Michael Burry turns a 40-year habit into a major stock bet

Michael Burry is famous for making bets that look strange before they look obvious.

His latest one may be his most personal.

The investor most famous for forecasting the collapse of the U.S. housing market says he has boosted his position in Birkenstock Holding (BIRK) to 5.2%, placing a big bet on over four decades of devotion to the German shoe maker.

Burry has been wearing Birkenstocks since 1987 and recently dubbed the brand his favorite shoe since high school.

But nostalgia alone cannot explain the investment.

Birkenstock reported €720 million in fiscal third-quarter revenue, up 13% year-over-year, and raised its full-year growth forecast. Even as tariffs and foreign exchange pressure margins, the company is increasing direct-to-consumer sales and buying back stock.

That makes Burry’s gamble more fun.

He could be wagering that one of the market’s oldest consumer brands has a lot longer runway for development than investors believe.

Michael Burry turns a 40-year habit into a major investment

Burry’s affiliation with Birkenstock is older than his financial career.

He wrote recently that he has been a “Proud Birkie since ’87” and said in an earlier post that he has bought the shoes for roughly 40 years without noticing a decline in quality.

That history is important since it seems Burry is considering product durability as part of the investing argument.

In an Aug. 21 Substack post, he stated he added to his position when shares dipped below the $35 level, bringing his stake to 5.2%.

Related: Birkenstock stock price slumps as luxury dream unravels

That is a typical set-up for a contrarian investor.

Shares of Birkenstock are down about 17% this year, according to Stocktwits, despite the company’s solid operational performance.

That’s the disconnect that Burry is typically looking for: a firm demonstrating resiliency while the stock price is exhibiting increasing doubt.

Birkenstock’s last quarter bolstered that argument.

Fiscal third-quarter revenue rose 13% on a reported basis and 15% in constant currency to €720 million. Direct-to-consumer revenue increased 14%, while business-to-business revenue rose 13%.

Birkenstock is growing despite pressure on margins

Perhaps the best part of the quarter was what management did next.

Birkenstock revised its revenue-growth projection for fiscal 2026 to 15% on a constant-currency basis and now anticipates reported sales at the high end of its prior €2.3 billion to €2.35 billion range. Adjusted EBITDA is estimated to be at least €710 million.

Growth is also geographically spread out.

Revenue grew 11% in the Americas, 15% in Europe, the Middle East and Africa and 18% in Asia-Pacific on a reported basis. Asia Pacific growth was 23% in constant currency.

That’s not to say the firm isn’t under pressure.

Gross margin declined to 59.1% from 60.5% a year earlier, partially reflecting foreign-exchange impacts and increased U.S. tariffs. Net profit declined to €110 million, a fall of 15%, while adjusted net profit was up 15%.

Birkenstock was so confident that it completed a €230 million accelerated share buyback in the quarter, decreasing its outstanding share count by almost 6 million shares.

That mix might be more important to Burry than short-term margin pressure.

The company is still growing at a double-digit rate, still generating strong margins, and is actively returning capital while its shares trade well below previous highs.

Wall Street is starting to warm to Birkenstock again

Burry isn’t the only investor becoming more positive.

Telsey Advisory Group boosted its price objective on Birkenstock to $50 from $45, while keeping an Outperform rating on the company, Stocktwits said.

Bernstein likewise upped its target to $55 from $50 but maintained a Market Perform rating, citing growing confidence in the brand.

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The market’s response to Birkenstock’s last quarter was noteworthy, too.

Its shares surged almost 15% after the business lifted its forecast but remained below its 2024 top, Reuters said.

That shows investors are starting to disconnect the softer stock sentiment from underlying customer desire for the brand.

Burry’s Birkenstock bet is really about durability

The easy headline is that Burry likes Birkenstocks.

The more interesting story is why he is ready to control so much of the corporation behind them.

Birkenstock has built its brand for centuries on product consistency, comfort and recognized design. The firm claims to have been founded in 1774 and assembles more than 95% of its goods in Germany.

Burry’s statements show he thinks stability is a good thing, economically.

For the moment, the company’s metrics make its case: double-digit growth, improved outlook, and ongoing demand at full price even with tariffs and currency impact.

That doesn’t mean the stock is risk-free. Margins are being squeezed, purchasing might drop down, and fashion companies can lose their glamor fast.

But Burry seems to be banking that Birkenstock is more than a passing craze.

He’s been wearing those shoes for over four decades and is now putting some considerable money behind that confidence.

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