German footwear maker Birkenstock raised its annual forecasts on Thursday, as second-quarter sales grew more than expected and the company sees strong demand for its pricier range of sandals and clogs.

Shares of the company were up about 5% in premarket trading.

Newer iterations of Birkenstock products such as Arizona Essentials and Madrid Big Buckle have been helping in attracting more shoppers, in turn lifting sales momentum even amid lingering tariff uncertainty.

Stronger demand for its comfort-driven designs, especially from younger customers, at retail stores such as Nordstrom and Foot Locker, have also been strengthening Birkenstock’s partnership and new store opening plans.

“We expect the tariff situation may create a unique shift in consumer behavior in the footwear category with a split between the few brands, like Birkenstock,” said Birkenstock’s CEO Oliver Reichert.

Birkenstock said it invested about 21 million euros ($23.53 million) in capital expenditure in the second quarter as it looks to expand its production capacity to cater to growing demand in regions such as the Americas.

Net revenue in the Americas, its biggest market, was up 23% in the quarter ended March 31, compared with 19% a year earlier.

The company now expects its fiscal 2025 revenue to be at the high end of its previous forecast range of 15% to 17% in constant currency basis.

It also said its annual earnings before interest, taxes, depreciation and amortization (EBITDA) margin would be between 31.3% and 31.8%, up from the 30.8% to 31.3% previously forecast.
The company posted quarterly revenue of 574.3 million euros, compared with analysts’ estimates of 567.7 million euros as per data compiled by LSEG.

On an adjusted basis, the company posted quarterly profit of 0.55 euros per share, compared with analysts’ estimates of 0.54 euros as per data compiled by LSEG.

News Credits- FASHION NETWORK