By Teresa Rivas

Every time Birkenstock Holding seems to hit rock bottom, another pebble turns up in investors' shoes -- or in this case, sandals.

Shares of the German footwear brand have gone basically nowhere since their 2023 initial public offering. The stock lost about a quarter of its value in 2025 and is down 4% so far in 2026, at a recent $39.38.

Nothing seems to be going right. The company preannounced first-quarter revenue growth in line with expectations, but it did little to move the needle. The U.S. dollar's decline versus the euro has been a headwind, raising the price of Birkenstock's shoes in dollars. Worries about more European tariffs, though currently shelved by President Donald Trump, have further soured sentiment.

In short, it seems like there's little that would keep the stock from plodding lower. Yet Birkenstock's investor day next week could provide at least a temporary reprieve, and may mark the start of a comeback.

The company will probably unveil new multiyear targets that could offer a fresh start for more-achievable revenue and profit expectations after a dismal few years. With the shares trading near all-time lows, any positive surprise could lead to a near-term bounce.

J.P. Morgan analyst Matthew Boss expects Birkenstock to outline a path to $1 billion in incremental revenue over the next three years when the company outlines its goals at the Jan. 28 event. That would be a solid reset, "providing management ample room to 'beat and raise' annually going forward," he wrote in a note.

Even with a lack of enthusiasm around the stock, consensus estimates call for Birkenstock to deliver more than 10% earnings-per-share growth this fiscal year and 20% in the next. Those figures could edge higher with new targets. Yet the shares trade for only 13 times 2027 expected EPS, just below their long-term average.

"The company's growth algorithm remains compelling, with broad-based demand and enviable luxury margins," writes Jefferies analyst Randal Konik, who pegs the stock's fair value at $60. "Despite foreign-exchange volatility," he adds, "Birkenstock's fundamentals are solid, and shares appear attractively valued for the brand's moat and growth profile."

Gross margins have averaged well over 50% in recent years, with analysts predicting that number to jump to nearly 60% in 2028. The company sells an admirable 90% of its products at full price and has strong brand recognition -- factors that support its continuing expansion into new footwear categories and geographic regions. The U.S. still accounts for just over half of Birkenstock's sales, but that figure has been declining as other regions grow.

Of course, after years of disappointment, Birkenstock might be more of a show-me story. Understandably, investors will want to see consistent improving results more than just targets. That might be increasingly tricky, given the shifting tariff landscape as well as ongoing pressure on consumers.

Nonetheless, there are reasons to hope that Birkenstock really has reached an inflection. Strong new goals would signal management's confidence that it can turn its losing streak around and more consistently deliver the kind of numbers that the Street wants to see. The downside also seems limited, given the stock's valuation and how far it has tumbled. Analysts can be overly upbeat, but their average price target implies more than 50% gains from current levels.

We won't opine on whether wearing Birkenstock sandals with socks is truly good fashion. Then again, if even that combination can make a comeback, there's reason to think the stock can, too.

Write to Teresa Rivas at teresa.rivas@barrons.com

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(END) Dow Jones Newswires

January 23, 2026 21:30 ET (02:30 GMT)

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