Birkenstock Holding plc Ordinary Shares

Good morning, and thank you for standing by. Welcome to Birkenstock's second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After today's prepared remarks, we will host a question and answer session. Please limit yourself to one question. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. The company has allocated 45 minutes to this conference call and will take as many questions as time allows. I would like to remind everyone that this conference call is being recorded. I would now like to turn the call over to Megan Kulik, 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. Niko Boyov, President of EMEA, and Alexander Koff, VP of Global Finance, will join us for Q&A. Today, we are reporting the financial results for our fiscal second quarter ended March 31st, 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 6K 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 obligations 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 face 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 26th, 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 US Supreme Court ruling striking down IEPA tariffs has actually increased our tariff exposure, at least temporarily. We estimate our refund claims will be about 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 APDR 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 wide space growth opportunities. Closed-door penetration was up 300 basis points, driven by strong growth in blocks. APEC grew at over two times the pace of the other regions, and share of business was up over 100 basis points year over year. We opened five 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 DTC 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 America's 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 DTC business, we saw strong same-store growth and we added two new stores in the Americas, bringing the total to 17. Growth in the MIA 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 6 million euros 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 APEC, where demand remains very strong. This is the beauty of our engineered distribution model and put our resilience. APEC 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. APEC showed the highest closed-top 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'll pass the call over to Iwica to go through the quarter results in more detail.