 2024.

Without the buyback, the net leverage would have been at 1.2x. 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-U.S. 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 2 quarters and about 100 basis points for the full year. 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 exchange rates 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 U.S. 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 in COGS than we did in 2025. 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 EUR 2.3 billion to EUR 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. 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 U.S. tariffs. We expect adjusted EBITDA of at least EUR 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 EUR 1.90 to EUR 2.05, including approximately EUR 0.15 to EUR 0.20 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. Capital expenditures should be in the range of EUR 110 million to EUR 130 million. Net leverage target for the end of fiscal 2026 of 1.3 to 1.4x, 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 3 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 3 years. 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 steal our business in an overall very challenging context. We remain very optimistic about our future. '26 is off to a great start with Birkenstock at the top of gifting list this holiday season. Demand for the footbed remains robust and unconstrained. The main constraints we face is 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. 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.

[Operator Instructions] Your first question comes from the line of Matthew Boss with JPMorgan.

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 '26. What's driving the more conservative view for '26? 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, 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 U.S. in specific, some of our big wholesale partners grew over 30%. So our full price realization is still north of 90%. So since nearly 2 years, we see a change in consumer journey in the Western Hemisphere. A lot of brands, including us seeing more traffic and demand coming from multi-brand environment and in-person shopping at wholesale, especially Gen Z customer -- consumers. Wholesale partners play successfully the full range of Piano 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 touch point with our products. They will return to us for their second, third, fourth and so on pair. These young customers 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 category in Gen Z, the Clog, Boston, Naples, we own the Clog category. But from a production perspective, a Clog takes more than twice as many production minutes per pair than sandals. So the Clog 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 '26. 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 3 to 5 years to be in the mid-teens range. We assured we are investing heavily in our preproduction capacity in Portugal, ramping up stitching and preforming capacities, especially for our Clog styles and more complex and more expensive products. Our new purchased facility in [indiscernible], near Dresden will further increase our cork/latex footbed capacity and our final assembly lines where we currently face the biggest bottlenecks is the factory will be operational in '27. 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.

Your next question comes from the line of Laurent Vasilescu with BNP.

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.

Thanks for the question, Laurent. It's Ivica. So you're right. Fiscal 2026 will be heavily impacted by FX and tariffs, so representing 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 EUR 70 million.

And so 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 EUR 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 EUR 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 gain 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. 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 up $25 to bring our gross profit to $75, not $60. The price increase would have to be 2.5x 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 U.S. dollar and to U.S. tariffs regime.

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 premarket on this 13% to 15% top line. Any finer point on just like on 1Q, could we assume that top line could be up high teens on that front?

It's Oliver again. Yes, 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 U.S., the business is going super well. So I understand your worry somehow. But listen, it's really brand is performing super strong. So yes, all good.

Your next question comes from the line of Randy Konik with Jefferies.

Randy, can you hear us?

Yes. Can you hear me? Yes. Sorry about that. This 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 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, and they are doing a very good job representing our brand, reaching new consumers through their own advertising and outreach.

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 and supports the very strong margins we are achieving. We are 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. All we can do is make sure that touch points 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 are doing.

And we are thrilled to see the strong demand regardless of where it is. It means more Birkenstock on feed and the opportunity to turn the new consumer into a lifetime brand fan who we firmly believe will come -- will become a D2C 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 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. A 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.

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 touch points with the brand and to present the full range of our products and, of course, introduce newness. With 97 doors globally, we are not able to capture all in-person demand that we are seeing with our own D2B business. We added 30 stores in 2025, and we should add another 40 in 2026. So 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.

And when you -- and 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? And lastly, do you expect the -- again, the growth rate spread to widen or stay about the same or narrow from a B2B stronger than D2C growth rate in 2026?

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

Your next question comes from the line of Lorraine Hutchinson with Bank of America.

The growth in EMEA accelerated nicely. What are you seeing in terms of consumer demand in the EU in particular? And any comments on first quarter trends there?

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 Q4 are a significant acceleration versus previous quarter. We saw double-digit growth across B2B and DTC 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 2x our overall business and closed shoes, so lace-up shoes, grew almost 2x 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're on to 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 shoe silhouette, the Utti, 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 outperformed 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. 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 maintain the quality in our distribution.

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 growth in fiscal '27?

Lorraine, it's Ivica speaking. So 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. So overall, our goal is to increase our capacity by -- in terms of units by roughly 10% for the foreseeable future, and this will certainly help us to serve the demand going forward.

Your next question comes from the line of Michael Binetti with Evercore ISI.

Can you hear me okay?

Clear.

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?

Yes, sure. Michael, it's Ivica speaking. So we closed fiscal '25 with a gross margin of 59.1% and the external factors, that is tariffs and the drag in currency is representing a drag in total of 200 basis points. So that means 57.1% and we guided 57% to 57.5%. So what are the puts and takes here? A absorption and capacity absorption within our production will contribute roughly 60 basis points. You mentioned correctly, Michael, 75. 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 D2C growth, there will be a drag in the gross margin from the channel shift. And this is basically around 50 basis points. So 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.

Okay. And then I'm just curious a quick follow -- a quick couple of follow-ups. So you said -- 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? Like what could you produce given where the facilities are at right now? And then Ivica, just to clarify, how much the Australia roll-up adds to revenues this year?

Michael, I'm taking the first part. This is Oliver. 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 clog, as an example, will digest double the time in minutes and production minutes than an average sandal. So in total, somehow the multiple is if you sell one pair in online. It equals more or less 2.5 -- 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 2/3 units and 1/3 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 pass at the moment, we are 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 it's -- 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 in units are declining because we cannot deliver simply more of the same thing. Makes sense to you or...

Yes, completely. And just -- yes, the Australia part, please.

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.

Your next question comes from the line of Dana Telsey with Telsey Advisory Group.

As you think about the DTC channel, was there any difference in performance between e-com 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 or clogs or open toe for '26?

Dana, this is Nico. 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. And thus, we are actually holding our promise. So we promised to come closer to 100. We're now at close -- 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. Amongst 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.

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 100 square meters, 150 square meters, 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 achieved 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 3 areas: markets. So there are some underdeveloped markets, if you will, underpenetrated markets with regards to our digital, specifically in Asia and Middle East, where we launched later than in the more mature markets. With regards to consumers, we heard that young consumers, young demographics are underpenetrated by us. And so does -- 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, in our digital channel.

Dana, it's 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?

Very strong holiday season, Dana. It's 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 are very, very confident and very, very successful holiday season in the U.S.

Your next question comes from the line of Simeon Siegel with Guggenheim Partners.

[Technical Difficulty]

Simeon, we can barely hear you. You have digital dropouts. You dialed in on the land line or...

Your next question comes from the line of Adrien Duverger with Goldman Sachs.

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 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?

Adrien, this is Nico 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. And we don't just own the sandals category. We now own the sandals and the clogs category. So you'll continue to see closed toe outperforming open toe while open toe is still growing. And that is also something that we've actively -- that we will actively drive forward.

So we'll bring back open-toe silhouettes. We'll rejuvenate open-toe silhouettes such as the Madrid, such as fine-strap sandals, the Florida, the Miami. So we'll give them more investment in product and give them more oxygen and daylight to let them flourish further. So 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 are now coming to 40% and even above. And 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 Utti, 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.

And maybe just on what I have you. What's the opportunity that you see from further price mix? So I think you mentioned you expect about 10% volume growth over the next few years. So should we assume that there is between like the 3% to 5% remaining is from price list and price mix? Is that how we should think about it?

Adrien, 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, but 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 Nico mentioned. And clearly, this will be driving ASP besides, of course, that we will continue to take targeted like-for-like pricing.

Your next question comes from the line of Mark Altschwager with Baird.

Can you hear me?

Yes, loud and clear.

Wonderful. 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 as the base gets larger, especially as it relates to both labor and component 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 for your question. As I said in the previous answer to the first question from Matt Boss, we are heavily increasing our preproduction 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. And just keep in mind that in the near future, we will probably have a half finished goods warehouse where we simply collect all the uppers and then finally push them into final assembly when needed. And then we -- the reaction time of this company to be in the market with the right article at the right door is very, very significant faster than today. The acquisition of [indiscernible] near Dresden, the factory we bought like 80,000 square meters for EUR 18 million.

This will be ready in '27, more or less. 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 baking. 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 square meters 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 are very happy with the EVA development, especially in the what we call 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 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.

Your next question comes from the line of Sam Poser with Williams Trading.

Can you all hear me?

Yes, we can hear you, Sam.

So I guess we have 14 days or 13 days left in Q1. Can you give us like an update on what Q1 looks like in more specifics? I mean the quarter is over pretty much. So I just wonder, 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, is number one, in more specifics?

Sam, can I quickly jump in and give you the first answer? It's Oliver.

Yes.

Okay. So you should expect -- I mean, 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 preannouncing margin for Q1 yet.

Okay. Do you anticipate doing that prior to ICR or at ICR?

No, we're not going to do that. We will give more detail, Sam, though, at our Capital Markets Day end of January.

And then secondly, I just want to focus on the factories. There's been lots of conversations about that. Within Pasewalk, Goerlitz and Portugal, how the existing framework of your production, you had currently -- you had recently said that, I believe, going into Q3 '26, you expect 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 '26?

Sam, this is Oliver speaking. There will be no big impact other than optimization within our existing structure. But within '26, 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 [indiscernible] is on the net 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 grass land at the moment. So we have to build the building first. So that's on a midterm perspective. And Portugal is ongoing. And Portugal will double or triple their capacity from preproduction manufacturing standpoint, which is a huge amount, okay? But this 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, shilling and all this, it's not that quick.

Your next question comes from the line of Paul Lejuez with Citi.

You can hear me now, hopefully.

Paul, we can hear you loud and clear.

Sorry about that. Curious about your regional plans for F '26. I think you talked about pairs being up 10%. Curious how that looks by region, how you're thinking about the 3 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 APMA. Curious if you're facing that again now.

Thank you for your question, Paul. You're completely right. I mean this is the basement of our distribution strategy. It's engineered distribution. So with the light of margin perspective on the different regions, Americas, Europe and APAC. And I said it before, the 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. There are always low ASPs, and they're always mass driven.

So it's the opposite we're 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. And 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. 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. And it's very encouraging what we see in this region. Impacts of tariffs and FX is not that bad in this region. So yes, 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 year guidance for the year?

APAC is twice the speed of -- compared to the rest of the world. But that's steered. It could be quicker, but that's what we're doing. 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. We don't have enough product, we cannot deliver anything.

We have time for one last question, and that comes from the line of Janine Stichter with BTIG.

Yes, I want to ask a bit more about the B2B expansion. I think in the past, you pointed to the long-term opportunity to add about 5,000 doors on a base of around 12,000. What would the time line 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.

This is Nico. 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 underpenetrated 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%.

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. So that is something that will bring us a small amount of doors, again, very carefully selected that we will increase in fiscal '26 in those 2 areas. But rest assured, we will 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.

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

Good morning. Thank you for standing by. Welcome to Birkenstock's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded. I will now turn over the call to Megan Kulick, Director of Investor Relations.

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; David Kahan, President, Americas; Nico Bouyakhf, President of EMEA; Klaus Baumann, Chief Sales Officer; and Alexander Hoff, Vice President, Global Finance, will join us for the Q&A.

Today, we are reporting the financial results for our fiscal third quarter of 2025 ended June 30, 2025. You may find the press release and supplemental presentation connected to today's discussion on our Investor Relations website at birkenstock-holding.com.

We would like to remind you that some of the information provided during this call is forward-looking and accordingly is subject to the safe harbor provisions of federal security 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 and 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. 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.

Now I'll turn the call over to Oliver.

Good morning, everybody, and thank you for joining us today for our third quarter results. Once again, we delivered against our guidance with a 16% revenue growth in constant currency. We continue to grow double digit in every segment and channel. At the same time, we significantly improved profitability. Gross margin was up 100 basis points to 60.5%, and EBITDA margin was up 140 basis points to 34.4%, our best third quarter margin ever. And we did this in a global environment with pressure from tariffs and currency volatility.

We continue to see the shift to in-person shopping, which amplifies our brand. We are a touch and field product, especially for consumers who are new to the brand. We have over 12,000 high-quality touch points through our B2B partners compared to our own fleet of 90 doors. That is why this shift in consumer behavior favors our B2B channel over DTC.

We are winning at retail, gaining shelf space and taking share. In a flat U.S. market, retail revenue at our top 10 wholesale partners was up 25%. As you do your channel checks for back-to-school, you will hear that Birkenstock is the winner with very strong sellout and fast inventory turns. Same for EMEA. Retail revenue at our top 10 partners was up 20%. Within our B2B channel, over 90% of the growth came from within existing doors. We are committed to maintaining relative scarcity and managing tightly our distribution growth.

In own retail, we accelerated the pace of openings, adding 13 new doors. Our new stores generally deliver a higher ASP and higher units per transaction from day one and we see a return of CapEx within 12 to 18 months. We are on track to reach our goal of around 100 stores by the end of this fiscal year. This will allow us to capture more in personal shopping demand within our own DTC business and allows us to showcase the full breadth of our product assortment.

Our brand heat is stronger than ever. No matter if you look at sell-through full price realization or our strong order book. This is especially true in the emerging youth market. Our demand is strong across all product categories and target groups. Sales of our classic level silhouettes grew double digits. Demand for our iconic styles, such as the Arizona and Boston remains strong and is accelerating within the younger demographic. At the same time, we are growing in expansion categories such as laced-up shoes. Closed-toe share of revenue increased by 400 basis points year-over-year.

Now let's briefly review our segment performance. In the Americas, revenue was up 16% in constant currency, with both the B2B and DTC channels growing double digit. Our B2B business was especially strong. Importantly, we saw no pushback or cancellations following the July 1 price increases implemented in response to tariffs. We opened 3 additional stores bringing the total number of stores to 13.

In EMEA, we delivered double-digit growth of 13%, while both channels grew double digit. B2B Outpaced D2C, driven by strong sell-through at our retail partners. Our online business started off slower than planned in April and May. However, in June, online reaccelerated. We saw healthy growth in our own retail with same-store sales up in the mid-teens. We further expanded our brand presence with the opening of new stores in the Netherlands, in Spain, bringing our store count to 39.

The APAC region was up 24% in constant currency. Timing of goods in transit shifted revenue from third quarter into the fourth quarter. We forecast an acceleration in the fourth quarter, in line with our expectation that APAC will grow twice as fast as our other 2 segments for the full year. We opened 8 new owned retail stores, bringing the total number of stores in the region to 38. We also expanded our strategic partnerships increasing our mono-brand partner doors by around 20% compared to last year. Our business in China was particularly strong and accounted for 20% of APAC revenue in the quarter.

I will now turn it over to Ivica to discuss our financial results in more detail.

Thanks, Oliver. I am happy to share with you Birkenstock's performance for the third quarter of 2025. This is the first quarter since we have been a public company where we saw significant headwind from FX on our reported numbers. The dollar depreciated by about 5% against the euro in the quarter compared to last year. This impacted both our reported revenue growth and margins. FX caused a 330 basis points drag on revenue growth, lowered gross margin by 60 basis points and adjusted EBITDA margin by 70 basis points.

Third quarter revenues were EUR 635 million, growth of 16% in constant currency within the range of our 15% to 17% annual guidance for the year. Reported revenue growth was 12%. B2B growth outpaced D2C in the quarter. B2B was up 18% in constant currency. D2C grew 12% in constant currency. D2C share of business was 38%, down 110 basis points versus prior year. We see sustained strength in our B2B channel from the shift to more in-person shopping.

B2B has proven to be the most cost-efficient way to target new consumer groups and user [indiscernible], both important white spaces for our brand. We now expect B2B growth to outpace D2C in both the fourth quarter and for the full year. We are a demand-driven brand. We strategically allocate our product to where a consumer is shopping. And unlike our peers, we own our supply chain. The B2B order book provides predictability and derisks our planning.

Gross profit margin for the quarter was 60.5%, up 100 basis points year-over-year. Pricing, net of inflation and better absorption of costs related to the Pasewalk facility contributed to margin expansion. This was partially offset by channel mix and the unfavorable currency impact of 60 basis points.

Selling and distribution expenditures were EUR 163 million in the third quarter, representing 25.6% of revenue. This was down 80 basis points from the prior year, mainly due to a higher B2B share. Adjusted general and administration expenses were EUR 31 million or 4.9% of revenue in the quarter, up 40 basis points year-over-year due to higher IT expenses primarily related to the ERP conversion in the Americas.

Adjusted EBITDA in the third quarter of EUR 218 million was up 17% year-over-year. Adjusted EBITDA margin of 34.4% was up 140 basis points year-over-year. This was even despite the 70 basis point impact from unfavorable currency translation. Adjusted net profit of EUR 116 million in the third quarter was up 26% year-over-year. Adjusted EPS was EUR 0.62, up from EUR 0.49 from a year ago, a 27% increase.

Cash flows from operating activities during the quarter were EUR 261 million, down EUR 21 million compared to the last year due to the timing of tax payments and lower working capital release. We ended the quarter with cash and cash equivalents of EUR 262 million after the repurchase of 3.9 million shares totaling EUR 176 million.

As we continuously improve our inventory efficiency, our inventory to sales ratio declined to 33% from 36% in Q3 '24. Our DSO for the quarter were 43, in line with the 42 a year ago, even with a strong growth in our B2B business. During the quarter, we spent approximately EUR 22 million in CapEx, adding to our production capacity in Pasewalk, Gorlitz and Arouca and continuing our investments in retail and IT. We are on track to meet our CapEx target of around EUR 80 million for the year.

Even with the share buyback we executed in May, our net leverage was 1.7x as of June 30, '25, down from 1.8 at the end of Q2. Without the buyback, the net leverage would have been at 1.4x. Our capital allocation priorities continue to be; number one, invest in our business; number two, reduce debt; and number three, opportunistic share buybacks. Even with the buyback, we continue to expect net leverage of approximately 1.5x at the end of fiscal '25.

We believe we are well positioned to meet our stated growth and profitability objectives. We believe we can manage the impact of the baseline 15% EU tariff through the actions we have already taken, including targeted price increases. Pricing is not the only lever we have. Given our vertical integration, additional levers include efficiencies in production, vendor negotiations, the optimization of the product mix and the allocation of products between the regions.

Lastly, regarding FX. In the fourth quarter, we expect the currency headwinds from the weaker U.S. dollar to impact reported revenue growth and margins. At today's euro-dollar exchange rate, reported revenue growth should be about 400 basis points below constant revenue growth in the fourth quarter and margins will be negatively impacted by about 100 basis points, which is reflected in our guidance for the year. Based on results to date, and the current trends we are seeing in the business, we expect to be at the high end of our constant currency revenue growth guidance of 15% to 17%. We still expect adjusted EBITDA margin in a range of 31.3% to 31.8% despite the drag from a significantly weaker U.S. dollar.

And now I'll hand it back to Oliver.

Thanks, Ivica. We are well positioned to drive steady long-term growth and shareholder returns. We are a brand with industry-leading growth, pricing power, excellent profitability, global reach, a very healthy balance sheet and strong cash generation.

During our second quarter call, we raised our EBITDA margin target based on an exchange rate of $1.12. Even with the current exchange rate of $1.17, I'm confident we will meet our targets for the full year.

I would now kindly ask the operator to open our Q&A session.

[Operator Instructions] And the first question today is coming from Matthew Boss from JPMorgan.

And congrats on another nice quarter. So Oliver, could you speak to current demand trends and visibility today to the acceleration that you've embedded back to high teens constant currency in the fourth quarter? And on the bottom line, excluding foreign exchange, maybe if you could just provide some perspective on the more than 61% gross margin and 35% EBITDA this quarter or just sustainability of this pace of improvement?

Thank you for the question, Matt. You're correct. Without the FX headwind, the EBITDA margin would have been 35.1% even. So this is the best margin in the Q3 we ever had. All things being equal, our goal is to constantly drive margin improvement as we scale and grow the business. The demand we saw in Q3 was exceptional. But we simply don't always have the capacity to meet the demand. This was especially true for the third quarter for Europe and APAC.

And growing at this pace requires also constant improvements in efficiency, and this is where I'm spending a lot of my time right now to find ways to increase production capacity and create long-term efficiency. So within our own supply chain, we want to meet our strongly growing demand by doing both of these things: improvement in efficiency and building the capacity.

And as you know, we strive to drive our margin improvement over long term, of course, and also need to invest in the business to sustain this growth. We are adding automation in manufacturing, investing in IT and infrastructure and to streamline our processes throughout the organization. But what we saw in demand in the market, especially in the third quarter and in the back-to-school -- but David will have a conversation about this later on was -- or is tremendously strong. So from our perspective, we don't see any slowdown in consumer demand or anything. We are -- at the moment, we're struggling with capacity. That's our biggest issue.

The next question will be from Dana Telsey from Telsey Group.

And nice to see the progress. Since implementing the price increases on July 1, can you expand on what the market response has been? What are you seeing in demand given the back-to-school season we're in, maybe the Nordstrom anniversary sale in the Americas? I would love an update.

Dana, this is David. Thanks for the question. As many in the industry know, we anticipated the potential tariffs as best we could, and we were very proactive. We shared with our retail partners our specific plan as far back as May. And on July 1, the price adjustments became effective. I will say the adjustments we made were surgical by nature versus broad strokes. And while they're a bit off of our historic pricing cycle, it's no different than how we have managed this in past years irregardless of tariffs.

So now here we are, we're 6 weeks past the price actions. And as I'm sure, everyone's recent channel checks indicate our velocity and sell-through from July and into week 2 of August, the period that includes a significant chunk of the important U.S. back-to-school season has been exceptional and it's escalated even beyond the selling results we had in Q3, which historically was when we would have high spring peak sell-throughs. So we're very encouraged and we've seen no impact whatsoever since we took our pricing increases.

The next question will be from Anna Andreeva from Piper Sandler.

And congrats, nice to see ongoing momentum. We wanted to ask regarding the tariffs. With the EU tariff now at 15% compared to 10% before August 7, do you see any incremental impact on revenue and on margin? And then as a follow-up on DTC versus B2B historical seasonality of the business is such that DTC is a little slower in 3Q, but then accelerates in the fourth quarter. Should we expect a similar dynamic of this 4Q?

Thank you, Anna. It's Ivica. So we went into 2025 with an effective tariff rate of around 11%. So we have been exposed to U.S. tariffs before as you all know. This went up in April to 21% even. And this is the additional 10% you mentioned before. So following the EU U.S. trade deal, we now face a 15% baseline tariff on EU imports, which we believe is very manageable. Our effective tariff will land somewhere just above 15%, depending largely on the product mix.

So as you also know, we have some items that are already tariffed at over 15% and those higher tariffs, historical tariffs will remain in place. So what's really important is, first, we have pricing flexibility. As David said, on July 1, we implemented pricing actions in the U.S. to offset some of the expected impact with no negative market response. Second, price is not the only lever we have. With a vertically integrated supply chain we have additional ways to offset through vendor negotiations, manufacturing efficiency and optimization of our product mix.

So all in, for 2025, we will fully offset the absolute dollar impact of the tariffs, but see a very small negative on gross margin and EBITDA margin which, however, is already factored into our full year guidance.

So taking the second question as well and on D2C and B2B, so we expect an acceleration in DTC in Q4 of fiscal '25. However, as mentioned before, B2B growth will outpace B2B in both, so Q4 and for the full year. And what's driving -- so the channel mix and what we've seen in Q3 was mostly driven by the continued trend towards in-person shopping, so which naturally favors B2B channel over D2C.

And our brand is a brand that benefits from physical shopping. So where consumers can touch, feel, experience the footbed. So it's a haptic product. And especially for those who are new to the brand and new to the footbed. So our D2C business is still very much a digital platform. And with 90 doors globally, we are not able to capture all the in-person demand within our D2C business.

So the good news here is that both channels are very profitable, so we are very happy to go wherever the demand is actually. Although [indiscernible] important, we are not compromising quality distribution and full price realization. So we manage inventory in the B2B channel very tightly through our engineered distribution price realization is at over 90% stock-to-sales ratios in the channel are very healthy, and our order book is very strong.

We are also accelerating the pace of our own store openings. So that is why we can capture more of this in-person shopping demand in our own DTC channel. There is no change in our strategy, which includes leaning in both channels. And naturally, a higher mix of B2B means lower gross margin and a higher EBITDA margin. The opposite is true in D2C mix, but both are very profitable.

The probably one important fact, as you know, we own our own supply chain. So the B2B order book provides for great predictability and certainly derisks our planning.

The next question is coming from Laurent Vasilescu from BNP Paribas.

Can I ask about EMEA growth, it was a bit lower than the mid-teens expectation. Are there any reasons why there were onetime factors for 3Q? And should we expect a low-teens growth rate for this region as an algorithm going forward? And then I have a quick follow-up on gross margin.

Laurent, this is Nico. Thank you for your question. I'm happy to give some context on the EMEA numbers. So yes, in our third quarter, we grew 13% in EMEA with actually double-digit growth in both B2B and DTC and we further built on a strong third quarter of last year. In a market that was flat to negative, I actually do believe these are pretty strong result as we continue to be among the best-performing brands, and we continue to take share of many other players.

I have to admit this quarter was a more challenging one for our region, and Oliver alluded to that already, not -- and I have to underline this because we are facing a structural demand issue. In fact, we continue to see very strong demand for our product. The challenge for us this time was that we were simply unable to capture the full relevant demand due to limited production capacity. In other words, we simply didn't have the product at hand to capture the full relevant demand.

Allow me to give you some context on the numbers further in regards of trading. So third quarter, we saw strong sell-through results at our wholesale partners of plus 20% versus last year and reorders, which is a direct demand signal increased significantly along the quarter versus last year. As Oliver said, our same-store sales in retail went up significantly double digit, another great demand signal. Our price increases with the Spring/Summer '25 collection were fully absorbed by the market, and we maintained our full price realization of over 90%.

As in Americas, the summer started a bit later than in our core markets than we expected. So April and May were a bit softer. But what we saw in June was a full reversal of that trend, and we could see record sales across all channels and partners. What we've seen so far for Q4, that was also part of your question, is that's going to be a stronger quarter in EMEA and should return to mid-high teens growth.

In regards of the consumer, yes, they have been impacted by a lot of uncertainty in the European zone. But I can definitely confirm that there's no deviation for us from a brand health perspective. I can definitely confirm Birkenstock continues to be one of the chosen brands.

Very helpful, Nico. And then [indiscernible] Megan, with regards to the 4Q gross margin, I know there was a lot of noise last year relative on a year-over-year basis. I think GMs were down like 600 basis points. But should we assume if 4Q gross margins are up like 200 basis points? And then last call, during the Q&A, I think there was commentary that gross margin should be up for next fiscal year. Is that still the case, the way to think about it, despite FX and incremental tariffs?

Laurent, so gross margin was up this quarter by 100 basis points, and there's basically 2 main drivers behind that. The first and most important is pricing net over inflation, which contributed 120 basis points. And the second point is that we continuously see a better absorption with regards to our newest manufacturing facility in Pasewalk, which contributed 80 basis points this quarter. And if you compare it to the Q2 this year, this is a trend that we are continuing to see and which are the biggest drivers behind gross margin expansion. On the flip side, the drag of FX was 60 basis points. But overall, we continue for this year to come closer to our 60% gross margin target.

The next question will be from Randy Konik from Jefferies.

Just on the B2B versus B2C, just so we have a thought process for -- into next fiscal year, would you want us to kind of think about B2B leading from a growth rate perspective over D2C or any kind of thought process change to that, just so we know? And then you talked about some good significant improvement in penetration in closed-toe obviously, the Boston, et cetera. Can you give us some perspective, just round that out a little bit more beyond the Boston other kind of wins you're getting in closed-toe would be super helpful.

Thanks, Randy. It's Ivica again. Coming back to your question with regards to B2B and what is driving that? And how could you think about it in the terms of next year. So we haven't given guidance yet for 2026 naturally. However, what we see is a constant drive towards in-person shopping, and this is basically why and where we are serving the demand where the actual customer wants to be served. And this is certainly driving our thought process, and this is the reason why we are also seeing that increase in B2B and the demand of our retail partners.

With regards to your second question on closed-toe, we see an expanded closed-toe share in Q3 by 400 basis points. And looking at the product categories, we see that non-Boston [indiscernible] is growing the same rate as the Boston. So across the board and also with the newness that we have introduced, we feel very comfortable on the growth rates we are seeing in the closed-toe silhouette.

The next question will be from Jay Sole from UBS.

Oliver, if I want to ask about the durability of the ASP gains that you've seen. Because with FX and tariffs and price increases because of the tariffs, there's a lot of noise around ASP, but it's been a good trend for a long time. How much further into the future, can you see good ASP gains for Birkenstock and why?

Thank you very much. It's Ivica again. And if you disaggregate growth for this quarter, we see high single-digit volume growth and mid-single-digit ASP growth. And if you look -- this is not only like-for-like price. However, like-for-like price has contributed to that growth. But it's also a product mix and we see an increased share of closed-toe, as mentioned, 400 basis points in Q3, but we also see a continued trend and demand of customers to high-quality execution, so the preference to leather. And this is also reflected in the ASP growth.

The next question will be from Adrien Duverger from Goldman Sachs.

So could you please comment on the factory expansion plans and how they are progressing versus your expectations? And how would you expect the additional supply to evolve over the next few years? [indiscernible] given the context you've given today where supply seems to be the main constraint in the business.

It's Ivica. Again, on factory expansion and especially Pasewalk, so we have said that we are expecting full absorption by end of Q3 '26. We are well on plan, maybe even ahead of that plan when it comes to full capacity utilization. So this works according to what we have initially said. And coming back to capacity overall and looking at our longer-term growth algorithm, we said we will be growing by mid- to high teens and that means naturally doubling the business every 5 years. So we are making sure that our capacity in terms of production, manufacturing, but also beyond that, just considering the logistics network, is able to keep up with the growth.

And this means additional investments, especially in [indiscernible] but also final assembly, and this is what we are currently looking at to keep up with the demand that we are seeing generally in the market.

And this is also perfectly in line that we've always said investing in our business in terms of capital allocation remains our top priority. So we are well on track to invest around EUR 80 million for CapEx over the course of this year. And this is something that you can expect into the future, including additional investments in building up our capacity.

Okay. And if I can just maybe follow up on the wholesale channel. Could you please comment on the confidence across the wholesale partners and how you would compare this to like 6 months ago, for example?

This is David. I think we've spoken for a few calls about general shopping being slower, but intentional purchasing for the chosen brands with a few most successful brands being even stronger. So the wholesale partners are certainly the ones that are driving that and they're mirroring consumer behavior. So there's, certainly, the appetite for more of our product, not just in quantity, but in breadth of styles, but we always maintain a high level of relative scarcity. And the more we do that, the more we put into the market and the more the demand is from our wholesale partners. So it continues to escalate around the world quarter after quarter.

The next question will be from Sam Poser from Williams Trading.

I've got, I guess, 2.5, so I'll ask them. You mentioned the -- can you give us a breakout of what the -- in the U.S., what the store comps of the comp stores were versus as compared to the total? And I guess probably about 6 or 7 of your stores or comp -- that's number one.

Number two, can you give us specifically -- I know you said it, but can you give us specifically what the reported revenue you're looking at for the full year is based on today -- based on the -- what that reflects on an FX-neutral basis?

And three, the tariffs on your product, you were at 11. It went to 15. So there's only that 4% variance. You're not -- it's not a stack number. That's correct. So actually, it came down from 21 or so to 15 since you last guided, if I understand it correctly.

Sam, it's David here. Yes, our comps in our own retail stores were up high teens very successful quarter for us. And again, what's happened in our retail stores even more than in the wholesale partners is higher transaction value per transaction, higher ASP, the velocity has been very significant. And all of the new products that we've introduced because, obviously, we've had some winners out in the wholesale world. We're just able to showcase so many more of the breadth of product. So we're seeing a spread be much more significant, but very successful quarter in our own retail stores mirroring exactly what happened at wholesale.

So Sam, on your question with regards to FX -- it's Ivica speaking again. The FX headwind that we've been seeing in the third quarter was significant. So it was a 5% depreciation in the U.S. dollar on average in the quarter. The average USD-euro exchange rate was 1.13 compared to 1.8 -- 1.08 in the third quarter. So this resulted in a drag of 330 basis points. If you look ahead into Q4, we expect a revenue drag of around 400 basis points compared to where the U.S. dollar is currently trading at, which is 117 compared to previous year.

So if you look at the entire fiscal '25, you will certainly remember that in the first and second quarter, we had some currency tailwinds. This turned in the third and is now turning into the fourth quarter into headwinds. And overall, we expect a drag of around 150 to 200 basis points for the full fiscal year.

And then covering your question on tariffs. The blended rate was 11% but this is indeed a blended rate, so preliberation dates, as you certainly are aware there are some products which have a lower rate than that and some that had a higher rate than that. And for those that have been tariffed at a lower rate, the rate will go up to 15%. And for those products and materials that had already a historically higher rate say, 25%, this higher rate will remain in place. As such, we expect to be slightly higher than 15% but depending on the overall product mix.

But a few months ago, your blended rate with the additional tariffs were stacked so it would have stacked on top of that blended 11%, an additional 10%. Now it's just 15%, which would help you, which is less than what you thought it was going to be 3 months ago. Is that fair?

Yes. It's fair to say that -- so compared to the additional 10% reciprocal tariff, which would have led to 21% blended with the 15% or blended 15%, we would be slightly better. This is true.

The next question will be from Ed Aubin from Morgan Stanley.

Yes, Ivica, so first one is a clarification because I couldn't really hear what you said on the DTC in Q4. Did you imply that DTC would reaccelerate from the plus 12% you printed in Q3 to a mid-teen rate or not just to make sure I understood it correctly. Number one.

And the second one is also a clarification is that, am I right to assume that most of the goods that you're selling in fiscal '25 in the U.S. have already been shipped prior to kind of liberation day, and therefore, you have very limited is no tariff impact and that it will come in '26? If you could clarify that, that would be helpful.

On the first part of the question with regards to DTC. So we expect indeed acceleration in B2C in the fourth quarter of this fiscal year. However, as mentioned before, B2B will outpace in both. So Q4 and the full fiscal '25. However, D2C will accelerate in Q4.

With regards to tariffs and inventory, so generally, and more broadly speaking, we have had a very good inventory position. But it's not that limited to U.S. only. So looking at our inventory, it's very productive. It's pre-allocated to customer orders and certainly, a very good inventory position does help to mitigate adverse effects.

So -- but just to follow up on my question. So again, that would imply that you had little impact in fiscal '25, right? Is that fair to say?

That's true. And certainly, the inventory position helped in that regard.

The next question will be from Janine Stichter from BTIG.

I was hoping you could expand a bit on the B2B business. You talked about of the growth coming from existing doors. How do you feel about where the ceiling is [indiscernible] growth or growth in shelf space in those existing doors? And then maybe talk a little bit more about what you're seeing from the 10% new doors that you're opening, whether it's sporting goods, the outdoor channel, rent specialty. Curious what you're seeing in those newer channels?

Yes. We've said -- this is David. We've said that 90% of our growth, 90-plus comes from existing doors, which means it's more penetration in styles and SKUs and also some depth of inventory. We're very deliberate in expanding doors and especially expanding any new points of distribution. They might be in the professional space. They might be in more run recovery space or outdoor. But again, it's very deliberate.

Significantly, the growth is coming from some additional door counts and some key partners, but it's really coming from breadth of styles, additional inventory and the fact that we're just performing at a level that's significantly above the peer group. I mean you're looking at a flat business where we're up. So certainly, we're taking share, but we're doing it very deliberately. And as Nico said, when he talked about retail in EMEA, we never ever compromise the relative scarcity.

The next question will be from Mark Altschwager from Baird.

I guess just first thinking about the DTC business where perhaps you have some more granular customer data. Curious what you're seeing in terms of sort of new customer growth versus spend per customer or frequency per customer, obviously, closed-toe penetration growth continues to be a theme here. Just wondering to what extent that sandals buyers that are also buying closed-toe styles versus the closed-toe bringing a new customer into the brand, which is maybe how those trends may be evolving? And then I had one quick guidance follow-up as well.

This is Nico. I'm going to give you some context on the DTC trading and also acquisition of new customers, but also how we how pleased we are with the success of expansionary categories and new categories. So what we typically see, and we've been sharing that over the course of the last quarter is that in our DTC, we have a higher share and a higher growth of so-called expansionary categories. So new categories that we expose to our consumers in DTC, be it through our online shop or in our physical retail, they are fast adopted by consumers than our B2B partner -- and then in our B2B partners.

What we also do is, for sure, we have the power to celebrate the full line in our DTC, whereas B2B partners typically more safer placing the buy. But we use the great success in our DTC business to bring it over to B2B and share with our B2B partners. What are the styles, what are the categories that are spare heading in our DTC business.

What we also see is, whenever we open a retail store, a new store, consumers are coming in and trending towards higher-priced products. So our new stores are delivering a higher ASP, more premium product and also more units per transaction. While our same stores, as David mentioned, are growing double digit in their sales. So that gives us very much confidence on expanding in DTC through our retail expansion plan that is targeted to address the physical shopping trend, while we also spare head growth in underpenetrated areas for digital.

Specifically in regions like APAC, but also Middle East, our digital business is quite young, but expanding really fast. And that gives us great confidence that we are with quality, expanding our business on the DTC front, while we keep scarcity and the quality in our B2B business.

Excellent. And then just on the margin guidance, reiterating the full year, but that does imply a fairly wide range of outcomes for the fiscal fourth quarter, including EBITDA margin being down year-over-year. Just wondering if you could comment on that. I mean is there a scenario where you see EBITDA margin could be down? Or just what are the factors that you see driving kind of the low end versus the high end of that guidance range?

Mark, it's Ivica speaking. I mean, certainly, the key point driving that is the volatility that we have seen in currency. So it's extremely hard to predict and a few see where things have developed over the course of the year, we feel very comfortable with that guidance, although we can't naturally predict where the U.S. dollar versus the euro will trade. So as such, we are very comfortable again on that guidance, but there is this part of the equation, which is unknown.

The next question will be from Paul Lejuez from Citi.

You gave some color on the DTC business within EMEA. I think, slower start and then it accelerated. Can you give some color about what you saw in the other regions within the DTC business throughout the quarter, whether or not you saw an acceleration, deceleration? And then separate -- I'm sorry if I missed this, but can you talk about what your sell-throughs look like within B2B and how that compares to what you're seeing in DTC in each region?

This is Nico. So we've shared the sell-throughs at our B2B partners are significantly up. So all the way up to 25% in Americas and 20% in EMEA. So that gives us a pretty immediate demand signal as also reorders have been substantially increasing. I think we could -- in the 2 big regions, I'm sitting next to David here, we could see that the summer started a bit softer. So April, May came in our DTC business a bit softer than expected. And that was a market-wide, I'd say, phenomenon. And then as I shared, June was a complete reversal of that trend. So it was really record sales at the same level, I would say, in our DTC business, in stores, same stores went up significantly. New stores day one performed really well, while our B2B partners also pushed sell-through at record rates.

So we are quite happy to see this in the current market environment where the market is mostly flat to negative. So we continue, as I said, to be the brand of choice for our consumers that are making choices tougher choices and that are impacted by a lot of uncertainty currently. So our brand heat is definitely unbroken.

And were those comments related to EMEA? Or did you see that acceleration in all markets in June?

That is all markets. So that's not just EMEA.

The next question will be from Peter McGoldrick from Stifel.

I'm curious on the closed-toe penetration, up 400 bps in the June quarter, which is the seasonally smaller quarter for these products. Can you help us think about the closed-toe rate of growth in the September quarter and how this builds as we look into fiscal '26?

So yes, this is Nico again. Closed-toe continued to outpace open-toe, while open-toe shows a very robust growth. We're also very pleased to see that non-Boston styles grow at the same pace as Boston. So it's not just one horse race. Just now, you might have seen we are completely sold out on Naples Wrapped. We saw an organic TikTok celebration that made Naples Wrapped this style among youth audiences. We are currently replenishing and coming back early September with [indiscernible].

But I also like to mention that Tokyo and Lutry are really performing well. So it's, again, not just a Boston race. It's really a very diversified business and consumers are enjoying that business. Where that share of business can grow we shared, I believe, something around 30%, but it can grow stronger. So we are not at the ceiling yet with closed-toe. And typically, in the autumn season, closed-toe is growing faster than open-toe even further. But I'd also like to mention that open-toe is showing a very robust growth. So it's not at the expense of open-toe.

And the next question will be from Luca Solca from Bernstein.

Yes. Maybe a different question, trying to [indiscernible] out what you've been doing and what you're planning to do in order to maintain or increase brand momentum and how you are planning to support brand equity in terms of marketing initiatives, collaborations, communication, social media events, activations, anything that you've planned on the marketing side would be very useful.

Luca, this is Oliver. Thank you for your question. As you know, we are a purpose-driven brand. So we constantly introduce the functionality and the purpose of the brand to new audiences. That's what we especially see in our in-person shopping, we just talked about the B2B DTC thing. It is very strong and it's -- the demand for this kind of info treatment is very, very strong in the APAC region. It's also strong in the upcoming markets in EMEA, and it's constantly strong in the U.S. and in Latin America as well. So we, as a brand, we indicate about our functionality, which is not -- or maybe it's even the core of any marketing activity, but just not printing viable pictures and make them very big and spend a hell of money for it.

So it is the core foundation groundwork, what we're doing every day to convince people to try the footbed and come back and buy the second, the third and the tenth pair. So nothing really special, but very broad-based. Because as you can see and as you can imagine, if you have such a huge collection and you're globally relevant and you have this growth in every channel, in every product category, in every city and in every territory you're in, it is a very, very big, big animal.

So what we're doing is something that's really important for the people, we think. And don't forget, 1774 our vehicle from Paris, where we are together with other artists and creators, create a luxury-driven line to promote the silhouettes and the different executions to very hard to find new audiences. And -- but that's just like probably the most obvious marketing activity. You may count from your perspective as a marketing activity.

The brutal truth is we are on this groundwork every single day, all of us meeting people talking about the footbed try it, and that's the mission, give everybody access to the footbed.

Thank you. This does conclude today's Q&A session, and it also concludes today's conference. You may now disconnect your lines. Thank you for your participation.