Allbirds’ next generation of footwear models will hit global markets in H2 2025. The San Francisco-based brand is moving ahead with a turnaround strategy focused on its roots as a modern lifestyle brand with products that offer comfort and versatility. The brand’s turnaround strategy also involves improving its e-commerce site and US stores, outsourcing much of its business outside North America to distributors, and launching a premium digital content series featuring inspirational people, ideas, and storytelling.
The group’s Q3 operating loss was $21.8 million against a year-ago loss of $30.1 million for the period ended Sep. 30. Gross margin improved by 90 basis points to 44.4 percent on lower freight and duty costs coupled with an inventory position that was down by 28 percent to $57 million year-over-year. The net loss was $21.2 million, 33 percent better than the $31.6 million net loss in Q3/23.
Allbirds’ Q3 total revenues were down by 25 percent year-over-year to almost $43.0 million versus $57.2 million. Sales were negatively impacted by retail store closures and the company’s ongoing transitions to international distributors. US sales tumbled 27 percent in Q3 to $32.0 million and were down by 19 percent elsewhere in the world to almost $11.0 million. During the period, the group transitioned the operations of six stores in China to a third-party distributor and closed a retail door in Europe. The company intends to transition most of its European Union business to a distributor model by July 2025. There were 34 Allbirds’ stores at period end, down 33 percent from 51 at the end of Q3/22.
FY24 Outlook
The group has retained its annual sales forecast, maintained its gross margin outlook, and narrowed its adjusted Ebitda range. FY revenues are now pegged at $187 to $193 million, including $143 to $147 million in US and $44 to $46 million elsewhere. The international sales forecast includes $13 to $16 million of impact related to transitions to distributors in certain international markets. Meanwhile, the annual gross margin range forecast remains at 43 to 46 percent, driven by reduced promotion activity, lower freight costs, and savings from a factory shift in Vietnam.
