Allbirds said that new product launches, a key pillar for the next phase of its transformation plan, helped it report results in line with expectations for the third quarter.
The San Francisco-based footwear company reported that Q3 revenues dropped 24.9 percent to $43 million, in line with its guidance. Net loss was $21.2 million, or 2.68 cents per basic and diluted share, and adjusted EBITDA loss was $16.2 million, which was also in line with guidance. The results beat the expectations of analysts surveyed by Yahoo Finance, who were looking for a loss of $3.20 per share and $42 million in revenues.
Allbirds said the sales decline was driven by lower unit sales, planned store closures and international distributor transitions. This was partially offset by higher average selling prices in the direct-to-consumer business.
“We are pleased to deliver Q3 results within our expectations as we continue to advance our three strategic focus areas,” said Allbirds chief executive officer Joe Vernachio, who assumed the CEO role in March after co-founder and former CEO Joey Zwillinger stepped down. “Our teams are delivering strong execution across the board and we are energized by the opportunity ahead as we prepare to bring our reignited product to market in 2025.”
Allbirds announced a business turnaround plan in March 2023 centered on revamping product, optimizing U.S. distribution and store profitability, re-evaluating its international strategy and improving cost savings. The brand, which was also challenged by an unsuccessful push into the activewear space, said it would refocus on core styles like the Wool Runner.
Since then, Allbirds has closed 15 retail stores, transitioned to a distributor model for its international business and narrowed operating cash use. For the next phase of the transition, Allbirds is bolstering three key areas: product, storytelling and shopping experience. In the third quarter, for example, Allbirds launched two new products: the Tree Glider and the Lounger Lift, both of which garnered positive responses from consumers.
“We’re returning to our roots as a modern lifestyle footwear brand, refocusing on our core tenets of comfort and versatility that have always defined us,” Vernachio said in a call with analysts. “Our future product lineup brings a new level of modern sophistication that pays homage to our origin story of comfort and sustainability. This next-generation offering will begin to hit the market in the second half of 2025.”
Allbirds downgraded its 2024 sales guidance and now projects net revenues of between $187 million to $193 million, with U.S. net revenues of between $143 million to $147 million. The company maintained its gross margin projection and expects it to be between 43 percent to 46 percent. Allbirds tightened its adjusted EBITDA loss range and expects a loss of between $75 million and $71 million.
For the fourth quarter, Allbirds expects net revenue between $53 million and $59 million and U.S. net revenue between $45 million and $49 million. Adjusted EBITDA loss is expected between $25 million and $21 million.
