S&P Upgrades Birkenstock to 'BB+' on Strong Performance

Key Upgrade Details

S&P Global Ratings has upgraded Birkenstock's credit rating to 'BB+' from 'BB', assigning a stable outlook. The decision reflects the footwear company’s robust operating performance and disciplined capital allocation strategy, underscoring confidence in its financial health.

Strong Financial Projections

The rating agency anticipates Birkenstock's revenue will grow to approximately €2.5 billion by fiscal 2027, with adjusted debt expected to fall below 2x leverage. S&P projects an adjusted EBITDA margin of 28%-29% in 2026, supported by strong brand equity and consistent growth in its business-to-business segment.

Strategic Growth and Market Impact

Growth is fueled by increased product offerings and penetration into new distribution points, particularly with a younger customer base. The company's strategic priorities include expanding manufacturing capacity and strengthening its direct-to-consumer channel, with a target of 150 retail stores by 2027.

Concluding Outlook

Projected free operating cash flow of up to €300 million by 2027 will provide significant financial flexibility for investment, debt management, and share buybacks. This reinforces the positive outlook on the company's ability to maintain its growth trajectory and financial stability.

FAQ

Q: Why was Birkenstock's rating upgraded?
A: The upgrade was driven by its strong operational performance, positive revenue growth projections, and a disciplined approach to capital management.

Q: What is Birkenstock's new rating from S&P?
A: Birkenstock's new credit rating is 'BB+' with a stable outlook.

Source: Investing.com