버켄스탁(BIRK) 2026 회계연도 3분기 실적 발표 콘퍼런스 콜: 매출 가이던스 상향

핵심 요약

• 2026 회계연도 3분기 매출은 보고 기준 전년 동기 대비 13% 증가, 고정환율 기준 15% 증가한 7억 2000만 유로를 기록했다. 환율 변동으로 인해 매출 성장률이 180bp 감소했다.
• 조정 EBITDA는 전년 동기 대비 11% 증가한 2억 4200만 유로를 기록했다. 조정 EBITDA 마진율은 33.7%로 70bp 하락했으나, 환율 및 미국 관세 효과를 제외하면 60bp 상승했다.
• 소비자 직접 판매(DTC) 성장률은 고정환율 기준 16%로 가속화되었다. 자사 소유 리테일 매출은 13개 신규 매장 오픈과 한 자릿수 높은 수준의 동일 매장 매출 성장에 힘입어 50% 증가했다.
• 모든 지역에서 고정환율 기준 두 자릿수 성장을 달성했다. 미주 지역은 14%, EMEA는 15%, APAC은 23% 증가했다. 중국은 50% 이상 성장했으며, 호주를 제외한 APAC 지역은 30%에 가까운 성장을 기록했다.
• 버켄스탁은 2026 회계연도 매출 성장률 가이던스를 고정환율 기준 15%로 상향 조정했으며, 현재 조정 EBITDA가 최소 7억 1000만 유로에 달할 것으로 예상한다.
• 회사는 2억 3000만 유로 규모의 자사주를 매입했으며, 시장 상황에 따라 5억 유로의 추가 자사주 매입 또는 추가 부채 리파이낸싱을 실시할 수 있는 유연성을 확보하고 있다고 밝혔다.

주요 재무 데이터

사업 및 경영 실적

전 지역에서 고른 성장세 유지

미주 지역은 고정환율 기준 14% 성장했다. 유스 리테일러와 스포츠용품점이 B2B 실적을 견인했으며, 주요 파트너사의 판매율(sell-through)은 20% 이상 증가했다. 버켄스탁은 미국에서 4개 매장을 추가로 열어 미국 내 총 매장 수를 21개로 늘렸다.

EMEA 매출은 온라인 및 매장 수요 증가에 힘입어 15% 증가하며 2회계분기 대비 성장세가 가속화되었다. 해당 지역의 정가 판매율은 93%를 기록했다. 회사는 EMEA 지역에 4개 매장을 오픈해 지역 내 총 매장 수를 50개로 늘렸다.

APAC은 고정환율 기준 23% 성장했으며, 호주의 시점적 영향을 제외하면 30%에 가까운 성장을 기록했다. 중국은 50% 이상 확장되었으며 회사 내 가장 높은 평균판매단가(ASP)를 기록했다. 버켄스탁은 APAC에 5개 매장을 개점하여 지역 내 총 매장 수를 53개로 늘렸다.

DTC 및 리테일 성장 가속화

DTC 매출은 고정환율 기준 16% 증가하여 2회계분기의 12% 성장에서 가속화되었으며 B2B 성장률을 앞질렀다. 경영진은 디지털 부문의 실적 개선 원인으로 콘텐츠 강화, 맞춤화 확대, 결제 절차 간소화 및 로열티 혜택 확대를 꼽았다.

자사 소유 리테일 매출은 고정환율 기준 50% 증가했다. 버켄스탁은 이번 분기 동안 13개 매장을 추가해 글로벌 직영 매장 수를 총 124개로 늘렸다. 회사는 2026 회계연도 말까지 약 140개 매장을 확보한다는 목표를 순조롭게 추진 중이다.

막힌 신발(Closed-toe) 제품군, 착용 기회 확대

막힌 신발(Closed-toe) 침투율은 500bp 이상 확대되었다. 보스턴(Boston)을 제외한 막힌 신발 제품은 50% 이상 성장했으며, 나폴리(Naples) 판매 수량은 4배 이상, 우티(Utti) 판매 수량은 2배 이상 증가했다.

막힌 신발 제품은 더 많은 노동력과 생산 시간이 소요되기 때문에 제품 믹스 변화로 인해 조정 총마진율이 약 40bp 감소했다. 그러나 경영진은 이러한 제품이 더 높은 평균판매단가와 켤레당 높은 매출총이익을 창출한다고 밝혔다.

샌들 매출은 마야리(Mayari), 마드리드(Madrid), 시에나(Siena)의 신규 버전에 힘입어 고정환율 기준 한 자릿수 중후반대의 성장세를 유지했다. 평균판매단가(ASP) 성장의 절반 이상은 제품 믹스에서 비롯되었으며, 전체 성장은 ASP에서 약 3분의 1, 판매량에서 약 3분의 2를 기여한다는 회사의 목표 수준과 일치했다.

경영진 가이던스

마진 전망에는 환율 및 미국 관세로 인한 약 200bp의 결합 하방 압력이 포함되어 있다. 조정 EPS 가이던스에는 추정치 €0.15~€0.20의 부정적인 환율 영향이 반영되어 있으며, 6월에 완료된 조기 자사주 매입 외의 추가 자사주 매입은 제외되었다.

4회계분기의 경우, 경영진은 고정환율 기준 매출 성장률이 연간 가이던스 범위인 13%~15% 내에 있을 것으로 예상한다. 해당 분기 환율 및 관세 영향은 전년 동기 대비 비교적 중립적일 것으로 예상된다. 4분기 예상 혼합 관세율은 15%를 약간 넘는 수준이다.

리스크 및 관전 포인트

• 환율 영향으로 3회계분기 매출 성장률이 180bp, 조정 EBITDA가 800만 유로 감소했다. 경영진은 연간 기준으로 매출 성장률에 350bp의 역풍이 작용할 것으로 예상한다.
• 미국 관세는 3회계분기 조정 총마진율을 70bp 하락시켰다. 연간 마진 전망에는 약 200bp의 환율 및 관세 결합 하방 압력이 반영되어 있다.
• 중동 분쟁으로 운송 및 물류비가 증가하고 아랍에미리트(UAE) 등 관광 의존도가 높은 시장의 수요에 영향을 미쳤다. 경영진은 이제 회계연도 하반기 매출 영향이 한 자릿수 높은 수준의 백만 유로 규모에 달할 것으로 예상한다.
• 막힌 신발(Closed-toe) 제품의 성장은 더 높은 ASP와 켤레당 매출총이익을 뒷받침하지만 제조 복잡성으로 인해 총마진율은 약간 낮다.
• 유효세율은 조기 자사주 매입 및 부채 리파이낸싱과 관련된 손금불산입, 일회성 금융비용으로 인해 일시적으로 상승했다.
• 호주가 유통업체 판매 방식에서 온쇼어 직접 운영 모델로 전환함에 따라 매출 계절성이 1회계분기 및 4회계분기로 이동하여 APAC의 분기별 비교에 영향을 미쳤다.

애널리스트 Q&A 주요 내용

경영진은 DTC 성장의 가속화가 매장 확장과 디지털 전환율 개선을 모두 반영한 것이며, 더 젊은 소비자에 도달하기 위해서는 절제된 B2B 유통 채널 관리가 여전히 중요하다고 밝혔다. 유럽에서는 광범위한 시장에서 판촉 활동이 증가했음에도 불구하고 디지털 실적이 개선되었으며, 버켄스탁은 93%의 정가 판매율을 유지했다.

가격 책정과 관련해 경영진은 연초 대비 가격 인상 폭이 인플레이션을 30bp 상회했다고 밝혔다. 회사는 주로 이월 상품, 계절성 컬러, 일부 비어있는 사이즈 범위의 제품에 대해 선별적인 할인을 지속하고 있다. 코어 및 스테디셀러(evergreen) 제품이 전체 사업의 75%~80%를 차지한다.

경영진은 완제품 재고의 70% 이상이 이미 계약 완료된 상태이며 주로 스테디셀러 제품으로 구성되어 있다고 설명했다. 매출 대비 재고자산 비율 상승폭의 절반 이상은 환율 및 자본화된 관세에서 비롯되었으며, 나머지 대부분은 호주 법인의 연결 및 변경된 판매 주기와 관련이 있다.

리파이낸싱 이후 경상 금융비용은 분기당 약 2500만 유로 수준으로 정상화될 것으로 예상된다. 상환된 2029년 만기 5.25% 채권과 달리 2033년 만기 신규 9억 유로 선순위 채권은 4.5% 금리가 적용되지만, 원금 규모가 커짐에 따라 분기별 이자 비용은 약 450만 유로 증가할 것으로 예상된다.

자본 배분에 대해 경영진은 추가 자사주 매입을 검토할 때 시장 상황에 유연하게 대응할 의향이 있다고 밝혔다. 회사는 이미 제한적인 유통 주식 수가 더 줄어드는 것을 방지하기 위해 대규모 거래의 일환으로 자사주를 매입하는 것을 선호하지만, 이사회가 주주 이익에 부합한다고 판단할 경우 공개 유통 주식을 매입할 수도 있다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good morning, and thank you for standing by. Welcome to Birkenstock's Third Quarter of Fiscal 2026 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded. I will now turn the call over to Megan Kulick, Director of Investor Relations.

Megan Kulick

Hello, and thank you, everyone, for joining us today. On the call are Oliver Reichert, Director of Birkenstock Holding plc and Chief Executive Officer of the Birkenstock Group; and Ivica Krolo, Chief Financial Officer of the Birkenstock Group.

Today, we are reporting the financial results for our fiscal third quarter ended June 30, 2026. You may find the press release and a supplemental presentation connected to today's discussion on our Investor Relations website at birkenstock-holding.com. Results have also been filed on Form 6-K with the SEC. We would like to remind you that some of the information provided during this call is forward-looking and accordingly is subject to the safe harbor provisions of federal security laws. These statements are subject to various risks, uncertainties and assumptions, which could cause our actual results to differ materially from these statements. These risks, uncertainties and assumptions are detailed in this morning's press release as well as in our filings with the SEC, which can be found on our website at birkenstock-holding.com.

We undertake no obligation to revise or update any forward-looking statements or information, except for as required by law. We will reference certain non-IFRS financial information. We use non-IFRS measures as we believe they represent the operational performance and underlying results of our business more accurately. The presentation of this non-IFRS information is not intended to be considered by itself or as a substitute for the financial information prepared and presented in accordance with IFRS. Reconciliations of non-IFRS measures to IFRS measures can be found in this morning's press release and in our SEC filings.

Now I'll turn the call over to Oliver.

Oliver Reichert

Good morning, everybody. We performed exceptionally well in Q3 and once again demonstrated the strength of our brands. Given this continued momentum for fiscal 2026, we raised our guidance for revenue growth to 15% in constant currency and adjusted EBITDA of at least EUR 710 million. We delivered another strong quarter. Our revenue grew 15% in constant currency at the high end of our annual target of 13% to 15%. EMEA growth accelerated to 15%. DTC growth accelerated to 16% in constant currency. Adjusted EBITDA margin on a like-for-like basis improved 60 basis points year-over-year. We achieved this despite an increase in costs, especially freight rates due to the conflicts in the Middle East.

We returned capital to shareholders by repurchasing EUR 230 million in shares. We also refinanced and upsized our senior notes at a 75 basis points lower rate. We continue to grow in our white spaces. APAC continued its high-quality and DTC-led growth, especially in China. We accelerated the pace of retail expansion. We are on track to meet our target of approximately 140 doors by the end of fiscal '26. Importantly, own retail revenue grew 50% in constant currency. Same-store sales were up high single digits.

We saw a strong acceleration in EMEA digital growth, capturing more demand in our own e-com channel. Closed-toe penetration was up 500 basis points, consistent with recent trends and in line with our goal to expand usage occasions for our footbed. Product mix contributed over half of the growth in ASP. We saw double-digit growth across all of our regions. Our Americas business was up 14% in constant currency. Youth retailers and sporting goods stores continue to lead B2B growth with sellout at key partners in these channels up above 20% year-over-year.

Within the Americas DTC business, we saw very strong retail growth as we continue to open new stores to capture more in-person shopping demand in our own doors. We opened 4 new stores in the U.S., bringing the total to 21. Growth in EMEA was 15%. In the largest, most important quarter for EMEA, we saw accelerating consumer demand, especially in our DTC business, both online and in-store with strong full price realization of 93%. We opened 4 stores during the quarter, bringing the total in EMEA to 50.

APAC grew 23% in constant currency. Excluding Australia, APAC growth was close to 30%. Australia's growth in the quarter was impacted by a shift in quarterly cadence as a result of the distributor acquisition. We are very confident in our APAC target for the full year. Importantly, we had over 50% growth in China, the country with the highest ASP, a testament to our high-quality premium brand positioning in the region. Within the APAC segment, we opened 5 new owned stores, bringing the total to 53.

On the product side, we continue to innovate and drive newness in both closed-toe and sandals. This innovation is most visible with our premium 1774 collection. We introduced new Raffia, Canvas and premium leather executions in Naples, Boston, Arizona and Gizeh. We also collaborated most recently with Song for the Mute, Ader Error and Repetto, a very successful launch targeting the female-led and growing popularity of ballet flats. This global movement also resulted in a very strong demand for the Mary Jane style, Santa Clarita, one of the newest mainline silhouette launches. This once again demonstrates our ability to create a trend within our brand.

While demand for the Boston remains very strong, other clog executions also performed exceptionally well. For example, the Naples grew by more than 4x the units sold year-over-year. We also saw very strong growth in shoes, led by Utti, a lace-up moc-toe, which more than doubled in units sold year-over-year. Overall, non-Boston closed-toe executions were up more than 50%. About half of our top 20 silhouettes are closed-toe, including 3 that were introduced within the past 3 years.

In our sandal business, we saw the strongest growth from our newest seasonal execution such as flowers, rivets, buckles, prints and textiles. Growth was especially strong in our Mayari, Madrid and Siena silhouettes. We highlight this newness most prominently within our DTC business, driving growth in our own channels. We remain super confident in the strength of our brand. We are purpose-driven and see strong global demand for the footbed. We target a diverse range of consumers across geography, gender, age and income.

Our total addressable market is only limited by the global population. This gives us flexibility to drive growth regardless of global or regional macro conditions. We manage our distribution with discipline to maintain scarcity, properly segment the market, manage channel growth and protect full price realization.

Now I will pass the call over to Ivica to go through the quarterly results in more detail.

Ivica Krolo

Thanks, Oliver. I'm happy to share with you details of Birkenstock's performance for the third quarter of fiscal 2026, which exceeded our expectations. We generated third quarter revenues of EUR 720 million, growth of 13% on a reported basis. Growth in constant currency was 15% at the high end of our 13% to 15% expectation.

The depreciation in the U.S. dollar, Canadian dollar and Asian currencies like the Indian rupee and the Japanese yen compared to the third quarter of 2025 caused a 180 basis points headwind to revenue growth in the quarter. For reference, in the third quarter of 2026, the average euro to U.S. dollar rate was $1.16, up from $1.13 in Q3 of fiscal 2025.

We saw strong growth across all segments in the quarter. The Americas segment was up 14% in constant currency, continuing the trend we saw in the first half of the year and reflecting the consistent strength in our most developed markets. EMEA was up 15% in both reported and constant currency, a strong acceleration from Q2, driven by particularly strong D2C in Europe in both online and retail.

We continue to see some localized impact in the Middle East related to the conflicts in the Gulf region, particularly in the UAE, which is highly dependent on tourism and export demand. This has been offset by strong domestic demand in markets such as Saudi Arabia. Overall, the Q3 performance was better than anticipated.

APAC was up 23% in constant currency. APAC quarterly growth rates are skewed due to the changed revenue pattern from the Australia business. Prior to the acquisition, revenues were recognized when we delivered to the distributor before the peak season. We are now realizing revenues in line with the local market dynamics and seasonality.

The Australian spring/summer months are September to February and D2C and B2B sellout peaks in these months, which aligns with our Q1 and Q4, which differs from the revenue realization pattern pre-transaction. Therefore, Q3 Australia growth was lower versus last year, which, as one of our top markets in the region had an impact on the APAC growth rate. Excluding the impact from Australia timing shifts, our APAC growth was close to 30%. We continue to expect APAC to grow at twice the pace of the other segments for the full year.

By channel for the year, B2B was up 15% in constant currency, consistent with the trends of the last few quarters on the back of continued strong demand at our key partners. D2C accelerated strongly to 16% in constant currency, up 400 basis points from 12% growth in Q2 and outpaced B2B in the quarter. Our digital growth accelerated very nicely compared to the first half of the year. Many of the actions we are taking to drive improved conversion are beginning to show results. This includes improved content, enhanced user experience, including simplified checkout options and expanded loyalty and member benefits.

Retail was up 50% as we continue to see very strong performance from our new and existing doors. We added 13 new owned stores, bringing our total to 124. Same-store sales growth was up high single digits. Adjusted gross profit margin for the third quarter was 59.2%, down 130 basis points year-over-year, mainly driven by 60 basis points of pressure from FX and 70 basis points of pressure from incremental U.S. tariffs. Adjusted gross profit margin, excluding these effects, was up 10 basis points year-over-year. While we continue to benefit from better capacity absorption, which contributed 50 basis points to adjusted gross profit margin, product mix caused a 40 basis points drag on margin.

The ongoing shift to closed-toe silhouettes comes with a slight margin drag due to the manufacturing complexity and higher consumption of production minutes. However, the shift is very beneficial for us as it yields higher ASP and higher gross profit per pair despite the slightly lower-than-average gross margin percentage. Selling and distribution expenses were EUR 186 million in the third quarter, representing 25.9% of revenue. This was up 30 basis points from the prior year, primarily due to accelerated retail expansion and some higher logistics costs as a result of the conflicts in the Middle East.

General and administration expenses were EUR 33 million or 4.5% of revenue, down 40 basis points year-over-year due to lower IT expenses and fixed cost leverage. Adjusted EBITDA in the third quarter of EUR 242 million was up 11% year-over-year. The flow-through of FX effects reduced adjusted EBITDA by EUR 8 million. Excluding this FX impact, EBITDA was up 15%.

Adjusted EBITDA margin of 33.7% was down 70 basis points year-over-year due to 130 basis points of pressure from FX and tariffs. Excluding these impacts, adjusted EBITDA margin would have been up 60 basis points. This improvement is despite the increase in freight and logistics costs.

Adjusted net profit was EUR 134 million in the third quarter, up 15% year-over-year. Adjusted EPS for Q3 was EUR 0.74, up 19% from EUR 0.62 a year ago. The debt refinancing triggered a EUR 11.7 million expense from the accelerated amortization of the transaction cost and the derecognition of the embedded derivative of the original senior notes. The ASR triggered a EUR 10.6 million expense from fair value changes due to share price movements during the term of the ASR. These onetime noncash expenses were recognized in finance costs and were excluded from adjusted net profit.

We generated EUR 247 million in operating cash during the quarter compared to EUR 261 million in the prior year due to higher income tax payments totaling EUR 77 million. We ended the quarter with cash and cash equivalents of EUR 694 million after the share repurchase of EUR 230 million and the refinancing and upsizing of our long-term senior notes. As a reminder, in June, we repaid EUR 428.5 million of 5.25% senior notes due 2029 and issued EUR 900 million new senior notes due 2033 at 4.5%. The remaining excess cash added to the balance sheet gives us flexibility to further enhance shareholder value with an additional EUR 500 million share repurchase or the refinancing of other existing debt subject to market conditions.

Our inventory to sales ratio was 37% in the quarter, up from 33% a quarter ago. The increase from last year is largely driven by the increase in capitalized tariffs and FX effects. Our DSO for the quarter were healthy 45 days, up slightly from 43 a year ago. During the quarter, we spent EUR 26 million in CapEx, adding to our production capacity in Arouca, Gorlitz and Pasewalk, beginning the build-out of Wittichenau and continuing our investments in retail and IT. We also paid the second tranche of the purchase price for Birkenstock Australia of EUR 9 million. Our net leverage was 1.8x as of June 30, 2026, up from 1.5x at September 30, 2025, reflecting the cash outflows from the ASR. Excluding the ASR, net leverage would have been approximately 1.4x.

Turning to our outlook for the fourth quarter and fiscal 2026. In the fourth quarter, we expect revenue growth in constant currency within our annual guidance range of 13% to 15%. We expect FX to be relatively neutral in Q4, resulting in similar growth rate on a reported and constant currency basis. On margins for Q4, we expect FX to be neutral. On tariffs, given the recently announced agreement with the European Union and the implementation of Section 301 tariffs, we now expect a blended tariff rate for Q4 of just over 15%, below what we have experienced under the Section 122 tariffs. As a result, tariffs should also be relatively neutral year-over-year in Q4.

For the full year, we now expect revenue growth of 15% at the high end of our guidance range of 13% to 15%. For the full year, the FX drag is expected to be 350 basis points. For the full year, we continue to expect adjusted gross margin of 57% to 57.5% and adjusted EBITDA margin of 30.2% to 30.5%, inclusive of approximately 200 basis points of pressure from FX and U.S. tariffs combined. Adjusted EBITDA is now expected to be at least EUR 710 million for the fiscal year. Our expected tax rate is 30% to 31%, up from our prior forecast of 26% to 28% due to the nontax deductible expenses largely associated with the ASR and debt issuance.

Including the tax impact of the accelerated share repurchase as well as the refinancing and upsizing of our senior notes, adjusted EPS is expected to be EUR 1.90 to EUR 2.05, in line with our prior forecast. This includes approximately EUR 0.15 to EUR 0.20 of pressure from FX. This does not include the impact of any additional share repurchase beyond the ASR completed end of June. CapEx should be in the range of EUR 110 million to EUR 130 million. We have a net leverage target for the end of fiscal 2026 of approximately 1.6 to 1.7x, up from our previous forecast of 1.3 to 1.4x after the impact of the ASR, but excluding any additional share repurchases.

With that, I'll turn it back to Oliver to close.

Oliver Reichert

Thanks, Ivica. We are super happy increasing our revenue growth target to 15% in constant currency and adjusted EBITDA to at least EUR 710 million. Our third quarter results once again prove that demand for our beloved brand remains strong. Even in times of inflationary pressure on consumer wallets, we remain an accessible and desired brand. We are excited about the opportunities in the fast-growing and underpenetrated APAC market in expanding our own retail fleet and in the newness and innovation within our brand.

As we look toward the final quarter of our fiscal 2026 and beyond, we plan to continue to grow our share and expand our following within our new younger target group, building lifetime connections with our consumers across regions and channels, drive innovation and create newness in both our closed-toe and in our sandal business, actively steer product between geographies and channels to optimize margins, maintain scarcity and protect brand equity, continue to use our strong balance sheet and capital allocation decision to drive shareholder returns. Our organic growth generates substantial cash flow. Over the past 2 years, our operating cash flow totaled EUR 774 million. Our first priority remains to invest in the business. Of this EUR 774 million, EUR 189 million was invested in CapEx. Given our currently undervalued shares, we will look for opportunities to continue our buybacks. We will now take your questions.

Operator

[Operator Instructions] Your first question comes from the line of Matthew Boss with JPMorgan.

질의응답

Matthew Boss

Congrats on a nice quarter. So Oliver, nice recovery in direct-to-consumer growth this quarter, came in above B2B for the first time in 2 years. Can you speak to drivers of the improvement at direct-to-consumer and what you're seeing in B2B relative to D2C? And then relative to the raised top line guide for the year, could you talk to trends in the fourth quarter? And do you think there's potential upside to your 15% top line forecast for the year?

Oliver Reichert

Matt, thank you for your question. I'm -- maybe a bit hard to understand because I'm dialing in from [indiscernible]. I'm heavy selling shoes here, as you can imagine, it's quite hot. But hopefully, you can hear me loud and clear. So to come back to your question, we delivered strong growth across both channels, of course, D2C outpaced B2B supported by the investments we are making in both own retail and in our own digital business. Both channels are and will remain important drivers for our business.

The D2C performance was driven by own retail, where our expanded footprint and faster store opening pace delivered 50% growth. Same-store sales were also strong, up high single digits, which reflects the continued demand for our brand across our existing store fleet. We also saw accelerating online growth. Newness on the product side, greater personalization and stronger storytelling are making the digital experience more compelling and driving the conversion. This was most impactful in Europe, where we saw a clear step-up in online performance with 93% full price realization, even as the broader market became more promotional, as you know.

So we are focused on growing the business where we can and create the most value. That means continuing to invest in D2C while maintaining a strong disciplined B2B business. Our wholesale partners are an important part of our growth strategy. They give us efficient access to new customers, particularly younger consumers while helping us maintain high-quality distribution across our markets. Our 15% constant currency revenue growth guidance reflects the strength we are seeing today across channels and markets. And last part of your question, we feel very confident about the momentum in the business and our long-term revenue growth target is 13% to 15%.

Operator

Your next question comes from the line of Laurent Vasilescu from BNP Paribas.

Laurent Vasilescu

I wanted to ask about EMEA. EMEA growth accelerated nicely versus Q2. Did you see any impact from the conflict in the Middle East? Could you provide additional color on key drivers behind the acceleration in growth? And to what extent did favorable weather conditions contribute to the growth relative to the underlying trends in the business? And curious, are you seeing any continuation of these trends into 4Q within EMEA?

Ivica Krolo

Laurent, thank you for your question. It's Ivica. So indeed, we did continue to see an impact from the conflict in the Middle East, although certainly it was less pronounced than in Q2, basically at the onset of the conflicts back then. We were able to mitigate much of the pressure through adjustments in the delivery routes and strength in the other parts of the region. For instance, if you think of Saudi Arabia, a very resilient market and less dependent on tourism and expats.

So in general, Q4 is a larger quarter in the Middle East. So we expect slightly more of an impact also due to the resumption of hostilities in the region itself. That said, we expect the total second half impact to be below the EUR 10 million to EUR 12 million we originally estimated. We now see this totaling high single-digit millions. Overall, the growth acceleration was largely driven by D2C demand, as Oliver already mentioned. Demand proved very resilient across the region, and we saw nice growth in both retail and online.

We're also seeing the benefits of the investments and actions we've taken to drive traffic and improve conversion. This is also something we've spoke about in January at our Capital Markets Day, and this includes enhanced upper funnel online marketing, stronger content and optimization of the inside experience, and this is all contributing positively.

So on the weather, definitely, warmer temperatures are generally favorable to our business. However, we are already seeing improved trends ahead of that, and those trends have continued into the first weeks of our fiscal Q4. And finally, to note, there was bad weather in some of our other markets in Q3 as well.

Operator

Your next question comes from the line of Lorraine Hutchinson with Bank of America.

Lorraine Maikis

So pricing over inflation was not a contributor to gross margin this quarter as it has been for the past few. Were you more promotional? And how should we think about your ability to pass inflation through with pricing when customers are a little more price sensitive? Are you seeing any signs of consumer pushback on pricing, particularly in early back-to-school?

Ivica Krolo

Lorraine, it's Ivica. So our pricing decisions are made with the goal of passing through inflation and protecting gross margin, something that we do very consistently. There can be timing differences from when we take pricing and when the inflation works its way through the inventory and flows through the COGS. And please keep in mind year-to-date, the pricing over inflation benefit to gross margin is 30 basis points.

On promotion, at an overall industry level, we see indeed a higher markdown activity as retailers compete for a more constrained consumer wallet. In this context, we continue to deliver a superior full price realization and gross margin. This basically underlines the strength of our brand and our markdown discipline, which remains unchanged. We are and will selectively discount as we always have.

Any active markdown we do is to effectively manage our seasonal excess stock as our business continues to grow. So as you know, 75% to 80% of our business is core products and evergreen styles. Our markdown assortment is centered very much around prior season merchandise, seasonal colorways and broken size runs.

And the beauty of our brand is we serve a broad range of price points from $50 to $1,500 and remain accessible when consumers are tightening up their spending. For those consumers who are more price sensitive, we offer executions in Birko-Flor, EVA or textile, for example.

And importantly, any action we have taken are not negatively impacting our margin. As you can see from our results, gross margin was even up 10 basis points on a like-for-like basis.

And finally, on back-to-school, we continue to be a must-have brand for the school year, and we continue to see a very strong youth-driven demand in the U.S.

Operator

Your next question comes from the line of Krisztina Katai, an equity research analyst.

Krisztina Katai

Congrats on a good quarter. You provided helpful color that the shift towards closed-toe silhouettes created, I think, a roughly 40 basis point pressure on gross margin. Can you help us quantify that further? What is the difference in gross margin between closed-toe and open toe? And then secondly, maybe if you could provide more color on the components of growth this quarter just across ASPs and volume.

Ivica Krolo

Krisztina, it's Ivica. Thank you for your question. And first, on the margin impact. So as you know, we don't disclose specific margin on a product level, but the complexity of higher ASP, non-Boston closed-toe shoes and boots executions require more labor input and consume more production minutes. So this quarter, we saw an over 500 basis points increase in our closed-toe share, and this is driven by over 50% growth in the non-Boston silhouettes with Naples units up more than 4x and Utti more than doubling year-over-year in Q3. That impacted the gross margin.

These are great, highly profitable products, which are helping us to attract new consumers and broaden the usage occasions for the footbed. And they generate a higher ASP and profit dollars per pair, although a slightly lower but still very strong margin. And we use contract manufacturers in Portugal for some of their production. So in-sourcing parts of this production now, the demand is scaling is a future margin opportunity for us definitely.

And then on your -- the second part of your question on ASP versus volume, it was very much in line with our 1/3, 2/3 target and reflects the continued build-out of our production capacity across the network, which is progressing according to plan.

Operator

Your next question comes from the line of Michael Binetti with Evercore ISI.

Unknown Analyst

It's Carson on here for Michael. Sorry to get into the nitty-gritty of the model, but can you walk us through the tax rate? It's coming in above the original guidance of 27% to 28%. Is this 30% to 31% the new baseline for taxes? And then I would have expected more upside to EPS for the year given the strong EBITDA outlook and share repurchase. Why aren't we seeing the flow-through to EPS? And then related to that, what's the normalized finance cost on a quarterly basis with the new debt issued? And then should we expect to see less volatility in total finance costs going forward?

Ivica Krolo

Carson, thank you for your question. The first one on tax. No, we do not believe that 30% to 31% is the new baseline. Going forward, we expect a recurring tax rate in the high 20s. This year, it is elevated due to the nondeductible, nonrecurring, noncash finance expenses associated with the refinancing that we have completed over the course of Q3, the ASR and the mark-to-market valuations in the embedded derivative expenses.

On EPS, this year will be impacted by this higher effective tax rate with a normalized tax rate, adjusted EPS growth would have been 23% in the third quarter. For the full year, the impact is about EUR 0.08 per share. To your last part of your question on the finance cost. This quarter, finance costs were impacted by, again, one-time noncash expenses related to the refinancing of EUR 11.7 million and the ASR of EUR 10.6 million. So we do not expect to incur these expenses going forward.

What will result, however, in a recurring way and with a recurring change is the issuance of the new EUR 900 million senior notes and the repayment of the original close to EUR 430 million notes. This will increase interest expense within finance costs by approximately EUR 4.5 million per quarter and finance costs should normalize at around EUR 25 million per quarter. Overall, we expect volatility to decrease due to lower fluctuations in the embedded derivative resulting from the longer time to optional redemption of the new senior notes.

Operator

Your next question comes from the line of Simeon Siegel with Guggenheim Securities.

Simeon Siegel

Ivica, can you just speak to the spread between inventory and sales? How are you thinking about the composition of your inventory now? Maybe how the change in units versus euros? And how are you thinking about the go-forward inventory levels? And then just to clarify on the Australia timing shift. Did sales shift earlier into 2Q or later into 4Q? And is that change now behind us? Just curious how to think about the underlying comment you made or the underlying trends comment you made and the go-forward expectations.

Ivica Krolo

Simeon, it's Ivica again. Thank you for your question. The first part on the inventory -- so as you are well aware, over 70% of our finished goods inventory is already contracted. Most of this inventory is core basically evergreen products, which don't go out of style and definitely allowing us for better preproduction and production balancing and definitely also helps our planning.

More than half of the increase in our stock-to-sales ratio is attributable to FX and capitalized tariffs, and this is something that we've spoken about already in our earnings call in Q2. The other half is largely attributable to the consolidation of the Australia business and the timing of revenue recognition and sell-through of the inventory there. We're now running an onshore business and are more bound to the cadence of selling in the region itself.

Operator

Your next question comes from the line of Adrien Duverger with Goldman Sachs.

Adrien Duverger

Could you please comment a bit more on the performance in the U.S.? More specifically, how is the order book performing? Could you please comment maybe on the sell-in versus sell-out at your wholesale partners? I think you commented already that you have seen very good growth from these youth department stores and sporting goods.

And also, yes, I guess, following up on the prior question, are you confident that there is no buildup of inventory anywhere in the wholesale channel? And is there anything you're seeing in terms of wholesale appetite for your products, I guess, as well in terms of consumer feedback? That would be super helpful.

Ivica Krolo

Thank you very much, Adrien. It's Ivica again. So on your question with regards to U.S. B2B. And indeed, as Oliver said earlier in this call, we're continuing to see strong youth-led demand, and basically, this is the cohort that is highly growing and effectively being new to the brand. So this is what we call the footbed newbies. Sell-through across these channels in Q3 was up by 20% plus year-over-year. So continued strength we've observed for the last couple of quarters and very similar to what you have seen already before.

With regards to back-to-school, as mentioned, we are one of the must-have brand. We have -- are continuing to see this youth-driven growth. And with regards to coming back again to the markdown activity, there is no change to our approach. And if we would be marking down, you would immediately see it in our gross margin, but you don't see it. It's just the opposite. You see an increase on a like-for-like basis, and this is what we will continue to build on.

Operator

Your next question comes from the line of Ed Aubin with Morgan Stanley.

Edouard Aubin

So just a question on China, actually. Obviously, your exposure to China is small. I think it was about 2% last year, but you mentioned on the call that you're growing about 50% year-over-year. Could you just update us on your plan to continue to grow in that market? And then just on production capacity because Oliver mentioned your sustained CapEx investment. I think on my estimates, you're going to be selling about 42 million pairs this year. When will you start to be thinking about building new factories or with the existing capacity, what could be the -- potentially the number of pairs you could be producing every year?

Ivica Krolo

Edouard, it's Ivica. So the first part of your question on China. So the business there was up 50% in the quarter and was our largest market in APAC in Q3. And it's very much a premium market for us. It's high-quality retail-led growth with the highest ASP globally. We'll continue to follow the road map we outlined for the market at our Capital Markets Day in January. So this is including raising brand awareness through new stores, both company-owned and partner doors, local activation, brand-building events. So events do play a key role in increasing the brand awareness through the region, and this will be built up further.

So the second part on your question, Edouard, with regards to build-out of capacity, especially with regards to production. So we are on track to deliver 10% unit growth, as we've said at our Capital Markets Day and the build-out of the entire manufacturing network, especially with regards to Wittichenau, but also Arouca in Portugal and Gorlitz is progressing according to plan, and we are well on track to deliver the target unit growth.

Operator

Your next question comes from the line of Mark Altschwager with Baird.

Mark Altschwager

I wanted to hit on capital allocation. You have another, I believe, EUR 500 million of liquidity for buybacks. How do you anticipate executing the additional buyback program going forward? The last one was the ASR, obviously, how are you thinking about that versus a regular ongoing buyback program? And relatedly, net leverage 1.8x today, guiding to 1.6x, 1.7x by year-end. Do you have a target leverage ratio? Or what is the leverage level you're going to run in order to complete the buyback program?

Ivica Krolo

Mark, thank you for your question. It's Ivica again. And you are right, we have a significant cash balance from which we can execute additional buybacks, and we plan to do so. We will be responsive to capital market activity and make the decision how and when to utilize that cash based on a number of factors, including a potential liquidity events for our largest shareholder, the timing naturally of which we do not control.

Ideally, we would utilize the cash as we did the EUR 200 million last year and buy shares as part of a larger transaction. So we do not further reduce our public float, which is, as you know, already very low. That said, as we did this year with our most recent ASR, we don't have to wait for a bigger transaction and we'll buy back from the public float if our Board decides that it's in the best interest of our shareholders.

With regards to leverage, we do not have a specific leverage target set. We will keep our options open to allocate capital. However, it is in the best interest of our shareholders.

Operator

Your next question comes from the line of Anna Andreeva with Piper Sandler.

For now, we will move on to Dana Telsey from Telsey Advisory Group.

Dana Telsey

Congratulations on the nice results. Oliver, as you think about the closed-toe penetration, which was up so nicely in the quarter, which typically is a summer quarter that's usually more sandals heavy. What was the growth in the sandals category? And the go forward, how do you think about product innovation and newness, whether in sandals or closed-toe and pricing?

Oliver Reichert

Dana, it's Oliver again. Thank you for your question. As you know, our sandal business remains very strong, up mid- high-single digits in constant currency year-over-year. So sandals were particularly strong in our own D2C channel, driven by newness. There's no one else with the footbed and its benefits. So this is a category we own. It's not just Arizona, which is still growing and benefiting from newness. The Mayari, the Madrid and the Siena silhouettes performed particularly well this summer.

The success of our closed-toe business, especially clogs has created true 4-season demand, reducing the seasonal dependence on sandals. This is not just the Boston, it includes the Naples, [indiscernible], Amsterdam and others, all of which are doing very well and building on our momentum in clogs.

We are constantly driving newness and innovation in both open toe and closed-toe, growing our global fan base. We create new trends from within our brands to build and expand our archive and extend usage occasions. I mentioned 2 good examples of this in my opening comments, like the Santa Clarita and the Repetto collaboration to capture the increasing global demand for ballerinas. This will be -- don't forget this, this will be the trend for the next 3, 5 years, the Ballerinas for ladies.

Operator

And with that, we have reached the end of the Q&A session. This concludes today's call. Thank you so much for attending. You may now disconnect.