Birkenstock puts best foot forward as Crocs trails in ‘ugly shoe’ race

Birkenstock beat profit expectations, while Crocs warned that it expects third-quarter revenue to fall by between 9% and 11% compared with a year ago.

Birkenstock is recovering from a hit when its October 2023 public offering debuted at $41, well below the company’s $46 target. At the time it ranked as the sixth worst IPO over $1bn in the preceding decade and its share price has fluctuated ever since. But the struggles of other consumer brands post-IPO, such as trainer producer Allbirds, should provide some solace.

So should its ability to withstand US tariffs – its strategy to pass costs on to the consumer is working. Birkenstock has 95% of its production based in Germany, which it says will allow it to lean into further efficiencies should there be more shocks (not to be confused with socks) down the line.

Meanwhile, Crocs has warned of falling US demand, possibly a result of the fading “ugly” shoe trend and the tapering of its Covid-era work-from-home peak. Susan Healy, finance director at Crocs, has said the company would take a $40m hit for the remainder of 2025 due to tariffs.

Crocs said that while its shoes are worn in a wide variety of situations, from celebrities on the red carpet to a quick trip to the newsagents, it expects to see US demand drop in the coming years, as consumers favour athletic wear in the buildup to the Olympics in Los Angeles in 2028 and the Fifa World Cup in the US next year.

Both brands are now looking east for growth. Birkenstock recently launched direct sales in South Korea as part of a wider expansion in the Asia-Pacific, where it reported its fastest revenue growth in recent earnings. Crocs has increased its marketing profile in India, where it has targeted Bollywood actors to expand its reach.

And as this summer rolls to its end, we’ll await the next big warm-weather footwear hit. Meanwhile, Copenhagen Fashion Week thinks it has already found it – the humble Havaianas flip-flop.

Photograph by Christian Vierig/Getty Images