Lost in Translation As FX Bites Growth and Margins

研报英文原文证据摘录

Lost in Translation As FX Bites Growth and Margins

EA markets

were flat to down during the quarter, placing BIRK’s DD% growth in sharper relief. EMEA revenue

increased 11% cc despite an estimated ~300bps headwind from Middle East disruption and weaker

European sentiment. Absent those impacts, growth would have tracked within the 13–15% range,

reinforcing share gains and full-price sell-through as the primary drivers. Incremental EMEA revenue

risk of ~€10–12M was quantified and is expected to be offset elsewhere in the portfolio.

Physical Retail Strengthening DTC Quality. BIRK added five new stores in the quarter, bringing

the global fleet to 111. New locations continue to outperform on ASPs, units per transaction, and

returns, while comps accelerated to DD% growth from HSD% in F’1Q. Mgmt reiterated that physical

retail remains the highest-quality DTC lever, with typical store cash paybacks of 12–18 months.

Valuation Discount Reflects Sentiment, Not Fundamentals. Near-term sentiment remains

pressured as FX and gross margin headwinds continue to obscure underlying operating strength.

That disconnect remains evident in the valuation, with BIRK trading at ~8x F'27 EBITDA, a material

discount to its history and to global premium footwear peers, despite consistent mid-teens% cc

growth and resilient EBITDA generation. While headline noise persists, the current multiple appears

more reflective of macro and FX uncertainty than underlying brand momentum. We lower our PT Randal J. Konik * | Equity Analyst

to $50 given current headwinds and macro volatility, but still see relative valuation as attractive at (212) 708-2719 | rkonik@jefferies.com

these levels. Carlos Gallagher * | Equity Associate

+1 (786) 535-2025 | cgallagher1@jefferies.com