The nine-year-old San Francisco-based company Allbirds continues to face growing pains despite progress in shedding excess inventory last year. Now, its co-founder and CEO, Joey Zwillinger, has stepped down as the group moves forward with a strategy to turn around its overall business by 2025.
The group suffered a $57.6 million loss against a loss of $25.5 million in Q4 ended Dec. 31, as total sales fell by 14.5 percent to $72.0 million from $84.2 million. Gross margin was down by 310 basis points to 38.0 percent from 43.1 percent. The net loss was $56.8 million against a loss of $24.9 million. For FY23, Allbirds reported an operating loss of $153.0 million against a loss of $100.3 million on a 14.7 percent drop in annual revenues to $254.1 million from $297.8 million. The FY23 net loss was $152.5 million versus a loss of $101.4 million. The annual gross margin, meanwhile, slipped by 250 basis points to 41.0 percent from 43.5 percent.
Allbirds’ plans going forward include completing its transition to a distributor model from a direct-selling model in international markets and closing 10-15 underperforming stores in the US in 2025. With Canada and South Korea moved to a distributor model in Q3/23, Japan, Australia, and New Zealand will follow suit this year. A direct distributor model will be maintained in the UK, where wholesale distribution will be added this year.
The company’s current FY24 outlook calls for a $32-37 million negative impact from transitioning to a direct-selling model in key international markets and the anticipated store closures. Full-year revenues are forecast at $150-$175 million, including $40-45 million from markets outside the US. The annual adjusted Ebitda loss range is pegged at $63-$78 million.
