Allbirds completed its first full year as a public company by reporting a $25.5 million operating loss versus an operating loss of $6.4 million in the period ended Dec. 31. The net loss was $24,866,000 against a net loss of $10,444,000. Promotion and the discontinuation of first-generation apparel contributed to a 710-basis point drop in gross margin to 43.1 percent. Revenues declined by 13.4 percent to $84,178,000 from $97,218,000, with U.S. sales down 14.7 percent to $65.6 million and international off by 8.4 percent to $18,592,000. Contributing to the disappointing Q4 results were an 11 percent drop in active customers and digital softness that offset 8 percent growth in stores, which includes 42 in the U.S. and 16 abroad. The year-over-year inventory level was up 9.3 percent at $116.8 million versus $106.9 million.
The group, which will welcome Gymshark and Adidas veteran Annie Mitchell as its new CFO in April, has initiated a new transformation strategy that is expected to re-accelerate sales and profit growth in 2024 after a transitional FY23. Senior management estimates that the measures being undertaken by the company, including a shift in all footwear production to Vietnam by years-end, will result in cost savings of $35 to $45 million over the next three years. That total includes $20 to 25 million in savings in the cost of goods and $15 to $20 million in SG&A costs.
The transformation strategy includes slowing the pace of U.S. store openings to three this year after 19 in 2022; shifting to a distributor model in certain international markets; measuring expansion to key wholesale partners in REI, Dick’s, Nordstrom and Scheels, and re-connecting with “core” Allbirds customers, who are described as 30- to 40-year-old women. The company currently operates 16 retail doors outside the U.S.
In FY22, Allbirds reported a net loss of $101.4 million against a loss of $45.4 million. Operating loss was $100.3 million versus a loss of $32.9 million. The full-year gross margin slipped by 940 basis points to 43.5 percent from 52.9 percent. Annual revenues rose 7.3 percent to $297.8 million from $277.5 million, with U.S. sales rising by 9.5 percent to $229.8 million and international sales inching 0.4 percent higher to nearly $68.0 million.
