Episode Details

Birkenstock Holding plc (BIRK) Q3 FY2026 — Q3 FY2026 (quarter ended June 30, 2026): revenue EUR 719.5M, up 13% reported and 15% in constant currency. Adjusted EPS EUR 0.74, up 19%; IFRS EPS EUR 0.60, down 13%. FY2026 revenue and EBITDA guidance RAISED; adjusted EPS guidance left UNCHANGED at EUR 1.90-2.05. Stock +11.6% to $41.00 on the reaction session; the L Catterton secondary then priced at $39.35. Birkenstock beat and raised fiscal 2026 revenue and EBITDA guidance before the open on August 13. The shares gapped 17.2%. Eleven hours later L Catterton filed to sell $1.0 billion of stock - 25.5 million shares, 14.1% of the company - and it priced overnight at $39.35. Birkenstock is buying up to $500M of that block with money it borrowed in June at 4.500%. THE CALL: AVOID (3/5, GUIDANCE RAISED AT 6AM, $1B BLOCK LAUNCHED AT 4:52PM) — base-case value ~$34.54 vs ~$41.0 today. KEY METRICS: - CALL: AVOID, 3/5. Fair value ~$34.54 (EUR 29.95 at 1.1529) against the $41.00 close on August 13, about 16% below, and 12% below the $39.35 the secondary priced at. Wall Street is 13 buy, 3 hold, 0 sell, average target $48.72, median $51, range $41-55; the last month's two targets average $47.00. We differ on method: the Street prices constant-currency growth, we price the cash the owner keeps. Bull $56.46, base $34.93, bear $19.26. - THE QUARTER: revenue EUR 719.5M, up 13% reported and 15% constant currency, at the high end of the company's 13-15% target. Gross profit EUR 424.9M, margin 59.1% from 60.5% - tariffs 70bp, currency 60bp, Australian distributor 20bp, partly offset by capacity absorption. Adjusted EBITDA EUR 242.5M, up 11.1%, margin 33.7% from 34.4%. Profit from operations EUR 203.1M, up only 2.6% on revenue up 13%. Capex EUR 26.2M; 13 new stores to 124. - THE EPS BASIS, PROVEN NOT ASSUMED: the filed figures are IFRS EPS EUR 0.60 (down 13% from EUR 0.69) and adjusted EPS EUR 0.74 (up 19% from EUR 0.62), on 181,476,635 weighted diluted shares. The EUR 22.3M gap is non-cash finance charges - EUR 10.6M fair-value loss on the buyback contract, EUR 11.7M on derecognising the old notes - plus a EUR 13M FX swing. Dollar EPS figures near $0.86 circulating in data feeds are conversions, in no filing. - THE GUIDANCE TELL: FY2026 revenue growth raised to 15% constant currency, landing at the high end of EUR 2,300-2,350M. Adjusted EBITDA raised to at least EUR 710M, margin 30.2-30.5% from 30.0-30.5%. But adjusted EPS guidance was left UNCHANGED at EUR 1.90-2.05 - after an accelerated repurchase retired 6 million shares, roughly 3.2% of the count. The tax rate guide went from 26-28% to 30-31%, and net leverage from 1.3-1.4x to 1.6-1.7x. - THE CASH: fiscal 2025 owner earnings were about EUR 235M (operating cash flow EUR 373M less capex EUR 87M less lease payments EUR 52M). Fiscal 2026 lands near EUR 238M on the same definition - roughly flat, while revenue grew about 30% across the two years. Nine-month inventories rose EUR 139M and receivables EUR 123M; income tax paid ran EUR 34M ahead of the charge. Net debt EUR 1,227M from EUR 997M; net leverage 1.8x from 1.5x. What to watch: UP: full-year operating cash flow in the December accounts landing well above the EUR 373M of fiscal 2025, which would show the working-capital build easing and put owner earnings near EUR 300M - our base case. DOWN: another year of revenue compounding while owner earnings sit flat near EUR 240M, plus further sponsor selling into strength. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.