German footwear icon Birkenstock has confirmed that tariffs imposed by the Trump administration are now beginning to significantly impact its operations, with price adjustments for some products anticipated this year. The company stated that as most of its pre-tariff inventory has been shipped, American consumers will inevitably face higher costs for certain sandals, shoes, and boots.
Financial Pressure and Brand Values
Chief Financial Officer Ivica Krolo outlined the stark financial reality: for every $100 worth of products entering the United States, Birkenstock incurs $10 in tariffs. To maintain steady profit margins without passing costs directly to shoppers, the company would need to find an additional $25 per $100 of product elsewhere. A straightforward solution would be to raise consumer prices substantially, potentially increasing a $100 pair of shoes to $125.
However, in a firm commitment to its brand ethos, Birkenstock has declared it will not implement such sweeping price hikes. "The price increase would have to be 2.5x the tariffs," Krolo explained. "This is not something we would do to our customer, being a democratic brand." This principle-driven stance underscores the company's dedication to customer relationships over short-term financial gains.
Strategic Absorption of Costs
Instead of burdening consumers, Birkenstock plans to absorb the tariff impact through a multi-faceted approach. Price adjustments will be made selectively, based on seasonal reviews and individual style assessments, rather than across-the-board increases. This nuanced strategy aims to minimise customer disruption while managing economic pressures.
Supply Chain Optimisation
On the operational front, the company is focusing on supply chain efficiencies to offset tariff costs. This includes enhancing manufacturing productivity, identifying savings in shipping logistics, and renegotiating contracts with suppliers and vendors. Krolo acknowledged that these changes will require time to implement fully, indicating a longer-term adjustment period.
Growth Amidst Challenges
Despite the tariff headwinds, Birkenstock's expansion trajectory remains robust. The company opened 30 new stores in 2025 and has ambitious plans to launch an additional 40 outlets in 2026. Furthermore, it intends to strengthen consumer engagement through enhanced loyalty programmes, exclusive product lines, and special events.
"We are working to drive an even stronger connection to our consumers through more targeted membership benefits, a loyalty program, exclusive styles, content and special events," Krolo emphasised.
Market Diversification and Relief
The Asia-Pacific market is expected to help mitigate the impact of U.S. tariffs, providing a crucial buffer. Birkenstock had previously attempted to manage costs through a global price increase in summer 2025 and by expediting shipments from Europe before tariffs took effect. A potential escalation was averted when President Donald Trump recently withdrew additional tariffs scheduled for February 1, announced at the World Economic Forum in Davos.
Ultimately, while tariffs are influencing Birkenstock's 2026 pricing and supply-chain strategies, the company's commitment to strategic absorption and brand integrity highlights a resilient approach to navigating international trade complexities.
