Net revenue decreased 18.3 percent to $32.1 million due to planned retail store closures and international distributor transitions.
San Francisco-based shoe manufacturer Allbirds produced first quarter results in line with expectations as it narrowed losses and held guidance for the full year, despite other brands withdrawing forecasts amid the turmoil caused by Trump’s tariffs.
Net revenue decreased 18.3 percent to $32.1 million due to planned retail store closures and international distributor transitions, partially offset by gift card breakage – where customers do not redeem the unused portion of a card. The results beat analyst expectations of $28-31.5 million and the company is now confident of generating expected topline momentum in the second half.
On a regional basis, US sales fell to $25.6 million from $29.3 million and international revenue declined to $6.5 million from $10.1 million.
The quarterly net loss was $21.9 million compared to $27.3 million last year. Gross margin declined 210 basis points to 44.8 percent mainly due to a higher mix of business from international distributors, increased promotional activity and higher freight costs per unit in its direct business.
Total operating losses improved to $22.8 million from $29.8 million. The adjusted Ebitda loss was $18.6 million compared to a loss of $20.9 million. Inventory at the end of the quarter was $42.9 million, down 29.3 percent year on year.
Allbirds said that despite the uncertain macroeconomic backdrop, positive indicators from its product and marketing initiatives “make us confident in our long-term trajectory”.
“We’re pleased to report another quarter of progress against our plans, delivering financial results within or above our expectations,” said chief executive Joe Vernachio.
“The foundational work we have done over the past year is converging with our key focus areas of product, marketing and customer experience and positioning us to generate expected topline momentum in the second half of the year.”
Looking ahead, the company said it expects negative impacts of approximately $18-$23 million of revenue associated with the transition from a direct selling model to a distributor model in some of its international markets and the closure of certain Allbirds stores in the U.S.
As a result, Allbirds expects net revenue for fiscal 2025 to be $175-195 million and forecast second quarter net revenue of between $36 million to $41 million with $26-$30 million coming from the US and international sales of $10-$11 million. It also expects an adjusted Ebitda loss of $19-16 million.
“Despite the macro backdrop, positive indicators from our initial product and marketing initiatives, combined with strong execution, make us confident in our long-term trajectory,” Vernachio added.
