Birkenstock issues a 900 million bond to refinance its debt

Birkenstock is returning to the bond market after more than five years. The German footwear manufacturer is aiming to raise €900 million through the issue of bonds maturing in seven years, with an option for early redemption after three years, with the aim of refinancing existing debt and maintaining financial flexibility for any further share buybacks.

This is the group’s first bond issue since 2021, when it raised €430 million through a bond issue maturing in 2029. That same year, Birkenstock was acquired by the private equity fund L Catterton, backed by LVMH, which subsequently guided the company to listing on Wall Street in 2023. Birkenstock had then set the IPO price at $46 per share, a level at which the popular sandals have a market valuation of 8.6 billion.

On Wall Street, the share price is trading higher following news of the bond issue. Since the start of the year, the shares have risen by 16 per cent, whilst over the last twelve months they have fallen by 8 per cent.

The share issue comes at a delicate time for the group. Last month, the company left its full-year profit guidance unchanged, falling short of market expectations. The results were weighed down in particular by US tariffs and exchange rate volatility, which eroded profitability. In the quarter ending in March, however, Birkenstock recorded a 14% increase in sales at constant exchange rates, reaching €618 million, whilst operating profit fell more than analysts had expected.

To bolster the share price, a week after the publication of its financial results, the group announced an accelerated plan for share buybacks worth $250 million, explaining that it wished to bridge what it considers to be a disconnect between the share price and the company’s fundamentals. Since then, the shares have regained ground, bringing the year-to-date rise to around 19 per cent.