A better than expected growth in Q2, FY25 sales and a strong demand for its pricier range of sandals and clogs led to German footwear brand Birkenstock raising annual forecasts for the year.

Newer editions of Birkenstock products such as Arizona Essentials and Madrid Big Buckle have been boosting demand for the brand’s products, lifting sales amid lingering tariff uncertainty. Birkenststock has also been witnessing a stronger demand for its comfort-driven designs, especially from younger customers, at retail stores such as Nordstrom and Footlocker, strengthening Birkenstock's new store opening plans.

The current tariff situation is expected to create a unique shift in consumer behavior in the footwear category with a split between the few brands, like Birkenstock, says Oliver Riechert, CEO, Birkenstock.

The company invested about €21 million ($23.53 million) in capital expenditure in Q2, FY25 as it looks to expanding its production capacity to cater to growing demand in regions such as the Americas.

The company’s biggest market, the Americas witnessed a 23 per cent boost in net revenue during the quarter ended March 31, compared with 19 per cent a year earlier.

The company now expects FY25 revenue to be at the high end of its previous forecast range of 15 per cent to 17 per cent in constant currency basis.

The company’s annual earnings before interest, taxes, depreciation and amortization (EBITDA) margin are likely to remain between 31.3 per cent and 31.8 per cent during the quarter. It posted quarterly revenue of €574.3 million, compared with analysts' estimates of €567.7 million euros as per data compiled by LSEG.