Allbirds banking on new assortments, initiatives to fly high again in late 2025

Allbirds reduced its Q4 operating loss by 55 percent year-over-year to a loss of $25.8 million, versus a loss of $57.6 million, helped by both store closures and cost-cutting. The final period net loss was $25.7 million against a loss of $56.8 million, as sales tumbled by 22 percent to $55.9 million from $72.0 million. Gross margin contracted by 670 basis points in Q4 to 31.3 percent from 38.0 percent in the year-ago period.

CEO Joe Venachio has told analysts that “full-price selling” is critical to the long-term health of the brand. In 2024, Allbirds took steps to improve the productivity of its store portfolio by closing 15 US doors and shifting its international business to a distributor model. In Q1, the group intends to introduce a new store prototype in San Francisco, with additional locations opening later this year.

In FY24, the annual operating loss was improved by 30 percent to a loss of $97.6 million, against a loss of $153.0 million in FY23. The net loss was $93.3 million against a loss of $152.5 million, as gross margin improved by 170 basis points to 42.7 percent from 41.0 percent. Total revenues declined by 25 percent to $189.8 million from $254.1 million, with US sales down by 25 percent to $143.9 million and international sales falling by 27 percent to $45.9 million. There were 30 US retail locations and three in international markets at year-end.

Allbirds’ current FY25 outlook calls for a total revenue range of $175 to $195 million, including $18 to $23 million of negative impact from international distributor transitions and store closures. Excluding those factors, annual sales are forecast to increase by 10 percent at the midpoint. The adjusted Ebitda loss is pegged at $55 to $65 million. Also, there will be notable press on gross margins in Q1, because of channel mix and the phase-out of certain products ahead of the new assortments in H2.