Birkenstock is buying back $250m (£186m) of its shares after its chief executive said there was a disconnect between the footwear brand’s price in the public markets and its value.
The retailer will make a payment to Goldman Sachs to recover 6 million ordinary shares at the price of $33.21 (£24.79), representing 80% of its total ordinary shares.
Chief executive Oliver Reichert said: “Short-term market dynamics have resulted in what we believe is a strong disconnect between our share price and the strength of our underlying fundamentals.
“We believe deploying our substantial cash position toward repurchasing our own shares represents the most attractive use of capital in the current environment.
“Given the volatile environment of the capital markets, we will continue evaluating market conditions to take advantage of further opportunities for share repurchases in the future.”
Birkenstock posted a 22% drop in its net profit to €82m (£70.8m) in the second quarter to March 31, which it blames primarily on unfavourable currency translation and incremental US tariffs.
This was despite an increase of sales to €618m (£534m), up 14% in constant currency, driven by double-digit growth across all regions.
“The $250m accelerated share repurchase is a strong statement that we believe in the near-term and long-term value of Birkenstock,” Reichert said.
“Our business continues to deliver outstanding performance and we see a huge runway for growth ahead for our beloved brand.
“We remain confident in our ability to achieve revenue growth of 13% to 15% annually in constant current, while maintaining strong margins and strong free cash flow generation.”
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