News Summary

  • Birkenstock executives said during an August 13 earnings call that global manufacturing capacity expansion is progressing as planned to support its target of 10% annual production growth by 2027 (a target based on a three-year plan).
  • Related plans include: expansion of a factory in Germany to be completed in fiscal 2026, and renovation of another to be completed in fiscal 2027; in addition, an expansion project at a factory in Portugal is also planned to begin production in fiscal 2027. This information comes from a Capital Markets Day presentation released in January.
  • Chief Financial Officer Ivica Krolo said on the call: "We are on track to achieve 10% production growth, as we promised at Capital Markets Day, and the expansion of the entire manufacturing network is also progressing." He added that projects in Wittichenau and Görlitz, Germany, and Arouca, Portugal, are all on schedule.

In-Depth Analysis

Birkenstock announced plans in March 2024 to double production capacity within three years while keeping nearly all production in-house, involving seven factories in Germany and a components factory in Portugal.

Jakub Nachtigall, Vice President of Operational Excellence, said in January: "We are resilient to supply chain risks and shocks." He was referring to the manufacturing network, adding, "We are also resilient to changes in customer demand."

Nachtigall also said in January that the plans include consolidating warehouse locations, reducing the number of warehouses but increasing their size, to support direct delivery to stores in Europe, the Americas, and eventually the Asia-Pacific region. The company is also seeking to establish an Asia-Pacific regional hub to support replenishment for new stores.

Recently, manufacturers across multiple industries have been strengthening their manufacturing and distribution networks. Heavy equipment maker Deere & Co. said in January it plans to open a distribution center in Indiana and a manufacturing campus in North Carolina within a year; furniture maker La-Z-Boy is nearing completion of the Midwest and Eastern hubs in its multi-year distribution system overhaul.