S&P Global Ratings has changed its view of Birkenstock Holding PLC, moving the outlook to negative from stable while maintaining the company's BB+ long-term issuer credit rating. The agency also assigned a BB+ issue rating to a planned €900 million senior unsecured note due 2033 to be issued by subsidiary Birkenstock Group B.V. & Co. KG, and gave that instrument a recovery rating of 3.
Proceeds from the new note are earmarked to refinance an existing €432 million senior unsecured note maturing in 2029 and to finance strategic initiatives that include share repurchases and other corporate purposes. The issuance follows a $250 million accelerated share repurchase agreement Birkenstock announced in May 2026, which the company expects to complete by June 30, 2026.
S&P projects Birkenstock's adjusted debt-to-EBITDA ratio will rise to about 3.0x in 2026 from 2.1x in 2025, before easing to roughly 2.5x in 2027. The ratings agency's outlook reflects the higher leverage profile driven by refinancing activity and the company’s use of cash for buybacks alongside other strategic spending.
On the operating side, Birkenstock reported second-quarter fiscal 2026 revenue of €618 million for the period ended March 31, an increase of 14% on a constant currency basis. Regional performance showed the Americas up 14% and Asia Pacific rising 30%.
The company reaffirmed its full-year guidance calling for 13%–15% revenue growth in constant currency and an adjusted EBITDA margin of 30.0%–30.5%, down from 31.8% in the prior year. S&P, factoring in foreign exchange headwinds, expects reported revenue growth of about 9%–10% for 2026.
S&P anticipates Birkenstock's adjusted EBITDA margin to be approximately 28.5%–29.0% in 2026, compared with 30.8% in 2025. The agency attributes the margin decline to tariff effects, shifts in channel mix and foreign exchange pressures.
Free operating cash flow is forecast by S&P at about €210 million–€240 million for 2026, improving to around €290 million–€320 million in 2027. This cash flow outlook assumes capital expenditures of about €120 million and potential recurring share buybacks of $200 million per year.
Overall, the ratings action underscores S&P's view that near-term credit metrics will weaken due to the planned financing and buyback activity, even as operating performance continues to deliver revenue growth and positive cash generation.