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Wall Street expects Birkenstock to meet its fiscal 2026 guidance estimate, but some raise possible deceleration concerns next year due to promotions.

Birkenstock is expected to post third quarter revenue growth of 13 percent next Thursday, but will that trend continue into the fourth quarter or will the brand see headwinds ahead?

Thus far, proprietary data from UBS in a May survey showed that Birkenstock shoes remain a shopper favorite in Europe, based on credit card, debit card and account bank transactions that track consumer spending. That data point showed Birkenstock sales up 1 percent year-over-year. And even on a two-year stack, Birkenstock was on the leader board, ranking high with consumers.

When the brand posted second quarter results in May, Birkenstock chief executive officer Oliver Reichert said brand health and momentum was “very strong” at 90 percent full-price sell-through. The German footwear brand addresses a wide range of price points. And while its core clog business is what the brand is best known for, its expanded closed-toe line continues to resonate with consumers. At the time, Reichert said the company wasn’t seeing any sales slowdown in the second half of fiscal 2026.

Telsey Advisory Group’s (TAG) chief investment officer Dana Telsey is expecting revenue growth for the quarter of 13 percent to 717.8 million euros, just above the consensus estimate of 714.5 million euros. The company projected revenue growth of 13 percent to 15 percent in constant currency for fiscal year 2026, which sets an expectation for the same range for the third and fourth quarters. The company, which operates under a scarcity model for how it manages distribution of product, also said it wasn’t expecting any sequential deceleration trends.

“As consumers remain intentional with their purchases, we see Birkenstock as a brand that can continue to win in the marketplace through its competitive advantage of a high-end lifestyle positioning but at accessible price points, supported by its proprietary foot bed that provides solutions for its customers,” Telsey concluded.

BTIG’s Janine Stichter, managing director and consumer retail and lifestyle brands analyst, expects revenue growth of 12.8 percent. She expects the management to reiterate its fiscal ’26 outlook.

“While our overall checks remain healthy, we continue to monitor slight upticks in advertised promos, which we believe have been strategic in support of direct-to-consumer (DTC) growth,” Stichter said. She also noted that web traffic accelerated meaningfully within the quarter, which likely can be attributed to a focus on strategic “members only-discounts.” And with other footwear firms, including Steve Madden, noting that consumers want casual alternatives beyond sneakers, “we view [that] as a positive for Birkenstock,” Stichter said.

The BTIG analyst also sees as a plus, which she said remains under-appreciated, the “quality of Birkenstock’s distribution network, which allows wholesale to serve as a key customer acquisition vehicle and a highly profitable extension of its own DTC business.”

William Blair’s Sharon Zackfia expects revenue growth at the lower end of company guidance, meaning closer to the 13 percent range, noting also the potential impact of languishing consumer sentiment and war-related disruptions in EMEA (Europe, Middle East and Africa). The APAC (Asia Pacific) region is expected to lead revenue growth by a high-20 percent increase, with EMEA decelerating to low-double-digit growth from 10.5 percent in the second quarter as the impact of spiking energy prices on consumer confidence and geopolitical pressure in the Middle East take their tolls.

She cited as key risks for the brand includes higher markdowns should Birkenstock’s brand soften in key markets (offset somewhat by movement of product to underserved regions such as APAC) and intense competition from copycat products that are often at lower prices.

Williams Trading analyst Sam Poser expressed concern that the brand “may be losing its premium positioning.”

He raised the concern that “consumers may be losing their sense of urgency, and the need to buy goods at full price in Europe, and perhaps even in the U.S.” While he doesn’t foresee any risk to fiscal year 2026 results, “[we] are a bit concerned about fiscal year 2027,” Poser said.

Poser pointed to the 27 Zalando country websites, noting that as of July 28, there is an average of 589 style/colorways of Birkenstock footwear. “On average, 197 of those styles, or 32.3 percent of the total, are on sale,” he noted. “Regardless of what Birkenstock is directly selling to Zalando, the number of styles, and the promotional activity, is worrisome,” he said.

And while other retailers that include Journeys, Nordstrom, Shoe Carnival, DSW, Harrods and others also sell the brand, many of those styles are at a discount. And Poser noted that Birkenstock might have produced too many narrow width footwear for its women’s market, citing to an over supply of narrow width shoes in both the U.S. and Europe.

Meanwhile, the German footwear brand continues to innovate on its offerings. Last week, it teamed up again for the second time with South Korean label Ader Error on a range of footwear as part of Birkenstock’s ultra-premium, high-fashion 1774 line featuring luxury designer collaborations. This followed the reveal of collaborations with Sacai and Repetto. And separately, Danielle Frankel joined forces with Birkenstock earlier this year for a unique line of wedding shoes.

iPhone 18 Pro is only weeks away from launching, and a new report from Culpium indicates it could have limited availability due to a DRAM shortage holding up production.

DRAM shortage reportedly delaying iPhone 18 Pro production, Apple concerned about supply

Tim Culpan writes at Culpium:

This year’s iPhone will use Apple’s A20 Pro processor, the first chip to be manufactured on TSMC’s N2 node which started shipping in volume earlier this year. The A20 Pro then gets packaged alongside DRAM using TSMC’s new Wafer-Level Multi-Chip Module (WMCM) process. […]

Production of the A20 Pro at N2 is progressing well with good volume and yields, I am told. But wafers are piling up waiting for DRAM before they can be packaged and sent on to the next step.

As a result, TSMC is sitting on around $1 billion of Apple processors awaiting DRAM delivery before they can be packaged and moved on to the next step.

The result of this memory shortage is that Apple may not be able to hit its desired levels of iPhone 18 Pro inventory.

Culpan says that Apple and its assemblers “remain confident that they can meet initial demand,” but are concerned about wait times for online orders getting pushed out quickly, and retail inventory drying up.

This shortage could be amplified by the fact that iPhone shoppers won’t have many options besides the iPhone 18 Pro.

For the first time, Apple reportedly won’t launch its new base model (the iPhone 18) in the fall. Instead, it’s being pushed to early 2027. iPhone Air 2 isn’t expected this fall either.

With the only other new model this fall being the very pricey iPhone Ultra, demand for iPhone 18 Pro and Pro Max could be higher than usual. And it sounds like that might result in longer waits for buyers.

Over the last year, we’ve seen more generalist venture capital firms make forays into defense tech, a niche once relegated to specialized investors comfortable with revenue based on uneven government contracts and who weren’t restricted from investing in weapons makers by their limited partners.

Furientis, a startup founded last year that builds missiles for intercepting attacks, is close to raising $25 million in a funding round that would value it more than $125 million including the money invested, two people familiar with the investment tell us. And we’re hearing Benchmark, known for backing Uber and Snap in their early days, has been in talks to lead, the people said.

Furientis would stand out as a Benchmark investment. So far this year, the venture firm has led investments in AI agent startup Gumloop and sales platform Monaco, the type of asset-light software investments that have been the firm’s bread and butter over decades. That said, it also led a $170 million round for the space data center company Starcloud earlier this year. And it bought $250 million in shares in late 2025 and early 2026 in Cerebras, the AI chips designer that went public earlier this year.

Benchmark and Furientis declined to comment. Details of the round could change.

If it goes ahead with the investment, Benchmark would be joining an increasingly crowded field of VC firms backing defense tech. The commercial success of SpaceX and Anduril, and a defense-tech friendly Trump administration, have attracted more investors to these startups.

Ribbit Capital, the Micky Malka-founded firm that once hewed to a fintech focus, recently co-led a $300 million round for another missile startup, Mach Industries. Kleiner Perkins, known for investments in Amazon and Google, earlier this year backed autonomous ship builder Saronic Technologies, leading its Series D at a $9.25 billion post-money valuation.

And OpenAI investor Thrive Capital has backed multiple rounds in Palmer Luckey’s Anduril Industries, recently co-leading its Series H funding round at a $61 billion post-money valuation.

Some traditional venture capital firms have in the past shied away from defense tech not only because of the high costs of building and running hardware businesses, but also because selling to one buyer (the government) doesn’t scale in the way traditional VC businesses have. But the war with Iran has depleted American missile supplies, making novel solutions all the more appealing to the U.S. government. The Pentagon recently allocated $53 billion to missile and rocket production and is also attempting to simplify the procurement process, which might accommodate startups selling into the government.

The El Segundo, Calif., Furientis aims to solve the supply crunch by making missile interceptors en masse and for a lot less than legacy defence contractors. Co-founder and CEO Brody Franzen, who previously worked at Virgin Galactic and the missile startup Castelion, told Fortune earlier this year that Furientis is using commercial off-the-shelf components and automotive-style assembly processes to keep costs to $250,000 per missile, compared to the $1 million to $5 million cost of its legacy competitors.

Silent Ventures, a solo GP firm led by defense tech investor Jackson Moses, led Furientis’s $5 million pre-seed round in May. Bessemer Ventures, Multiball Capital and SV Angel also invested.

New assessment updates past forecasts that Russia’s leader wouldn’t provoke the alliance during the Ukraine war

WASHINGTON—Russian President Vladimir Putin could try to test NATO’s resolve with a limited assault on an allied country in the next few years, according to new U.S. intelligence reports that posit possible scenarios ranging from a cyberattack to a small-scale land incursion.

The assessments, described by U.S. officials, come amid a shortfall in certain critical munitions that the military would need to confront Russia or China in a potential future war. The U.S. has severely degraded its stockpile of these weapons because of transfers to Ukraine after Russia’s invasion, as well as the U.S. conflict with Iran. Stockpiles at risk include long-range Precision Strike Missiles and Army Tactical Missile Systems, as well as short-range Stinger surface-to-air missiles, other officials said.

The U.S. had previously assessed that Putin wouldn’t provoke a North Atlantic Treaty Organization country while he is still fighting in Ukraine. But that assessment changed earlier this year, the U.S. officials said, as Putin is increasingly squeezed in Ukraine and under pressure at home to secure a victory. Kyiv’s drones are inflicting growing damage on both Russia’s army and oil industry, while Putin’s forces are making smaller gains at the front line amid heavy casualties.

U.S. and European leaders increasingly see signs of Russia conducting probing attacks to test NATO’s resolve, including Russian cruise missiles that have landed in Poland and drones flown into Romania.

Putin’s goal in attacking NATO during a continuing war with Ukraine, if it happens, would be to fracture the alliance, the U.S. officials said.

“The question mark is how the United States would respond in that case,” said Heather Conley, senior fellow with the American Enterprise Institute, on a possible Russian incursion. “It has always been a goal [of Russia’s] to challenge the credibility of NATO and to separate the United States from its allies.”

With Putin struggling to secure the gains he wants in Ukraine, U.S. intelligence officials have been analyzing whether Moscow intends to escalate its aggressive actions toward European allies in the near term, the people said. The concern is that Putin may become more dangerous when backed into a corner, the U.S. officials said.

The possible threats range from a cyberattack on a NATO country or sending unmarked armed groups to occupy territory to a limited incursion on the alliance’s eastern flank. The time frame for any move by Russia is estimated to happen between this fall and 2029, according to the U.S. intelligence assessments.

The likelihood of the most extreme scenario—a limited land incursion—is low, but gets higher as time goes on, according to the reports. Such a move has always been considered extremely unlikely because it would trigger NATO’s Article 5, which commits members to collective defense. But Article 5 isn’t as clear about NATO’s response to cyber or hybrid threats.

“This has always been NATO’s challenge to respond to a sub-Article Five attack, and it’s been very true that to this point, NATO allies have preferred not to escalate,” Conley said. When Russia launched a series of cyberattacks on Estonia in 2007, for example, the country chose to manage the crisis bilaterally.

Spokesmen for the Defense Department and NATO’s Supreme Headquarters Allied Powers Europe declined to discuss sensitive intelligence. A spokesperson for the Office of the Director for National Intelligence didn’t respond to a request for comment.

“We are always thinking through and preparing for any number of scenarios. NATO is watching and we are ready to deter and defend as necessary, which we continue to demonstrate,” said Col. Martin O’Donnell, a NATO spokesman.

The new assessments compound existing concerns among U.S. officials about a shortfall in certain critical munitions. In addition to certain long- and short-range missiles, other stores of critical air defenses are also low, including Patriot, SM-3 and Terminal High Altitude Area Defense interceptors, as well as Thaad radars and air defense artillery units, officials said.

Chief Pentagon spokesman Sean Parnell called claims of munition shortages false. White House spokeswoman Anna Kelly said the U.S. military had “more than enough” munitions to “serve all of President Trump’s strategic goals,” while adding that the president has urged defense contractors to produce more munitions.

“We have everything required to strike at the time and place of the President’s choosing,” Parnell said. “Across multiple combatant commands, we have already executed successful operations while maintaining a deep, ready arsenal to defend our people and our interests. Any adversary who confuses media noise with American weakness will discover the truth the hard way.”

In a potential conflict with Russia, weapons such as the Precision Strike Missile and Army Tactical Missile Systems, both of which are fired by the High Mobility Artillery Rocket System, and Stinger missiles are crucial to repel a land invasion, said Tom Karako of the Center for Strategic and International Studies.

The shortfall of critical munitions has sparked a debate within the U.S. government about declining weapons stocks as Trump weighs next steps in Iran. Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, recently warned the White House of fewer air defense interceptors, The Wall Street Journal previously reported. The issue is a concern for Caine, who believes that the low inventories wouldn’t preclude a resumption of major combat operations against Iran, but would add to the risk.

Analysts outside the government have repeatedly cautioned that the expenditure of munitions in the Middle East could hamper the U.S.’s ability to deter adversaries around the globe, including not only Russia but also China.

A recent report from the Center for Strategic and International Studies covered the seven key munitions that had been used in the war with Iran. For example, the updated report estimates that the U.S. has expended 1,060-1,430 Patriot missiles in the Iran war, leaving as few as 870 in America’s arsenal.

“If it’s just a question of fighting Iran, even though we’ve used half of the interceptors, a little more, we still have half of them left. So we could go on against Iran for quite some time,” said Mark Cancian, a co-author of the CSIS report. “The problem is that the Pentagon is now very worried about what this does in the Western Pacific with China.”

Egan-Jones says it stands by the integrity and rigor of its ratings, which have been banned by a regulator and are the focus of a lawsuit brought by former employees

U.S. insurers have some $40 billion of debt investments on their books that have been privately graded by Egan-Jones, a firm whose ratings have come under significant scrutiny from regulators, according to a Wall Street Journal analysis of public data.

Egan-Jones Ratings, based in King of Prussia, Pa., is being sued by two former employees who allege that it pressured staff to inflate ratings to gain business. The Securities and Exchange Commission has questioned the company’s reliability, and a regulator in Bermuda, where insurers park a huge amount of capital, has stopped accepting the firm’s ratings.

“Egan-Jones stands behind the integrity, independence, and rigor of its ratings,” the company said in a statement.

Ratings firms play a crucial role in making sure life and annuity insurers don’t take too much risk when investing policyholders’ premiums. That is because the credit rating on each investment generally determines the dollar amount an insurer must set aside to protect against the risk of loss. A better rating means insurers don’t have to set aside as much capital.

Insurers who pick a lenient ratings agency might set themselves up for long-term pain should those deals run into trouble, Piper Sandler insurance analyst Paul Newsome said. “There can be impacts to policyholders if any of the rating agencies do a poor job,” Newsome said.

Life insurers chasing higher returns have splurged on private credit deals in the past decade, leading to a sharp increase in confidential, or “private letter” ratings assigned by firms like Egan Jones that often accompany the investments.

A wave of defaults on often illiquid private-credit assets has brought attention to the potential pitfalls that come with lending to smaller or less-creditworthy businesses, and stoked concern about the ratings assigned to these investments even though they apply to a fraction of the total debt owned by insurers.

Many insurers have debt rated by Egan-Jones on their books, according to the Journal’s analysis, which drew on ratings data disclosed by the firm and investment holdings data from the National Association of Insurance Commissioners.

Among the biggest holders are insurance companies controlled by Mark Walter, the financial titan who owns the Los Angeles Dodgers. Egan-Jones rated about $2.6 billion of loans held by Walter’s insurers, the analysis showed, including debt issued by American Media Productions, a firm controlled by a Walter affiliate that owns the Dodgers’ local TV broadcaster.

Loans tied to Walter’s business empire are at the center of a federal investigation into possible fraud. Egan-Jones said its understanding is that the Walter investigation is focused on disclosures, not ratings. A spokesperson for Walter’s insurers declined to comment.

Other insurers with significant amounts of debt rated by Egan-Jones include Teachers Insurance and Annuity Association of America with $5.5 billion, Mass Mutual with $3.4 billion, Principal with $2 billion, Security Benefit Life with $1.7 billion and Allianz Life with $1.6 billion.

TIAA, Mass Mutual, Principal and Allianz said they do their own risk assessment separate from those conducted by ratings firms. Principal said it tallied its Egan-Jones rated debt slightly differently from the Journal and came up with a total of $1.7 billion. Allianz said that late last year it asked its asset managers to stop working with Egan-Jones and to get a second rating for any Egan-Jones rated debt. Security Benefit didn’t respond to a request for comment.

Insurance companies and the state commissioners who regulate them have long relied on public ratings from Moody’s Ratings or S&P Global to assess risk and determine how much of a financial cushion insurers should hold for each bond they invest in. Those letter-grade credit assessments have historically been limited to public debt. But that changed in the past decade as private credit in life insurer portfolios swelled to an estimated $980 billion, or about a quarter of total holdings, as of 2025, according to an estimate by insurance-company ratings firm AM Best.

Rather than go to insurance regulators for an individual assessment of how much capital to hold for each private investment, insurers and debt issuers began paying for confidential, or private-letter, ratings. Insurers held about $480 billion worth of privately rated debt instruments in 2025, more than 10 times their $47 billion value in 2018, when companies first began disclosing their use, the Journal’s analysis shows. Most were for private debt, but insurers can also seek private-letter ratings on public securities.

Egan-Jones is among the main players in the private-letter ratings business but has lately attracted considerable scrutiny. The lawsuit filed in 2024 by the firm’s two former executives alleged they were fired after telling securities regulators they were concerned about conflicts of interest.

In its statement, Egan-Jones denied the allegations by the former employees and said they were establishing a competing ratings business.

In a September 2023 letter to Egan-Jones, the SEC wrote that the firm’s incentives for analysts could lead to compromised ratings. And in March, the Securities and Exchange Commission questioned Egan-Jones’s capacity to “consistently produce credit ratings with integrity” on asset-backed securities, a type of debt instrument it was seeking permission to rate. An SEC spokesperson declined to comment.

Egan-Jones said the incentives referenced by the agency were part of a work-tracking system commonly used by businesses.

In January, regulators in Bermuda removed Egan-Jones from its list of recognized ratings providers. A study by the National Association of Insurance Commissioners said private-letter ratings from small firms, a group that includes Egan-Jones, were often inflated. The group has pulled the report from its website, saying it needed to clarify its findings.

Some insurers are starting to back away from Egan-Jones and seek a different grader. Insurer debt rated confidentially by Egan-Jones fell more than 30% in 2025, from $58 billion in 2024, a period when total private-letter rated debt grew, according to the Journal analysis.

The general lack of disclosures around private credit have been a concern for investors and lawmakers worried about hidden risks in the industry. Evaluating private-letter ratings is difficult because so few are disclosed, and unlike with big publicly traded bond issues, the investments are frequently rated by only one firm.

FAA Orders Inspections of Over 400 Boeing 737 Max Jets for Possible Cracks

The directive will take effect on Sept. 10

The Federal Aviation Administration has ordered the inspections of Boeing BA -3.33%decrease; down pointing triangle 737 Max jets for cracks of a component that could affect the structural integrity of the planes.

The FAA directive, which was published Thursday and will take effect on Sept. 10, will apply to certain Boeing 737-8, 737-9, and 737-8200 model airplanes. The FAA estimates that the mandatory inspections will affect 471 jets in the U.S.

It said cracks were found on some older plane models in a structural reinforcement, known as the bear strap, around the forward gallery door.

Inspections of the fuselage skin will be required, the FAA said.

“The FAA is issuing this AD [airworthiness directive] to address the unsafe condition on these products,” the agency said, adding that the cracks could “adversely affect the structural integrity of the airplane.”

The aircraft manufacturer said the inspections provide opportunities to detect and correct possible cracks before they exceed a critical length.

A Boeing spokesperson said that the company has been working with aircraft operators over the past six years after identifying the issue on 737 New Generation airplanes.

“This issue has not been observed on the 737 MAX fleet, but Boeing extended the inspections to 737 MAX airplanes as the model shares a similar design and build process,” the spokesperson said.

“The FAA Airworthiness Directive published today mandates the inspections, as it did for the 737 Next Generation,” the person said.

Boeing is introducing changes to the manufacturing process that addresses the root cause of the unsafe condition on in-production airplanes, the FAA said.