Fitch upgrades Birkenstock

Fitch Ratings said it upgraded BK LC Lux Finco 1 Sarl's (Birkenstock) long-term issuer default rating to BB- from B+. The agency also boosted Birkenstock Group BV & Co. KG's €375 million term loan B and BK LC US Bidco Inc.'s $800 million term loan B senior secured rating to BB+ from BB-. The recovery rating is RR2. Finally, Fitch hiked Birkenstock’s €430 million of senior unsecured notes due 2029 to BB- from B-.

“The upgrade reflects Birkenstock's high revenue and profit growth over FY21-FY22 (year-end to September 2022), coupled with a material reduction in leverage in FY22. This is supported by the company's premium position with a strong brand and unique health attributes offsetting the risks arising from concentration on one brand and a single product category,” Fitch said in a press release.

The agency said it expects Birkenstock to widen its EBITDA to €500 million by fiscal year 2024.

The outlook is stable.

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